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Estonian beer factories fear losing up to half of sales to Latvia

As excise duty on low-alcohol drinks increases in Estonia, the country’s larger beer producers Saku Õlletehas and A. le Coq have voiced concern that the industry would face serious pressure as consumers look for cheaper prices in Latvia.

ERR reports citing Saku Õlletehas board member Jaan Härms as saying to BNS news agency: «The drastic hike in the excise duty on low-alcohol beverages taking place this and next year will put our activity on the domestic market under serious pressure. (..)It can be expected that already considerable cross-border trade with Latvia will multiply and up to half of internal sales may head for the border».

Meanqhile, A. le Coq board chairman Tarmo Nööp commented to BNS: «It is a shame that Estonia has become a country in which the current government with their decisions has clearly said that they do not consider the business environment important and, if they want, they will drastically change everything which has previously been written into law».

With swift excise tax increase on alcohol continuing, on July 1, the rate on beer and cider was raised by 70%, reaching 15.52 euro cents for percent of alcohol by volume per litre.

The first duty hike of 2017, which took place in February, resulted in the rate of the duty rise from 8.30 cents to 9.13 cents per percent of alcohol by volume per litre.

Estonian Ministry of Finance has estimated that the first hike a average 0.5 litre bottle of beer cost on average EUR 1.11, following the July 1 hike, its price will reach approximately EUR 1.29, while a bottle of apple cider with 4.5 percent ABV would rise in cost from EUR 1.29 in January to about 1.46 euros beginning July 1.

As to spirits, Estonia plans to increase their excise tax rate 10 percent every year until 2020.


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