Poland can make money on vodka. But we need lower taxes


On 10th September businesses discussed with politicians about the future of the Polish economy and forecasts for the spirits industry. Debate “How to support entrepreneurs? Polish Economy 2020′ with representatives of election committees ended the 2nd Congress Of Spirits Industry in Poland. Producers presented the demands of legislative changes that should be implemented by the next government. The most important is the reduction of excise duty rate on spirits and the elimination of spirits discrimination in relation to other alcohol categories. Additional resources will allow companies to increase exports, which can benefit in the new jobs.

The 2nd Congress took place in Warsaw under the patronage of the Minister of Economy. It was organized by the Association of Employers of Polish Spirits Industry and the National Chamber
of Commerce. Partners of the meeting were Polish Vodka Association and consulting company, PwC. Media patronage took: Dziennik Gazeta Prawna, WBJ Observer and Alcohol Markets.

In the opening speech, on behalf of the minister of economy, deputy minister Arkadiusz Bąk, stressed the role of the spirits industry for the Polish economy and the promotion of the country abroad. He promised further support to manufacturers in deregulation. He noted that the development of the spirits industry is an important economic boost to many local communities. The challenge still remaining is the social perception of alcohol in Poland which is  associated negatively. Jarosław Neneman, deputy finance minister, pointed the simplifications in excise tax regulations that were adopted in August by the Parliament in the Deregulation Act. The Ministry took into account a lot
of demands of ZP PPS, although the industry claims about greater deregulation. Andrzej Arendarski, the president of the National Chamber of Commerce emphasized that the dialogue between business and the state administration is beneficial for both parties and helps to avoid decisions that bring destabilization of the market.

Leszek Wiwała, president of the board of ZP PPS, on behalf of companies affiliated to the Association identified the main barriers to further development of the spirits industry: the highest rate of excise duty on spirits in the region, black market reaching approx. 20 percent, unequal rights to communicate with customers in relation to other alcohol categories, excessive bureaucracy of legal production and the lack of long-term support of diplomacy in the promotion of Polish spirits. He handed on to politicians a “White Paper” – the document presenting 11 expectations of law changes by the spirits industry. Andrzej Szumowski, chairman of the general council of ZP PPS, stressed that business understands the needs of the state budget, but expect dialogue and fair tax policy, that does not discriminate some entrepreneurs disrupting the healthy competition on the alcohol market. Currently, the rate
of excise tax in 5 percent beer is three times lower than in 5 percent gin and tonic.

Paul Skehan, Director General spiritsEUROPE, the European industry organization, suggested that with decreasing alcohol consumption in Europe, development opportunities are outside EU. He recalled how successful on foreign markets is Scotch whisky, stressing that Polish vodkas have
a similar potential – tradition, quality and historical brands. By increasing export Poland can also promote the country, culture and earn. It would be a shame not to use it.

The political debate “How to support entrepreneurs? Polish Economy 2020′ was attended by: Marcin Święcicki (PO), Jan Krzysztof Ardanowski (PiS), Arkadiusz Bąk (PSL) and Paweł Rabiej (Nowoczesna). JanKrzysztof Ardanowski thanked the industry for social responsibility actions and building
the culture of alcohol consumption. He stressed that high taxes are the result of the wrong thinking of politicians that the spirits industry can be a cash cow when the budget is empty. Marcin Święcicki noticed that despite the difficulties on the East Polish export is still growing, and in this context, particularly important would be the EU trade agreement with the United States (TTIP). Paweł Rabiej and Arkadiusz Bąk promised the support for equal rights of spirits industry in communication with customers and to positively regulate the online sale of alcohol. Politicians acknowledged the need
for a discussion of the alcohol excise duties model, which will not discriminate one manufacturers against others.

The spirits industry pays annually to the state budget PLN 11 billion from excise duty, VAT, jobs and other taxes and helps to maintain 97,554 jobs in the supply chain. However, it is struggling with low profitability, the lowest in the food sector. The rate of excise duty on spirits in Poland is higher than in all neighboring countries, including Germany.

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