Brewers warn that duty could spell unemployment and plunging sales

The Finance Ministry's plan to increase the excise duty on beer in 2001 will mean higher beer prices and an estimated drop in sales by as much as 1.3 million hectoliters. Brewers warn that lower sales will create unemployment in the sector and translate into less income for the state budget. The Ministry wants to introduce next year's tax increases in two phases, the first by 10.1% in June, followed by a 16.5% hike in September 2001. According to Center for Social and Economic Analysis (CASE) experts, the 1% raise in beer prices will cause an average 1% drop in global sales. "The increased duty will mean an end to growth. The beer sector will have the same difficulties as the spirits sector. This increase can be justified neither as reasonable duty policy nor as the desire to lower alcohol consumption," said Andrzej Dlugosz, a brewing industry spokesman. Brewers are preparing to cut corners, which could result in approximately 1,000 eliminated jobs in 2001. (Puls Biznesu, p 8)