New excise tax shocks alcohol beverage sector

Polish government has announced that it will raise excise tax on alcohol in 2009, shocking the alcohol beverage sector. Under the new law, excise duty for alcohol beverages will grow by 16 percent for wine, 13 percent for beer and 10 percent for vodka.

Alcohol producers fear that this move will affect firms sending their sales downward. "When in 2005, the excise tax was raised by 3.4 percent, budget revenues were supposed to grow by zł.300 million. Instead, they dropped by zł.130 million and vodka sales fell 10 percent," Leszek Wiwala, the CEO of the Polish Alcohol Industry told Puls Biznesu. "That's why we fear that the planned 10 percent hike will cause an up to 20 percent drop in sales."

Wiwala fears that the illegal market will grow, as the increase in the excise tax will mark the highest in the region.

Currently, the Polish alcohol beverage market is worth zł.30 billion.

Source: Puls Biznesu