Government plans to raise excise on beer – again

On 1 January 2017, excise on beer could be hiked by 4 percent to reach USD 21.92 per hl. That’s among the highest duty loads in Europe. The association of Swedish craft breweries has voiced its objections to the excise increase, arguing that it will hamper their growth. There are currently nearly 250 small breweries in Sweden, most of them run by enthusiasts who already struggle with unpaid evening and weekend work.

To burden these entrepreneurs with an even higher alcohol tax could stifle a nascent craft movement in its infancy, the association says, as it puts them at a disadvantage over the big brewers. It is feared that Swedish consumers will just take to consuming more “personal imports” – that’s beers that they bring into the country from Germany themselves without quotas or buy from the back of white vans. No one knows how big the share of personal imports is of total beer consumption, but it’s estimated to be sizeable at around 450,000 hl or 10 percent of official beer consumption (4.5 million hl in 2014 according to the Brewers of Europe). Systembolaget, the state-owned monopolist alcohol retailer, only sells an estimated 60 percent of total alcohol consumption.

The big brewers in Sweden like Carlsberg and Spendrups get around the high alcohol taxes by shipping their beers to northern German port towns from where Swedish punters re-import them without paying Swedish excise.

The association is lobbying for a staggered excise rate which would benefit the brewers with small production volumes. Already 21 EU member states have staggered tax rates – with the exception of Sweden to the north, and wine producing countries like Spain, Italy, Cyprus, Hungary and Slovenia in the south.

If the government were to make an exception for the small brewers, it would be a signal towards reducing alcohol consumption. Presently, craft beers – SEK 30 (USD 3.30) or more for a 330 ml bottle – cost three times as much as mass-produced beers. According to the association’s reasoning, if the price of craft beers came down, people might drink a few of their beers rather than a lot of their personal imports.

Moreover, it could create jobs at the craft breweries. Many of the small breweries operate with only three people. If their sales went up they might be able to hire another staff member.

This being Sweden, it is feared that the association’s arguments will fall on deaf government ears. After all, the government takes pride in the fact that per capita consumption of beer has dropped to 48 litres in 2014 from 52 litres in 2009. That this statistical decline is partly due to the influx of abstemious immigrants, who cares?