Small brewers discuss staggered beer tax

The alcohol escalator is causing grief. As of 1 January 2015 the Swedish government hiked the excise on beer to SEK 1.94 per litre for each degree of alcohol. That’s an increase of SEK 0.16. The tax applies to beer in excess of 2.8 % ABV.

The reason for the annual tax hike is the usual: the government is looking for extra dosh while reducing the harmful effects of alcohol. Currently, the government reaps about EUR 370 million in beer excise, according to figures by the Brewers of Europe.

The Swedish Association of Small Brewers thinks these are fundamentally two good motives. Unfortunately, the Government seems to forget one important aspect: the rapidly growing number of microbreweries popping up all over the country. At the moment there are an estimated 200 microbreweries in Sweden. They serve a market of 9.5 million people where beer consumption has been more or less flat at 4.7 million hl.

Their market share is small as the top four brewers – Carlsberg, Spendrups, Abro and Kopparsberg – control about 70 percent of beer sales, predominantly through Systembolaget, the country’s monopolist alcohol retailer.

Like elsewhere, the vast majority of microbreweries is operated by beer enthusiasts who struggle with unpaid evening and weekend work as they try to make ends meet.

The Association thinks that to burden these entrepreneurs with a yet higher alcohol tax may stifle a nascent craft brewing industry guild in its infancy.

Moreover, the Association feels hard done by the current tax regime as small brewers, which are limited to the domestic market, have to pay the tax in full, whereas the country’s larger brewers can partly avoid it by revving up their exports to “border shops” in countries like Germany, where their beer is sold for re-importation by Swedish punters without the forbiddingly high Swedish alcohol tax.

Fortunately, there is a good solution for this – an EU directive which enjoins reduced alcohol taxes for breweries with small production volumes. This rule is already used by 20 of the EU Member States.

Whether Sweden’s government would be open to this idea remains to be seen, though.