Beer sales declining, alcohol tax hikes pose high risk

Domestic sales by the members of the Finnish Federation of the Brewing and Soft Drinks Industry in 2008

Beer sales fell by a total of 2.1 per cent in 2008. A total of 2.5 per cent less beer, cider, long drinks, mineral waters and soft drinks were consumed than in the previous year. Only sales of long drinks rose. An increasing proportion of beverages are being packaged in cans, and over half of all beer is now packaged in cans. These figures are based on the sales statistics of members of the Finnish Federation of the Brewing and Soft Drinks Industry.

“The increase in alcohol taxation and the worsening economic climate have impacted on beverage sales,” says Timo Jaatinen, Managing Director of the Federation of the Brewing and Soft Drinks Industry. Taxation on brewery beverages was increased by ten per cent at the beginning of 2008 and by another ten per cent at the beginning of this year. In connection with its mid-term review, the government has once again decided to propose new alcohol tax hikes.

“Finland’s beer tax is already the highest in the European Union and almost five times as high as in Estonia. The new alcohol tax hikes that were announced would make the tax differences between the countries intolerable. The devaluation of the Estonian kroon also poses a threat. These factors significantly heighten the risk of an explosion in private imports by travellers. Travel to Estonia hit a record peak last year and is still on the rise. This also shifts other types of consumption demand and use of services from Finland to Estonia. We are preventing the recession of the Estonian national economy at the expense of Finnish labour. Government must be prepared to rapidly reverse the alcohol tax hikes if they lead to substantial market disturbances, as expected,” says Jaatinen.

A total of 417.4 million litres of Finnish beer was sold in 2008 – a decline of 8.9 million litres, or 2.1 per cent, on the previous year. Almost 80 per cent of beer is sold off-trade. On-trade sales account for just under 18 per cent and Alko sales for 2.6 per cent. Over half of all beer sold is already packaged in cans. The proportion of beer sold in cans rose from 38 to 52 per cent.

Members of the Federation of the Brewing and Soft Drinks Industry sold a total of 37.4 million litres of cider. Cider sales fell by 9.1 per cent, or 3.7 million litres, while sales of long drinks continued to rise. At a total of 38.0 million litres, long drink sales have already outpaced cider sales. The long drink category grew by 12.3 per cent, or 4.2 million litres, on the previous year. About 40 per cent of ciders and long drinks were sold in cans in 2008.

A total of 270.1 million litres of soft drinks and 64.4 million litres of mineral waters were sold. Mineral water sales were down 6.3 per cent, or 4.3 million litres, and soft drink sales fell by 8.6 million litres, or 3.1 per cent, on the previous year. Sugar-free soft drinks continued to account for an increasing proportion of sales. Almost 35 per cent of all soft drinks sold were sugar-free.

DOMESTIC SALES 2008

Additional information:
Communications Manager Katri Tuulensuu, tel. +358 (0)9 1488 7601, GSM +358 (0)40 777 1938
Managing Director Timo Jaatinen, tel. +358 (0)9 1488 71

The Federation of the Brewing and Soft Drinks Industry promotes the interests of producers of beer, cider, long drinks, soft drinks and mineral waters in Finland. Its members are Oy Hartwall Ab, Nokian Panimo Oy, Olvi Oyj and Oy Sinebrychoff Ab. The Federation of the Brewing and Soft Drinks Industry operates in connection with the Finnish Food and Drink Industries Federation and is among the four largest industries in the food and drink branch in terms of the value of production.