Craft beers, at risk of bankruptcy/ Production decreases after the doubling of the excise duty

2024-05-27 07:40:00, Ekonomi CNA

Craft beers, at risk of bankruptcy/ Production decreases after the doubling of

From January 1, 2023, after the implementation of the changes in the law "On excise duty", craft breweries are paying 110% more excise duty than before for 1 liter of beer produced.

The excise duty accounts for 40% of the total cost for these producers.

In order to survive, small breweries, according to the President of the Albanian Microbrewers Association Xhim Begeja, have increased prices, but at the same time have reduced the amount of production due to the competition of imported beers. In total there are 10 small breweries, such as: Puka Beer, Pan, Dyst, Grandfather Beer, Gjallica Beer, Karabash Beer, Lushnjë Beer, Saraçi Beer, Altenberg Beer and Brahause Beer, which together produce about 3,000 HL per year .

For this reason, the association of microbreweries asks the State Ministry for Entrepreneurship and Business Climate to exempt 10 craft producers from the obligation to pay excise duty and the obligation to perform DSHA (declaration of advance payment of excise duty for any product that leaves the factory without the goods being sold yet ), or fixed fee per reduced liter and exemption from the obligation to perform DSHA.

According to the calculations made by the Association of Microbreweries, craft beer producers pay 110% more excise duty from January 1, 2023 with the entry into force of the legal changes for the doubling of beer excise duty.

"The calculation formula with the previous charging was 360 Lek x 4% alcohol = 1,440 Lek excise duty for 100 liters of beer or 14.4 Lek per liter. With the change in excise duty, it became 744 x4%=29.76 ALL for 100 liters of beer or 29.76 ALL per liter. The excise duty has increased by 110%.

So our beers come out with 4.8% alcohol, because this is the production technology.

The higher the alcohol, the higher the excise duty. For example, for 1 liter of beer produced with 5.2% alcohol x 744 excise duty = 3,869 Lek excise duty per 100 liter or 38.69 Lek per liter

The obligation for the excise duty occupies 52% of the material cost or 35 to 40% of the total cost", asserts Begeja.

Requests

Option A

Exemption from excise duty and the obligation to perform DSHA (declaration of advance payment of excise duty for any product that leaves the factory without the goods being sold yet). Support for various activities.

Option B

Fixed fee per reduced liter and exemption from the obligation to perform DSHA. Support for various activities.

The costs of the state for the support of 10 micro-businesses with high development potential are calculated on average around 10,000,000 ALL per year.

According to the Association of Microbreweries, the benefits of society and the state from taking into account their requests will bring: Encouragement of local enterprises; Promotion of the local economy; Conservation of resources and money within the borders of Albania; Represents the country and cultural values; Creation of jobs in the artisan sector; Tourist attraction; Potential for export; Adding national values ??by means of craftsmanship, differentiation of products, originality; Promotion of quality Albanian products that compete with international products; The development of the artisan and the support of young people who have different ideas; Positive impact on the balance of net exports; Positive impact in preventing the departure of young people from Albania and the aging of the population; Innovative product for the domestic market; Competitiveness with neighboring countries and not only, in terms of craft beer production; Improvement of the business climate; Orientation of the consumer towards local products, as well as the change of public opinion about local products.

Already, the amendments to Law 61/2012 "On Excise Duty in the Republic of Albania", which resulted in the doubling of the excise duty for beer producers from January 1, 2023, have been appealed to the Constitutional Court by the Association of Producers and Traders of Local Alcoholic Beverages and the Association of Microbreweries. The first session was already held in the Constitutional Court on May 16 and the decision is expected on May 28.

From January 1, 2023, local brewers are paying double the excise tax. The excise tax change added 20% to the costs of domestic industrial beer producers, who were also hit by the increase in the price of malt beer raw material, packaging materials and the increase in employee wages. For this reason, in the months of January-February and March, some factories temporarily closed production, as they could not afford the costs.

The country's production before the fiscal changes was charged with 360 ALL/HL for producers under 200,000 HL, while for production above this level the excise duty was 710 ALL. After the changes in the law "On excise duties in the Republic of Albania", the tax was unified at 710 lek for producers under and over 200,000 Hl, both domestic and foreign./ Monitor.al