Discussion partner: The Union of Brewing Industry Employers – Polish Breweries
What is the situation in the industry, what was this summer like for the industry?
Unfortunately, the summer was not so great, and not only weather-wise. For various reasons the industry's sales volume has already fallen by 7 per cent this year, which adds to the declines of previous years. The future does not look very encouraging, especially in view of the various solutions that are being discussed by decision-makers.
These solutions include the government's plan to increase excise duty, although Karol Nawrocki and his representatives have announced that the president will not advocate tax changes.
I do not wish to comment on the political aspect of this discussion. However, we are indeed dealing with a proposal to increase excise duty, or in other words, the government's breach of its agreement with alcohol manufacturers. It should be remembered that we operate according to an excise duty map, which assumed that from 2022, excise duty would gradually increase, with the cumulative value of the increases reaching 40 per cent. Meanwhile, shortly before the start of the new year, without the appropriate vacatio legis, we learn that this agreement is about to be terminated, and the excise duty increase is to amount to 15 per cent instead of the planned 5 per cent, i.e. three times more.
This is not the only challenge faced by the industry. The deposit system is about to start. And the beer industry is the only alcohol industry that is going to be covered by these regulations. Neither vodka, including small 100 or 200 ml bottles, nor wine are included in the deposit system. On the other hand, beer with its returnable bottle – which is the most environmentally friendly type of packaging on the market, with a return rate of up to 92 per cent, a bottle that is reused several times – and a functioning system created by the industry are suddenly to become part of the deposit system. This is going to increase costs. There is a high risk that many retailers will choose not to introduce returnable bottles. As a result, we may end up with an absurd situation where the most eco-friendly packaging is not available or fails on the market due to the overregulation it is going to face.
Let's refer in this context to the number of people working in the industry, what consequences might this decision have in the coming years?
Approximately 8,500 people are employed directly in the industry. We estimate that each job in the industry indirectly generates about ten jobs in other areas, so in total there are about 85,000 jobs. If the announcements about increased excise duty and restrictions resulting from the introduction of a deposit system come to fruition, we assume that the industry's sales volume is going to drop by a few more percentage points. This drop might even reach double digits, as it did in this season. As a result, we will naturally see a reduction in employment in the industry and the closure of breweries. And we are the third largest beer manufacturer in Europe and have a huge export surplus in the beer industry. We export beer, not import it. And even today the excise duty is very high. Few people know that the excise duty rate in Poland is three times higher than in Germany and twice as high as in the Czech Republic. And now there are rumours of its further increase.
