During the first half-year of 2012, excise tax on alcoholic beverage (except beer) was collected in the amount of 39.55 million LVL, which is 2.16 million LVL or 6% more than was collected in the same period of 2011. It was influenced by the 2011 summer increase of excise tax rate, and the fact that alcohol consumption continues to steadily stabilize.

Even though current indexes show a positive tendency, there is no time to relax. According to the estimates of the Alcohol producers and traders association (APTA) illegal alcohol market proportion is around 35-40% from the Latvian market. «A steady stabilization and strengthening process is currently noted after last year’s drop. Alcohol market is experiencing 3-5% increase after the first six months. It is good that Finance Ministry decided it to be unnecessary to increase the excise tax on alcoholic beverages. It is usual for alcohol consumption to remain the same even after excise tax rate increase. However, this step usually means an increase on the illegal alcohol market,»- APTA representatives comment.

Compared with last year’s six month period, consumption rates of alcoholic cocktails increased the most (by 9%). Cognac and brandy consumption increased by 16%, as well as whiskey consumption (29%). Meanwhile, the largest reduction is noted in vodka consumption (4%) and natural wines (2%), states the alcohol turnover data from the State Revenue Service.

«Unfortunately, statistics only confirm the obvious truth – alcohol categories that are not popular on the illegal market, such as cognac and whiskey, showed an increase in realization rate in the first half-year of 2012, retail trade increase and, with that, larger excise tax revenue. However, legal market vodka continues showing notable decrease. This is dangerous, because vodka is one of those groups of alcoholic beverages that are more in danger of being used in contraband and all kinds of counterfeits. This means that an increase is also noted on the illegal market, and the money from its realization goes over the state wallet,»- says APTA Director General Gennady Klepikov.

«A number one priority for this industry is still a reasonable and weighted excise tax policy, as well as targeted combating of the illegal alcohol market. We need to adopt new regulations that would increase the trader’s responsibility for selling alcoholic beverages to under-age individuals,» – says APTA Board member Vitolds Bremmers.

Alcohol sector is already one of the most regulated ones in Latvia. Previous experience shows that limited measures do not lead to a 100% result, APTA concludes.

Ref: 102.109.109.3169