Domestic sales of beer, cider, long drinks, mineral waters and soft drinks decreased by 4.8 million litres, or 2.1%. Sales had already hit a historic low in the comparison period, January-April 2013, and have continued to decline in 2014.
Stores had stocked up on products before the turn-of-year tax increases, which slightly weakened sales in the early months of the year.
Large sales drops were seen in soft drinks and mineral waters, which have been hit by three tax increases during the past three+ years. At the beginning of 2014, the administrative burden of companies subject to these taxes increased, as the taxes were staggered into two levels, and the tax on beverages containing sugar was doubled. Finns pay an additional excise tax on sweets, ice cream and soft drinks. This sweets tax amounts to 22 cents per litre on sugar-containing soft drinks, and 11 cents per litre on sugar-free soft drinks and mineral waters.
“The sweets tax on soft drinks has accelerated the decline in sales of these beverages,” said Elina Ussa, MD of the Federation of the Brewing and Soft Drinks Industry. “The tax haphazardly targets individual products. This doesn’t solve national health challenges. The inclusion of sugar-free soft drinks and mineral waters in particular under the sweets tax is unreasonable. Nutrition-related national health challenges cannot be blamed on a single food or beverage, but on overall diets and lifestyles.”
The Finnish soft drinks market has contracted during the past decade. Meanwhile, imports of soft drinks into Finland have increased. Imported beverages now account for more than 20% of domestic soft drink consumption.
It’s estimated that the higher excise tax on soft drinks has also increased private imports by travellers. Furthermore, the amount of illegal imports cannot be estimated. Travellers’ imports of soft drinks to Finland are not studied at all. However, Denmark has discontinued its soft drinks tax entirely due to out-of-control cross-border trade.
According to a recent survey, 92% of Finns are of the opinion that a sweets tax should not be charged on mineral waters. Only 4% think that a sweets tax can be levied on mineral waters. The sugar tax working group of the Ministry of Finance has justified the excise tax on mineral waters by stating that Finland has good tap water.
However, over and above the sweets tax, soft drinks and mineral waters are also subject to a packaging tax; joining the beverage container recycling system provides exemption from this tax.
It’s estimated that Finns drink 56 litres of soft drinks per capita annually. This is among the lowest in Western Europe. Finland has the lowest mineral water consumption in all of Europe, about 17 litres per capita annually. These figures are based on the estimates of Unesda, the European umbrella organisation of soft drink manufacturers.
© FoodBev Media Ltd 2019