Liviko distillery lays off workers, cuts hours

Photo: Courtesy of Liviko
1/13/2015 3:07 PM
Category: Economy

Liviko has laid off 18 staff and cut hours by 33 percent at its plant, saying the move came because of increased excise duty imposed by the state this year.

"The government's alcohol policy has turned to directly harming Estonian worker competitiveness - frequent, major and hard-to-anticipate jumps in the excise have [...] produced the first serious consequences," said chairman of the board Janek Kalvi.

Excise rose 15 percent this year instead of the 5 percent hikes seen in previous years.

Kalvi warned that the "consistent attempts to destroy the national alcohol industry" would not produce a drop in total alcohol consumption but instead redistribute the market in the direction of greater foreign producers.

Noting that the company was a significant exporter, he said Liviko could not focus on solving problems on major export markets such as Finland and Russia, but had to deal with what he said were ill-advised domestic tax decisions.

For consumers, vodka and other spirits will bear the brunt of the excise hike.

A half-liter bottle of 80-proof vodka has been sold for 5 euros, of which 3.29 euros is excise. Now, starting this year, the excise amounts to 3.78.

That will mean the aforementioned bottle will rise 1 euro in price, said Kristel Mets, the CEO of another producer, Altia

Altia, however, has made changes in its portfolio, tripling export in 2014, and Mets said the company would not need to lay off workers.

 

K. Rikken

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