Excise duty cuts already leading to reduced prices to consumers

Beer and strong alcohol look set to cost less in major outlets from Monday.
Beer and strong alcohol look set to cost less in major outlets from Monday. Source: Anna Aurelia Minev/ERR

Monday's coming into effect of a 25 percent slash in alcohol excise duties has already been passed on to the consumer, at least in some larger outlets.

Whereas fears emerged in some quarters that producers may pocket much of the difference themselves, a quick poll of the major supermarkets by ERR's online news in Estonian suggests this will not materialize. Beer and spirits are both seeing price drops (wine is not covered by the new law).

Finnish-owned supermarket chain Prisma has cut prices on both beers and strong alcohol starting Monday, the company says, taking the hit on existing stock which was bought at the higher prices, pre-excise duty cut.

"More than 300 products, primarily from local producers such as A. Le Coq, Saku and Liviko, have come into effect following the duty reduction," said Kaim Niitaru, Prisma buying director.

"As a result, for example, the beer prices have dropped on average by €0.14 and the price of strong alcohol by €1.50," he added.

Any further price changes will hinge on the effects of new prices on manufacturers and suppliers, and the speed with which existing stock is sold, Kaim added.

Lithuanian-owned chain Maxima followed suit from Monday.

Marko Põder, CEO of Maxima Estonia, said that prices would fall on at least 17 alcoholic beverage products, with an average drop of €0.10 on a bottle of beer and €1.50 for half a liter vodka.

Again, existing stocks and suppliers revised prices will also have an effect going forward, Põder said.

Meanwhile at Coop stores, the 600 most popular product prices are to fall this week, directly in proportion to the drop in excise duty, plus VAT, said Martin Miido, Coop communications manager told ERR's online Estonian portal.

Selver is set to introduce its revised prices on Thursday, the supermarket says, with about 500 products being affected, according to company spokesperson Rivo Veski.

"[Selver price cuts] are delayed by the fact that tomorrow we launch of a massive campaign at Selver. During this time, stores will be focused on campaign-related products," Veski said, adding that a proportional price drop in line with the duty cuts is likely.

As much as the price of alcoholic beverages has been reduced by the producers of alcoholic beverages, they are also reduced proportionally by Selver, "said Rivo Veski, communications manager at the store.

He forecast approximately the same drops in prices on beer and vodka as the competitors noted above had cited.

Finally, Rimi, too, has not altered its prices yet, but would be likely to in the coming days, according to supermarket spokesperson Katrin Bats.

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Editor: Andrew Whyte

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