In the coming years, the excise tax on alcohol will rise in Latvia, and this could hit small breweries the hardest. Producers warn that the price increase could be the final blow to an already struggling industry, reports TV3 News.
Starting next year, the excise tax on alcohol and tobacco products will be increased. Small beer producers are particularly concerned — their future looks very bleak.
The government has supported amendments to the excise tax law, which provide for an increase starting in 2026. The Ministry of Finance explains that the goal is both to increase budget revenues and to reduce the consumption of harmful products.
A sharper increase is expected for strong alcohol.
According to the Ministry of Finance's calculations, a 0.5-liter bottle of strong alcohol will rise in price by about 27 cents in 2026, and by about 50 cents by 2028. A bottle of beer will increase in price by about 3 cents.
The industry states that existing restrictions on trading hours have already severely impacted businesses, and the increase in excise tax — and, most importantly, the uncertainty regarding potential new rate hikes — do not create a favorable environment for development.
"We are concerned that the legal market is shrinking, the excise tax plan is not being fulfilled, people are consuming fewer alcoholic beverages or starting to buy illegal ones — the same colognes. The industry finds it difficult to understand where this 'trend' is leading," noted Davis Vitols, Executive Director of the Latvian Alcohol Industry Association.
Particularly bad news for brewers. Starting March 1, 2028, the excise tax on beer will increase by an average of 10%. This means that half a liter of beer will rise in price by about three cents. There is a gloomy mood among the Latvian Society of Independent Brewers.
"Right now, I am on a business trip in Romania, where the excise tax on beer is five times lower than in Latvia, as well as in Germany and Belgium, where the excise tax is significantly lower. The new excise rates did not particularly surprise anyone in the industry. Since the restoration of independence, the excise tax on beer has increased 15 times, while on strong alcohol — only 3.5 times. If I believed in conspiracy theories, I would say that after taking the oath, deputies go into a dark room to pledge allegiance to strong alcohol producers," said Reinis Plavins, Chairman of the Latvian Society of Independent Brewers.
Overall, the changes will bring more than 30 million euros in additional revenue to the state budget over the next three years.
