The increase in beer excise taxes threatens investments

A sharp increase in excise taxes on beer, proposed in the draft budget for the next three years, may lead to the freezing of investment projects in the brewing and related industries in the amount of about 33.5 billion rubles in 2025. According to the experience of 2009, such an increase in excise duty has already caused the industry to shrink by 40% and the shadow market to grow by up to 20%. The new project plans to raise the excise tax on beer from 26 to 30 rubles per liter in 2025, with a further increase to 32 rubles by 2027.

Previously, the stabilizing tax policy contributed to an increase in market transparency and an increase in legal beer production by 9%, according to Rosstat data for eight months of 2023. In the first half of the year, budget allocations from the brewing industry increased by 18.2%. Annual indexation of excise taxes in accordance with projected inflation could support the development of the industry and increase the revenue side of the budget.

A number of measures are also proposed to improve the situation, including an increase in duties on imported beer and the establishment of reduced excise rates for low-alcohol beverages. The Union of Russian Brewers also considers the increase in excise taxes to be the main risk for the brewing industry.