The taxation of wines will tighten significantly at the turn of the year, when both the level increase and the index increase come into effect. Alko’s finance manager estimates that the tax increase may show as a sales spike in the days in between.
Alko prepares for the traffic jams at the end of the year by ensuring good product availability. Pete Anikari
With the decision of the Parliament, alcohol taxation will be tightened on January 1. This time, the tax increase will especially affect wines and other fermented beverages, such as ciders.
Alko’s financial manager Tomi Overman says that the wines are subject to a so-called double increase.
– Wines and other fermented beverages will be increased by a nine percent level increase. In addition, all drinks with a strength of more than 2.8 percent will be subject to a 1.4 percent increase based on the harmonized consumer price index.
The index increase comes on top of a nine percent increase in wines. In practice, wine taxation will increase by about 11 percent.
The tax increases will be transferred directly to consumer prices, if the suppliers decide to transfer the increases to the prices in full.
– Calculated for a 0.75 liter bottle of wine, the increase is 46 cents.
Alko has given suppliers the opportunity to raise prices at the turn of the year, but no more than the tax increase. The supplier can also make a smaller increase if he wishes.
Impact on demand
Tax increases usually decrease the demand for that product group. Överman predicts that the wine sales trend will be negative at the beginning of the year.
– Here there may be some transition from wines to other product groups, which have a clearly lower increase than in wines. That remains to be seen.
In addition to taxes, sales are also affected by the general economic situation, which is currently holding back household demand, as well as beverage trends.
An open question is also how the growing tax difference between Finland and other countries affects distance sales.
Busyness can be expected at the end of the year
The new taxes come into effect on the first day of the year. Halfway through this year, you can still get drinks at the current, lower tax level.
Since the increase for wines is exceptionally large, Alko is preparing for a busy final year.
– When such a large increase is focused on wines, it is quite possible that there will be a little movement in the customer base on New Year’s Eve or in the days between Christmas as a whole, Överman estimates.
On New Year’s Eve, Alko’s stores are open until 6 p.m. According to Överman, Alko has ensured good product availability for the rest of the year.