05 August, 2005

Italy: Beer consumption decreased two years in a row due to the excise rise

Italian beer consumption has decreased by 2.2% in the first half of 2005, compared to the same period last year and fell by 7% over the first half of 2003. The figures were reported on August 3 in a statement by Assobirra, the Association of Italian Brewers. "This is a very disturbing trend which is in sharp contrast to what is happening for other summer beverages," observed Assobirra Chairman Piero Perron.

Assobirra pointed out a 9% consumption decline in July 2005, which is minus 14 million litres compared to July 2004. Beer consumption in July decreased by 19 % in comparison to July 2003 that is 35 million litres less. 17 million litres less beer were sold between January and July 2005 in Italy compared to the same period in 2004 and 58 million litres less compared to the first half of 2003.

Italian beer sales have dropped by 58 million litres in 2004 compared to 2003.

"It's a worrying trend, opposite to the summer one of other beverages. Yet 68 % of Italians declare they drink beer and appreciate its qualities and nutritional factors. In fact, 38 % know it’s a low calory drink. The consumption drop is due to the excise rise, which raised the cost of beer, right in the middle of a tight economic situation for the Italians" said Assobirra president Piero Perron.

In January 2004, Perron recalled, duties on beer production jumped 14% and in March of this year they leapt another 24%, "five-times the increase applied for spirits and hard liquor." And it's only going to get worse, he added, because in January 2006 another 14% hike is slated. "The bottom line is that in the space of two years taxes on beer will have gone up 90%," Perron pointed out .

But in the end, the Assobirra chairman observed, "the state is only shooting itself in the foot because the decline in beer consumption has resulted in a drop in revenue from sales tax, lower income for producers has meant less corporate tax and inevitable job layoffs have resulted in workers paying less income tax and contributing less to social security and welfare .

"This situation is severely hurting the Italian beer industry, which producers 73% of the beer consumed in Italy. And this is why the upcoming tax hike must be revoked," the Assobirra chairman said.

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