From January 1 alcoholic beverages excisetaxes will be increased.
“Commersant” has found that excise tax rate per 1 liter of beer might become GEL 0.80 instead GEL 0.40. Apart from wine, excise price for all other types of alcoholic beverages will hike as well.
How this decision will affect domestic production, what is a position of spirits producers in this regard,“Commersant” addressed this question to several companies.
The MP Gogi Topadze says that the issue of price rise in the excise tax on alcoholic beverages is included in the Parliament’s agenda and such a sharp increase in the excise tax can harm local production.
“In Georgia, the purchasing power is very low. It will be a blow to domestic production. This hike will not increase revenues in the budget because no one will be able to buy such expensive drinks. Therefore, we will discuss, argue, debate in Parliament. We’ll demand to lower excise price, in order to protectthe local manufacturer, “- Gogi Topadze notes.
Alcohol excise tax issue included in the agenda will be discussed in the committee on Wednesday or Thursday.
Zaza Tabagari, a consultant for strategic planning of Gomi, states that price of the company’s productswill rise just as much as the excise tax will hike. However, the price may rise even more, because the excise price is an integral part of the final product that can also lead to the VAT tax increase.
“People will continue to consume alcohol in the same amount, although the sales of products will drop. Alcohol users will prefer to buy relatively cheap drinks. In any country when the price goes up, the high-quality products sales fall. People switch to low quality products until a new reality is established, “-Zaza Tabagari points out.
According to David Nizharadze , Director of marketing and sales service of Castel company, the company has not outlined its position on this issue yet. In his words, the market will dictate prices. Nizharadze does not rule out that despite the excise tax rates increase, the price for their products will remain unchanged. However, the company will take the final decision after the new price is set.