The recent reduction in the tax on beer and soft drinks in Denmark has not been passed down to consumers in the country, according to local research.

In July, the Government okayed a 15% cut in the tax on beer and soft drinks in Denmark. However, a report by the country’s labour-run economic policy institute, Arbejderbevægelsens Erhvervsråd (AE), has claimed that, instead of reducing retail price, brewers have mainly used the tax cut to strengthen profit margins.

The Government had hoped the tax cut would bolster domestic sales and stem rising imports of cheaper beer and beverages from neighbouring Germany.

The AE’s latest August figures reveal a 0.1% decrease in beer prices for the month, while retail prices for soft drinks fell in the month by 0.5% year-on-year.

“It’s obvious that prices did not fall much, otherwise the general tax cut would be reflected in the prices paid by consumers in stores,” said AE analyst Frederik Pedersen.

Earlier this year, the Danish Government confirmed its intention to remove a decades-old levy on soft drinks in the country.

Expert analysis

Beer in Denmark

Beer in Denmark

Beer in Denmark industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2008-12, and forecast to 2017). The profile a...read more