Greece hikes drinks tax, VAT

Greece hikes drinks tax, VAT

Drinks retailers and wholesalers are coming under pressure in Greece as duty tax increases ordered within the government’s tough austerity programme start to bite.

Excise duty on spirits has risen three times since the beginning of the year - by 20% in both February and March and 30% in April.

Duty now comprises at least 65% of the bottle price at retail, while value added tax (VAT) has also increased from 19% to 21%.

Greek authorities are expected to raise VAT to 23% later this month as they attempt to rebalance the country's finances.

The figures highlight how Greece's financial crisis is directly hitting the drinks sector.

Athens-based wholesaler Aris Roditis told just-drinks this week that it expects sales to fall by 25-30% this year.

Bar owner Nikos Sarikas said: “I have not raised my prices for the last couple of years but now I will have to. I am also looking at reducing the measures I serve.

"The clients are getting fewer, those who come drink less and putting the prices up is not going to help.”

A bottle of Metaxa three stars brandy with a shelf price of EUR10 (US$12.5) constitutes EUR8.26 in tax.