Polands spirits producers are facing a hefty tax hike

Poland's spirits producers are facing a hefty tax hike

Poland's spirits industry has urged the country's prime minister not to press ahead with plans for a 15% rise in tax on the category. 

The Polish Government is expected to formally announce the proposal next week with the increase on spirits excise tax due to take effect in January. However, Polski Przemysl Spirytusowy (PPS), the Polish spirits industry trade body, has warned against such a significant hike. 

Leszek Wiwala, PPS's president told just-drinks today (17 September): “We asked the prime minster to reconsider the size of the increase, for it to be more progressive. If the rise is less, they can then assess the impact in a year's time.” 

Wiwala pointed to the example of Lithuania, where a 13% tax rise in 2009 meant the spirits market “totally collapsed”, he said. A similar rise would not impact Poland as badly, Wiwala said, but there are “risks” which are “hard to predict”. 

The proposed tax hike will only affect spirits, not beer and wine. Wiwala said there had been “no official explanation” for this. 

Poland's spirits producers, the majority of which are still vodka firms, have suffered recently, with 25% of companies reporting a loss in 2012. Exports were also down 20%. 

Meanwhile, Paul Skehan, director general of Spirits Europe, warned European governments not to regard the spirits industry as a “cash cow”.  

“We have real concern that a turning point has been reached,” he told just-drinks. “We are reaching a point where tax increases will decrease the amount of tax coming in.” Spirits Europe says this situation has already been reached in Portugal, Greece, the Czech Republic and Lithuania.