Spirits sales under pressure in Spain

Spirits sales under pressure in Spain

Spain's decision to increase sales tax on spirits could trigger a 10% decline in drinks sales and the loss of 22,400 jobs in the sector, according to leading trade association Federacion Espanola de Bebidas Espirituosas (FEBE).

The IVA tax rise, introduced to boost the Government's coffers, will exacerbate an already "strong fiscal pressure" on the industry, which employs 250,000 people, said FEBE this week.

Higher tax will hurt bar and restaurant drinks sales, which account for 70% of total sales in the country.

"This measure will definitely have a negative impact on sales," FEBE general manager Jaime Gil-Robles said, adding that FEBE is bracing for another year of "sustained recession."

The on-trade saw sales drop 12% last year and 11.2% in 2008 amid Spain's deep recession.

FEBE urged the government to revise the new excise tax rate on spirits, which already pay more tax than other beverages.