Breweries demand tax cuts due to massive cost increases

When it comes to beer output, the Austrian beer industry can be quite satisfied: the total output increased by four percent to 10.29 million hectoliters. Domestic sales increased by five percent to 8.77 million hectoliters, exports by one percent to 1.52 million. However, the industry is currently suffering from massive cost increases, said Siegfried Menz, chairman of the Austrian Brewery Association and Ottakringer boss.

However, the beer producers are not satisfied with the cost development. “The high cost pressure will also accompany us in 2023 and is probably the biggest challenge for the domestic brewing industry this year. It is a burden primarily for small and medium-sized breweries,” said Menz. And the increases would “not be passed on 1:1 to trade and gastronomy”.

The brewing industry, which generates an annual tax payment of 700 million euros, therefore expects support from politicians. The demands of the brewers: VAT on draft beer must be halved. This would benefit both the catering trade and consumers. With 1.5 million hectoliters of draft beer, they would save around 40 million euros a year. “Secondly, we call for the beer tax to be halved to the level of the beer-loving neighboring countries,” added Menz. “Thirdly, we are in favor of expanding the beer tax volume scale to include breweries with an output of 50,000 to 200,000 hectoliters,” said the association’s chairman. In the Czech Republic, the VAT for draft beer is only 10 percent, while in Austria it is 20 percent. The beer tax is 5 cents per mug in Germany and 8 cents in the Czech Republic. In Austria, on the other hand, 12 cents have to be shelled out.

Small and medium-sized breweries in particular would benefit from the tax breaks. “We don’t make any money – neither with tax breaks nor with price increases,” said Menz.

There are currently 349 breweries in Austria that are represented in the Association of Breweries, Menz said at a press conference. This means that 25 breweries have been added.

Camps/Marches top the popularity chart

As in previous years, “Lager-/Märzenbier” leads the ranking of the most popular types in Austria with around 6 million hectoliters and a 68 percent market share, said the Managing Director of the Brewery Association, Florian Berger. This means an increase of three percent. The other types of beer are also showing almost constant growth. “Other Vollbier” recorded an increase of nine percent (plus 103,209 hectoliters), Pils +28 percent (+51,713 hectoliters), wheat +27 percent (+20,791 hectoliters) and special beer of 20 percent (+57,456 hectoliters). Sales of alcoholic shandy increased by 10 percent (+28,477 hectoliters).

Menz added that women tend to try different types of beer. After the lockdowns, draft beer increased sharply by 78 percent. However, according to Berger, “we are still around 18 percent below the pre-Corona level of 2019. The pandemic-related shift in consumption from gastronomy to your own four walls is still a reality”.