Tax increases on beer could be “catastrophic”

A plan to increase taxes on alcoholic drinks such as beer could be catastrophic for Portugal’s beer sector at a time when the sector is already weakened not only because of war and inflation, but because it is still recovering from the pandemic.

Francisco Gírio, general-secretary of Cervejeiros de Portugal (The Portuguese Beer Association) says that the tax hikes of 4% on alcohol and alcoholic beverages outlined in the State Budget of 2023 is unjustified and disproportionate.
In an interview with Diário Económico he severely criticised the government’s choice, stressing that it would worsen the already catastrophic difference regarding the way the authorities tax
beer more than wine.
This he says harms the competitiveness of national producers compared to Spanish ones. In the medium term, Francisco Gírio expects that the decision to increase taxes will lead to the closure of beer sector companies, putting “thousands of jobs” at risk.
In Portugal IEC/IABA (alcohol, petrol and tobacco tax) and VAT on beer is 23%, but wine does not pay IEC/IABA tax and only pays 13% VAT.