Industry faces higher taxes
FINLAND´s tax-afflicted soft drink´s industry will once again feel the force of a cash-strapped government´s need to generate more revenue from existing excise-based income streams.
The Finnish government´s national budget for 2012 includes a target to raise an additional €60million from increasing the levy on soft drinks and unsugared beverages such as bottled water.
Protests by the Brewing and Soft Drinks Industry Federation (BSDIF) that the new higher tax is unethical and represents an unfair burden on the sector have largely fallen on deaf ears. The government claims that the so-called ´sugar tax´ falls within its anti-obesity health programme.
However, this is disputed by the BSDIF, which contends that the tax has more to do with raising money, pointing to the inclusion of unsugared products, such as bottled water, in the tax net. Moreover, the BSDIF says the tax will cause soft drinks sales to fall and distort price competition in the beverage market segment.
“One field of industry cannot be constantly treated as a cash cow. If operating conditions become too tough in Finland, we should keep in mind that the industry enjoys a far more favourable production environment in Estonia,” said Elina Ussa, the BSDIF´s Managing Director.
The federation has warned the government that the industry should not be taken for granted, observing that heavy taxation of alcohol and soft drinks put jobs and investment at risk. The industry employs 2,300 people directly, and almost 24,000 indirectly in Finland.
Finland introduced its controversial tax on soft drinks and sugared products in January 2011, with the tax levied at a rate of €7.5 cents per litre on sugared and unsugared soft drinks. The tax was originally intended to generate €80million annually. The 2012 budget means that this target has been revised upwards to a yearly tax yield of €140million.
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