THE SPIRITS INDUSTRY IN A NUTSHELL
THE CONTRIBUTION TO THE GREEK ECONOMY
The total impact of the spirits sector on the economy is allocated to its four basic stages, that is, production, wholesale and retail trade, and distribution to on-trade consumption channels. According to IOBE’s study (“The spirits sector in Greece”, 2020), the total contribution of the spirits sector is particularly significant, both in terms of GDP and income and in terms of employment.
In particular, the total effect for 2019 (direct, indirect, and induced) on the GDP reaches €2.3 billion, while the generated taxes and contributions reach €517 million.
The income from labour reaches €480 million and includes the income of persons employed in the spirits supply chain (production, wholesale trade, bars, restaurants, hotels, supermarkets, mini markets, etc.), as well as the income from the activities created by all those links through consumption.
Finally, a particularly important effect concerns the employment in the spirits sector, estimated at 66.5 thousand persons.
EXPORTED ALCOHOLIC DRINKS
68% of the quantity produced is exported. The Greek Spirit industry has been gradually reducing its trade deficit. In particular, the industry has significantly reduced its deficit from €152 millions in 2010 to €76 millions in 2019.
Ouzo remains the main export product of Greece Distillery. Last year, Greece’s distilleries exported 70% of their Ouzo’s production. Also, 26% of the production of tsipouro/tsikoudia exported.
ALCOHOLIC DRINKS & TAXES
The tax policy applied in Greece must be in line with the provisions laid to the relevant Community directives which have introduced rules on the structure and amount of excise duty imposed by the Member States on alcoholic beverages in order to ensure the proper functioning of the internal market and fair competition between different categories of alcoholic beverages.
The tax regime was stable for alcoholic beverages in Greece, until 2009.
Alcoholic beverages have undergone eight tax increases since 1998, with four of them having taken place over 18 months in 2009-2010, leading to a doubling of Excise Duty on alcoholic beverages from EUR 1,135 per 100 liters of ethyl alcohol in 2008, to EUR 2,550 with the last increase in July 2010. The overall Excise Duty increased 87% in 2010 compared to 2009 and 125% compared to the 2005-2008 tax regime.
The taxation of alcoholic beverages is a significant source of public revenues in Greece. Indicatively, the excise duty revenues from spirits (national and imported) reached €291 million in 2019.
According to the official data of the European Commission, Greece is in a group of EU countries with a high contribution of spirits in the tax revenues from alcoholic beverages (> 50%).
The Excise duty on spirits in Greece is in high levels compared with other EU countries.
Indicatively, the country currently holds in terms of Excise duty (euro per100 litres of ethyl alcohol)
• the highest position in the ΕU-27 , in relation to in relation to the average per capita income,
• the 5th highest position amongst all ΕU-27 countries in absolute rates
• the highest spirits excise tax – by far – amongst the neighbouring European countries and countries competitive in the tourism sector
o 4.5 times higher than the neighbouring countries (Bulgaria & Fyrom)
o 3 times higher than Serbia and Croatia
o 2.5 times higher than Cyprus, Italy, Spain
o 2 times higher than Portugal, Malta, Montenegro
The excise duty takes up the largest part of the final price.
In 2019, its participation amounted to 35.7% in the final price of a typical spirit (while in 2009 – before the increase in rates – the excise duty reflected 29.6 % of the final price).
Taxes (excise tax and VAT 24% ) currently represent the biggest part of the price of a typical spirit, reaches to 55.1% of the retail price of a typical spirits drink.