Romania: Beer market could contract by up to 10% this year due to tax hike, Brewers Association warns

Romania beer market could contract by up to 10% this year, given it is already at its lowest in the last 20 years, following the Government's decision to increase the excise duty on beer for the second time this year and to increase VAT from 19% to 21%, the Romanian Brewers' Association warns.

'The Government's decision to increase the excise duty on beer by 10% in August of this year, after a 4.3% increase in January, risks causing major negative effects for the beer industry, despite a limited budgetary gain. Added to this there is the significant impact of the increase in the Value Added Tax (VAT), from 19% to 21%, but also of its increase in the hospitality sector. In this context, the beer market may contract by up to 10% this year, in the context in which it is already at the minimum of the last 20 years', the Romanian Brewers said in a release for AGERPRES on July 3.

According to the cited source, the cumulative 15% increase in beer excise duty in 2025 is the most aggressive so far and comes in a fragile economic context, in which Romanian consumers are faced with inflation, falling disposable income and a new restrictive fiscal package.

'In October 2024, after three years of successive increases in the excise tax on beer, completely outside the provisions of the Fiscal Code, the Romanian Government together with the producers in the sector agreed on a predictable calendar for increasing this tax: by 4.3% in 2025 and by 5% in 2026. Less than a year after this convention established by Emergency Ordinance, we are returning to the old practices that are completely unsustainable for the business milieu. We do not believe that a sector or an economy can grow under conditions of predictability that, in Romania, does not manage to exceed six months. This counterproductive approach will have long-term negative effects for producers, consumers and the public budget, despite the current expectations of the authorities,' declared the general director of the Romanian Brewers Association, Constantin Bratu.

The Romanian beer sector directly and indirectly supports over 60,000 jobs and contributes approximately 400 million euros to the state budget annually. A decrease in consumption, generated by higher taxes, will especially affect small producers, distributors, raw material growers and the HoReCa segment. The latter will also be deeply affected by the VAT increase from 9% to 11%. At the same time, from a product with the lowest alcohol concentration and zero alcohol, 100% taxed, namely beer, consumption will migrate to the illicit area, of untaxed alcohol products and with major risks for consumers' health, warn the brewers.

In the 20 years of the association's existence, its members have reached a level of direct investments of 2 billion euros and have contributed 5 billion euros to the state budget.