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Planned booze tax hikes would hurt restaurant sector, lobby warns

The labour market group says that higher alcohol taxes will cause diners to stay home, leading to restaurant job cuts.

Kampin Teerenpelin ravintolapäällikkö Miika Korpela kaataa olutta hanasta.
Image: Annika Martikainen / Yle

Finland's restaurant and tourism sector enjoyed significant growth in the beginning of the year, but the Finnish Hospitality Association (MaRa) has warned that planned alcohol tax hikes could hurt workers in the sector.

The restaurant and tourism industry grew by more than five percent last year. Growth was particularly brisk in the fast food business, with sales increases of 7.1 percent during the first quarter of 2019, compared to the same period a year ago.

But, MaRa, a hospitality industry trade and labour market group, said it is worried that planned tax increases on booze will hurt that growth. Prime Minister Antti Rinne's new government plans to raise alcohol taxes by about 50 million euros.

The labour market group said that higher alcohol taxes will cause consumers to stay at home to imbibe rather than go out, saying that it would lead to job cuts in the restaurant and bar industry.

MaRa's deputy general manager, Veli-Matti Aittoniemi, said the country's alcohol taxes are already high.

"Finland is already at the top of the EU regarding its alcohol tax levels. If government raises taxes again it will result in alcohol increasingly being consumed on park benches," Aittoniemi said.

EU:n myötä alholin tuontirajoitteet muuttuivat.
According to industry figures, alcohol consumption at Finland's restaurants and bars has decreased by one third since 2003. Image: Juha Hintsala / Yle

According to industry figures, alcohol consumption at Finland's restaurants and bars has decreased by one third since 2003.

Roughly during that same period - from 2003 to 2018 - the personal import of alcohol has increased by 61 percent, while domestic booze sales in shops and bars have decreased by 13 percent and 32 percent respectively.

An increase in personal imports is again expected later this summer, when Estonian booze taxes will be slashed by 25 percent on 1 July. Over the past few years Estonia has been raising alcohol taxes steadily but instead of drinking less, residents - and visitors - increasingly headed south to Latvia where alcohol taxes are lower.

Among EU countries, Finland has the highest tax levied on beer, and the second-highest taxes on spirits and wine. Finland raised alcohol taxes by 30 million euros annually at the beginning of this year and the government plans to further increase taxes by 50 million at the beginning of next year.

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