The decree on increasing taxes (OG 16/2022) increases excise duties on alcohol. There has already been a tax increase (by 5%) since August 1st, and there will be another one, most likely 15%, since January 1st, as manufacturers are now waiting for data from the INS.

If the 5% increase was partially offset by liquor producers due to a reduction in the profit margin, then the increase on January 1 will be too high. Practically, this would put them in the red. So we will most likely see a price increase to stay in the market.

In the calculations below, I have chosen what is consumed the most (food, drinks). Of course, there are some more refined varieties of alcoholic beverages, but the price is acceptable, and we do not know what the overall markup of the manufacturers is.

If you want a good rum or wine at a special price, you will have to pay several hundred lei.

For an alcoholic drink of 16 lei “per dozen”, the price would rise to 17 lei.

We’ve kept the weights suggested by the Romanian Spirits Association (although they may vary slightly from range to range and producer to producer) to get an idea of ​​what price increases we’ll see from January 1st.

If we keep the current costs of manufacturers, a bottle of 0.7 l:

• Pălincă – 35 lei (current price) – this should reach 36.78 lei

• Vinars (VSOP) 50 – 80 lei (current price) – will reach 52.55 lei – 84 lei

• Vodka 30 – 60 lei (current price) – will reach 31.5 – 63 lei

• Whiskey 40-67 lei (current price) – will reach 42-70 lei

• 36 rom – 70 lei (current price) – reaches 37.9 – 73.5 lei

Obviously, these are only indicative calculations. Each manufacturer has its own costs and will make its own decisions, perhaps restructuring personnel, reducing marketing costs, lower margins (which today are quite low – 2%). Let’s not forget that at the same time the raw materials used in this industry, such as glass or labels, have become more expensive.

The battle will be with large commercial chains

“The local producer received higher prices than the global one because it has a different volume. I work at Pernot Ricard, I give an example with Absolut vodka. Well, when I negotiate 100 million bottles with a supplier, it’s different than if I go to negotiate 10 million bottles,” said Tudor Furir, president of the Romanian Spirits Association.

According to him, in addition to the fact that all prices have increased, alcohol producers are also being pressured by retailers.

“Don’t think it’s dolce vita with them. It’s a battle in the trenches year after year. It is not easy. This is a fight over terms of trade. Does not accept price increases. The ball is essentially in their court. They sell our products, not us,” Furir said.

The problem is that when the price of alcohol went up, people turned to bootleg products, which is what Tuesday was all about.

“If we don’t sell anymore, people will be able to buy booze in Bulgaria or make it at home,” said Florin Redulescu, a member of Spirits Romania.

Photo source: Dreamstime.com