After temporary closure, beer factories in Albania are considering transferring production to Serbia

The reason remains the high cost of doubling the excise on January 1st and the price of raw materials (Malto horn and ambaljation), which brought increased domestic beer prices more than import prices.

A producer confirmed to “Monitor” that he will see the possibility of shifting the factory towards Serbia, since investment is more convenient than production costs and subsidies from the state.

“With tax hikes, such as the excise that was equated with the level of importers, set-up of fines, endless and meaningless tax checks, customs and AKU, we will see the possibility of opening the factory in Serbia. The only ones we feel sorry for are our employees. The situation in the brewery sector is in crisis. ”

In addition to increasing the excise, producers were also hit by the rise in the price of malt beer of import on January 1st. On January 1st 2022 the price of imported malt beer was 420 euros/Ton, while on January 1st 2023 it is selling twice as expensive (including the increase in prices after the start of the Ukraine-Russia War).

Earlier, Albanian Manufacturers' Association Chairman Stefan Pingulki says that because of the price of costs, the lack of sale from the expansion of the low price foreign beer market several factories closed production for January-February months. Povli added that doubling the excise risks eliminating Albanian production, due to increased weight of imported beer. According to him, the import burden risks reaching up to 80% of the market.

For 2022 according to Customs data, domestic beer production slightly decreased 2% compared to 2021, while imports increased 4%. The weight of imports in beer consumption for 2022 is 56% out of 44%, which was about 1 decade ago.

The country's production prior to fiscal changes has been taxed with 360 leks/ HL for producers under 200,000 Hl, while for production on this level of excise was 710 leks. Following the adoption of amendments to the law “For excises in the Republic of Albania” the tax was unified at 710 leks under and over 200,000 Hl, both domestic and foreign.

Changes in the excise law were accompanied by strong debates by interest groups. The local Beer Producers' Association several times called on parliamentary commission hearings that the new fiscal measure would bankrupt the sector and risks leaving 1,000 unemployed people.

The Ministry of Finance argued that this differential has favoured domestic producers, as well as the data of the Directorate General of Customs, has created and space for avoiding excise duties.

“also, it has caused small producers not to attempt to increase production in order to preserve the low level of excise”, cited in the resolution of the envisioned law.

The effect predicted in the state budget by the increase in excise is about $260m.