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Georgian Beer Sales Fell 45%

Georgian Beer Sales Fell 45%

In March-April, sales of the local beer producers fell 45%. For this reason “Natakhtari”, “Zedazeni” and “Castel” companies call on the government and the Ministry of Finance to reverse the decision to increase excise tax on beer by 50 percent, which entered into force on 1 March 2015.

According to Nukri Khundzakishvili, Corporate Affairs Director at “Natakhtari,” the situation was aggravated by the introduction of restrictions on beer consumption in public places, which also led to sales decline. Leading beer companies say that in comparison with the previous year, in March-April the sales decreased by more than 40 percent, which negatively affected the company’s activities and the beer industry. He says if nothing changes, the beer market will down 20% . As a result, both the population as well as business and budget will suffer.

Khundzakishvili believes if the beer market shrinks in the long run and the overall 100 million -liter beer market falls to 80 million liters, companies will have to reduce staff. At this stage, there is no such need. The companies say that such a growing and thriving sector, like the beer industry, where 97 percent of the market is occupied by local businesses, such regulations both in the short and long-term are harmful and would have a negative impact on the other sectors.

“Natakhtari”, “Zedazeni” and “Castel” are asking the Government, the Parliament and the Ministry of Finance to start talks with representatives of the industry in a timely manner to abolish the regulation and work out mechanisms for the beer market development. Nukri Khundzakishvili calls for the government to listen to the business ombudsman, who has presented a positive conclusion regarding their request. He notes Zurab Tkemaladze also shares the position of the beer producers and therefore, they hope for changes in a positive way.

Recall that in protest against the increase in excise duties on beer, Georgian breweries launched a campaign “Do not make beer more expensive.” Brewers believe that the fiscal effect will be minimal, and will not compensate the negative processes which will begin after that. However, the government has not changed its decision and has not compromised. Beer producers are also asking for the abolition of restrictions on beer consumption in public places.