Increased alcohol price floors to replenish state budget, ‘kick out’ unscrupulous producers from market – opinion

Increasing the minimum wholesale and retail prices for alcoholic beverages by 50%, provided for by bill No. 11416d on introducing a number of amendments to the Tax Code of Ukraine, will have a positive effect on the country's alcohol market, Volodymyr Pechko, head of the public union Ukrsadvinprom, said in a commentary to Interfax-Ukraine.

He recalled that the minimum retail prices for wine and vodka products have not been raised since 2018, despite the fact that they are regulated by the Cabinet of Ministers.

"This will lead to an increase in tax revenues to the state budget and will resolve the issue of counterfeit products," the head of the industry association said.

Pechko drew attention to the fact that currently there is very cheap wine on store shelves, which is of extremely low quality.

"Such a product sometimes costs UAH 40-45/l. And compare this price with juices, which are significantly more expensive – this cannot happen in principle. In order to sell cheaply, bad producers are forced to mix something into their product or dilute the wine with water. Accordingly, the decision proposed by parliament will 'kick out' unscrupulous producers from the market," the head of Ukrsadvinprom explained.

Pechko confirmed that as a result of such actions by parliament, wine will become more expensive for the end consumer, also noting that this process in the country began a long time ago in relation to alcoholic beverages. He explained the rise in prices for wine and vodka products by the rise in gas prices, which led to an increase in prices for glass containers. In addition, in the 2024 season, plant protection products have become more expensive, and the price of grapes is breaking records, having jumped almost twofold.

"If wine has not become more expensive, then this should raise questions for the consumer and should worry him. An increase in the minimum retail price by 50% for alcoholic beverages is a very modest increase in price. Currently, the minimum retail price, which is subject to excise tax, is UAH 42/l, while it should be at least UAH 95/l," Pechko said.

The head of Ukrsadvinprom advised consumers to choose wine on store shelves at a price of no less than UAH 130, UAH 150, or UAH 200 per bottle, so as not to risk their health and be confident in the quality of the product they are purchasing.

As reported, the Verkhovna Rada adopted the law (No. 11416d) on amendments to the Tax Code on the specifics of taxation under martial law, which envisages an increase of the military tax from 1.5% to 5%, and the tax on bank profits to 50% for 2024 from October 1 of this year. Other new regulations include the introduction of advance payments on the profits of gas stations, linking the advance payment rate for currency exchange offices to the euro, increasing the minimum tax liability for agricultural land and increasing the royalty for crushed stone extraction, but at the same time exempting citizens from taxation of funds received under the national cashback program.