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Drinks

Norway Sees Record Tax Revenues From Beverage Sales Following Border Closure

Norway has seen a surge in tax revenue from the sale of beer and soft drinks, which has largely been driven by the country's decision to close its border with Sweden due to COVID-19, a leading industry body has said.

Bryggeri- og drikkevareforeningen, the Norwegian Brewery and Beverage Association, estimates that the state's tax revenues from soft drink and beer sales increased by more than NOK 700 million (€66 million) in the summer months.

Sales Increase

In July alone, the group said that soft drink sales increased by 54.7%, compared to the same month the previous year, while beer sales were up 20.3%.

"On beer alone, the increase in sales leads to an increased tax take of NOK 318 million in June and July, compared with the same period last year," Bryggeri- og drikkevareforeningen director Erlend Vagnild Fuglum commented, adding that Norway has "never before" seen such a high tax return from the beverage sector.

"At the same time, the state's revenue from soda tax has increased by NOK 85 million," Fuglum added.

"If you include VAT and other taxes, we estimate that the tax revenues from soft drinks and beer have increased by more than NOK 700 million in the summer months alone."

Government Measures

Norwegian shoppers that live close to Sweden traditionally engage in cross-border shopping of beverages due to the lower taxes on products, a measure that Bryggeri- og drikkevareforeningen says needs to be addressed by those in government.

Commenting on the latest findings, Fuglum asked politicians to undertake measures to "move the trade home", pointing to the example of Denmark, which has almost halved its cross-border trade with Germany for many of the same reasons.

As things stand, all border regions in Sweden apart from Norbotten and Västerbotten in the north of the country, are classified 'red' according to COVID-19 safety rules, meaning that Norwegian citizens are not permitted from entering them.

Back in July, Bryggeri- og drikkevareforeningen said that drinks sales in the grocery channel had 'increased significantly' as a result of the closed border with Sweden.

Last week, Svensk Handel, which represents the Swedish retail sector, noted that the closure of the border has had a 'devastating effect' on trade in the border regions, prompting calls for 'common ground' on tax measures across the Nordic region.

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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