Reduced alcohol tax for beer from independent craft breweries

Kalle Olsson (S)

Mr. Speaker! Regardless of whether one likes craft-produced beer or not, I believe we can be broadly in agreement that the large increase in smaller breweries that we have seen in Sweden over the last perhaps 20 years has brought with it much positive. We have seen the emergence of smaller companies, not least in the countryside, and we as consumers have been enriched with a greater diversity of products.

These are products that, just like the local cheeses and the local breads, become a kind of cultural carrier and a hallmark of the place one comes from. I personally come from Jämtland, and we have the great fortune of having a large and rich range of microbreweries. We think that is fun and we are happy about it.

That it has become popular to drink and produce craft beer does not mean that it is a flourishing industry. On the contrary, many smaller producers testify to rather tough economic conditions. A break-even result is seen as a success, and negative figures are unfortunately not uncommon. The rising inflation of recent years, higher prices, and reduced purchasing power have truly put hard pressure on this industry.

Given the radically different conditions that exist between, on one hand, being a locally anchored producer - perhaps in the countryside, with long distances and so on - and on the other hand, a multinational giant, with the economies of scale and the advantages of scale that lie in that, it is reasonable that we now adjust the tax for the smaller producers. It is simply a matter of leveling the playing field a bit.

Sweden is in no way the first country to make such a differentiation of the alcohol tax, but rather belongs to the exceptions within the EU. The norm is therefore that countries apply different tax rates.

With the legislative changes proposed in the report, the alcohol tax for beer from independent microbreweries will be reduced according to a scale. The producers covered will be divided into five different categories. Those with the smallest production will receive a reduction of 50 percent, and then a tapering of 10 percentage points per category is made. The reduction will cover beer from producers whose annual production amounts to at most 3 million liters of beer.

But, someone might object, in Sweden, governments of different colors have throughout the years chosen to raise the alcohol tax, often with the arguments that too much alcohol can be harmful and that we see a great deal of social problems in the wake of alcohol. These are naturally very important perspectives to carry with you and to be humble before in such a debate. It should, however, be pointed out that craft beer is usually found in the higher price segment. If one has been out in the student life, one might know the concept of alcohol per krona. It can be so that the wallet is small but the desire for partying is great. For those who want to maximize the amount of alcohol per krona, this type of product is not the first choice, and the assessment must be that even with a tax reduction, there will still be significantly cheaper alternatives.

This tax cut may possibly be noticed a little on the price. Perhaps it will not be noticed on the price at all. Rather, it is about creating somewhat more reasonable conditions in the production chain.

We Social Democrats share the assessment that the reduction of the tax is reasonable and in itself does not entail an increased risk for public health or total consumption. It is, however, naturally important to follow the outcome of this change.

However, Mr. Speaker, there is every reason to raise a warning finger regarding the broader change and opinion work currently underway within the Swedish right regarding increasing the accessibility of alcohol. It is clear that the change we are making now is not an isolated issue for the government, but it is seen as part of a larger plan where also farm sales and perhaps other changes are included.

In the extension of the debate on farm sales, the Social Democrats see obvious risks for the retail monopoly's position. The very idea of the monopoly, to sell alcohol without a profit motive, has indeed proven to be one of the most effective ways to safeguard public health. At the same time, Systembolaget's infrastructure - in connection with the report we have before us here today - enables capable and driven entrepreneurs to reach out with their products.

I guess that more members from here at the rostrum will praise the craftsmanship and all the pleasant products produced at the country's microbreweries. The problem is that the policy the government is pursuing now risks jeopardizing Systembolaget's position and thus also the microbreweries' conditions. All of us who value the microbreweries and want to guard the craftsmanship should, in addition to lowered taxes, seek ways to facilitate for the microbreweries to reach out to more people through Systembolaget's channels and not weaken Systembolaget.

I vote in favor of the proposal in the report.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Anders Ådahl (C)

Mr. Speaker! To discuss how small-scale entrepreneurship in a good culture can be developed is, naturally, something that goes straight to the heart of a Center Party member.

I have recently visited seven or eight small breweries. I am from western Sweden myself, and all visits except one have been in the vicinity of where I live. They all tell roughly the same story. They seem to be under quite tight economic circumstances. The changes they want to see are partly about the tax issue, which we are debating here today, partly about increased opportunities for farm sales, and partly about a removed food requirement. Many see it as a problem that in Sweden one is forced to offer a menu with food when serving alcohol.

Let me say, Mr. Speaker, that the Center Party welcomes the government's bill, which concerns lowering the alcohol tax for beer from independent craft breweries. We also welcome the scale that is proposed, with a differentiated tax rate with five levels.

The background is that there is an EU directive according to which it is possible for member states to apply reduced tax rates. The reduced tax rates may not fall below 50 percent of the standard tax and may not be applied to companies whose annual production exceeds certain levels, as it stands, for example 20 million liters of beer. If I am correctly informed, and in connection with what the previous speaker from the Socialdemokraterna said, it is only Spain and Sweden that until now have not utilized this opportunity. Now, however, it is time for Sweden to do so.

Centerpartiet has been pushing the issue of farm sales for about twenty years. We have not pushed the issue of a reduced tax rate for quite as long, but still for quite a few years. Is it a matter of us being particularly interested in increasing alcohol consumption among Sweden's population, Mr. Speaker? No, that is not the case. There are strong reasons to consider public health and broad alcohol consumption. A craft-brewed beer with a certain alcohol content might cost 25-30 kronor at Systembolaget, while a mass-produced pilsner might only cost 11-12 kronor. If one has a particular fondness for alcohol, one might choose the 11-kronor can rather than the 30-kronor can. We are therefore not particularly concerned about increased alcohol consumption, which is also pointed out in the bill.

One reason why we support this is that we see the matter from a business perspective and particularly from a small business perspective. The second reason obviously has to do with rural development. The production of a food item - grain - can be used for a locally produced product that can be interesting when it maintains extra good quality.

From the business perspective, it is the case that development often occurs in some form of "Skurva" when operations are to grow from a small level to a large level. Economic theory suggests that it is a good idea to support small companies in early stages so that they can grow. If we want to see greater opportunities for small breweries to increase their volumes, it is wise to have specific economic incentives.

It is here that we in the Center Party differ slightly from the government. In a follow-up motion, we have proposed that the volume limit for what constitutes a small brewery be changed from 3 million liters of beer per year to 5 million liters of beer. It may sound like it is just two different figures, but as we see it, this would increase small breweries' opportunities to grow and, if they so wish, take the step up to a higher volume class. We want to maintain the steep scale for the phase-in of the alcohol tax but adapt it to the limit of 5 million liters.

Centerpartiet finds that the government has an inconsistent definition of small breweries in this context. In the parallel project to move forward with farm sales, it is spoken of that small-scale and artisanal production shall have a volume limit of 400,000 liters of beer, but according to the tax proposal we are debating here, the limit shall therefore be 3 million liters. Centerpartiet wishes that the government takes this back, so that we get a harmonized picture and description of what a small brewery actually is.

I would like to move for approval of the Center Party's reservation.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Eric Westroth (SD)

Mr. Speaker! Today we are debating the Committee on Taxation's report on reduced tax on beer from independent craft breweries. It will create better conditions for a flourishing and innovative part of Sweden's business sector: our small and independent breweries.

The Sweden Democrats have since 2020 pursued the issue of a differentiated alcohol tax for small breweries, and now we stand, not a day too early, together with the government here in the chamber with a bill on just this.

To be a small brewery in Sweden today means operating in a market dominated by larger actors with significantly greater resources. The beverage industry can, somewhat generally, be considered a process industry where the economies of scale with large production volumes are enormous.

At the same time, we know that craft breweries play a role for both the local economy and local culture. My party group has visited several Swedish craft breweries in recent years, and it has been fantastic to personally see the enthusiasm and professional pride with which one runs their brewery. They also contribute innovation, creativity, and unique products that consumers truly appreciate.

These breweries are also often strongly rooted in their local communities, where they create jobs and build a sense of pride in the local production. But it is no secret that the competition is tough and that the economy for many craft breweries is strained. The year 2024 was a bleak year, when several craft breweries went bankrupt, were forced to close down, or were simply put on ice in anticipation of better times.

Inflation, interest rate hikes, price increases on raw materials and lower economic margins for consumers are some of the burdens that have hit the industry. The previous government's decision on the premature dismantling of dispatchable power production, which at times has resulted in sky-high electricity prices, particularly in electricity trading area 4, has also entailed enormous pressures not only for the brewing industry but for the entire Swedish business community.

At the same time, Swedish producers of alcoholic beverages have been forced to work against the wind when it comes to politics. Sweden has a number of regulations and a policy that perhaps does not always favor Swedish production and consumption of these goods, many times for good reasons. But now we think it is time to improve the conditions for those producers and goods that have a very small extent of negative impact on public health or other social issues that overconsumption of alcohol can bring with it.

With this proposal, the Sweden Democrats, together with the government, seize an opportunity that exists within the EU's alcohol tax directive, namely to give smaller and independent beer producers reduced alcohol tax. It is an opportunity that almost all other EU countries have already chosen to exploit, and now it is time for Sweden to follow suit.

As a previous speaker said, it is only Sweden and Spain that have not used the exemption. The reason why Spain has not done so is that their alcohol tax is approximately one-tenth of the Swedish one, which would have resulted in more administrative work rather than support for the breweries.

As previously stated, according to EU regulations, the tax reduction may not fall below 50 percent of the standard tax rate, and it may not be applied to companies with an annual volume exceeding 20 million liters of beer. The company must also be independent from other larger actors.

The Sweden Democrats' and the government's proposal sets an upper limit for when one can be covered by the tax reduction, and that is at an annual production of 3 million liters of beer. It is a level that clearly excludes large-scale industrial production but which at the same time gives the smaller breweries the opportunity to grow without immediately losing the advantage they have received through the reduction.

Given that the EU's limit is 20 million liters, one might think that our proposal of 3 million is stingy, but since 97 percent of Sweden's beer producers have a production volume that falls below half a million liters of beer and thus qualify for the maximum tax reduction of 50 percent, we still create better economic conditions for almost all small breweries to scale up their production, develop new products, and reach more customers.

As a curiosity, it can also be kept in mind that only 1 percent of the Swedish breweries have an annual volume exceeding 3 million liters of beer per year, but at the same time, this single percent of breweries accounts for a full 95 percent of the total volume of Swedish beer production.

Mr. Speaker! Contrary to what one might be tempted to believe, this reform is also well-considered when it comes to public health. As I pointed out earlier, the Sweden Democrats and the government have just stated that craft breweries account for a very small part of the total alcohol sales in Sweden and that their beer is also in the upper price segments.

It is therefore unlikely that a tax reduction for these actors would lead to any noticeable increase in the total consumption of beer or have any noticeable negative effects on public health. It is a balanced and responsible measure that both promotes the business sector and allows us to stick to our Swedish alcohol policy.

Mr. Speaker! Certainly, the proposal will entail a smaller administrative burden for both the breweries and the Swedish Tax Agency, but since the breweries already report their volumes to the Swedish Tax Agency today, in order for the proper alcohol tax to be paid, the Swedish Tax Agency already has the information needed to determine which level of tax reduction the small breweries qualify for.

Furthermore, the Swedish Tax Agency already has routines and tasks for issuing certificates for small-scale production of alcoholic beverages. If a Swedish small-scale beverage producer wants to export its products to another EU country that already applies the EU's possibility for tax reduction for small producers, the producer must apply for a certificate from the Swedish Tax Agency regarding how many liters of beer they produced last year or plan to produce this year.

Mr. Speaker! This proposal is not only a reform for the benefit of small breweries. It is also a reform for all of Sweden's business sector. By supporting these small companies, we send a clear signal that innovation, quality, and local entrepreneurship are values that we cherish.

We strengthen Swedish brewing tradition and create conditions for more Swedish products to be able to reach the market, both here at home and internationally.

The proposed reform, which will enter into force on July 1 this year, is a welcome step towards making Sweden an even better place for entrepreneurship and innovation.

I am convinced that the proposal, together with the Sweden Democrats' and the government's upcoming proposal on the possibility of farm sales, will give our small breweries a much-needed boost forward and at the same time enrich Sweden's beverage culture, tourism industry, and local communities.

With this, Mr. Speaker, I wish to emphatically urge approval of the proposal in the report in its entirety.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Marie Nicholson (M)

Mr. Speaker! On Monday, I drove past Ängöl, a microbrewery in Kalmar. I went there to hand over a copy of the bill that we are debating today. It was, in fact, the owner of Ängöl, then chairman of Sveriges Oberoende Bryggerier, who first took the initiative to hold a seminar here in the Riksdag and informed about the possibility of introducing a differentiated excise tax on beer.

It was 2019, and even then, Sweden stood out as one of the last countries in the EU that had not adopted the exemption. Some motions in the matter had been submitted before 2019, but after the first seminar, interest increased. Numerous are the Members of Parliament who have submitted motions on the issue. Many of them are Moderates, but absolutely not all.

It is interesting to see that this is an issue that has engaged broadly. Perhaps it is the Members of Parliament's burning interest in craft beer that has played a role, but I still want to believe that it is primarily the aspect of justice that has engaged.

Swedish companies, regardless of industry, shall not have worse conditions than their European counterparts. We shall not over-interpret the EU's directives. We shall not make things more difficult for or disadvantage our companies, and we shall also not refrain from simplifications or tax reliefs when these are possible.

Mr. Speaker! Sweden has a fantastic food and drink culture. The interest among our citizens in the unique and the locally produced is an important element in an area's attractiveness. To try the local beer when visiting a new city is, for many, an experience that enhances the visit.

Many microbreweries link their products to the town and emphasize the local character. I have visited breweries that highlight an area's history, draw attention to local historical figures or brewing traditions, use local artists' works on the labels, or name their beer with a distinct local character.

Figeholm, for example, is a small village with fewer than 800 inhabitants, but it is also the name of a beer. Another beer is Rätt Sida Bron, which naturally comes from Öland. The craft breweries are one of the highlights of the tourism industry.

But what I am standing here and talking about as craftsmanship and local culture is the result of companies driven by more engagement than profitability. The recent years have been extremely tough for the small breweries. High energy costs, sharply increased raw material prices, inflation, and high interest rates have caused many consumers to prioritize away their products.

In 2023, as many as 68 percent of Sweden's craft brewers reported either a loss or a zero result. Many microbreweries have unfortunately had to close. Today's decision is absolutely crucial for almost an entire industry.

Of Sweden's microbreweries, 97 percent produce less than 500,000 liters per year. Most of these actually fall below 100,000 liters. According to the proposed new tax rates, they would receive a 50 percent reduction of the excise tax from July 1 of this year. For Ängöl in Kalmar, that corresponds to approximately one full-time position. It is about new job opportunities, about investments in companies, about product development, or simply about turning red figures into black.

I have so far not met any brewer who would primarily aim to reduce the price for the consumer, but even if a brewer chooses to lower the price, this is not a public health issue. Sweden's craft breweries account for a vanishingly small market share, and craft beer would still belong to Systembolaget's more expensive beer assortment.

The tax reduction is designed so that it decreases gradually as production increases. It disappears completely after 3 million liters, but within 3 million liters, all of Sweden's craft breweries are included, most with good or very good margins to grow. A brewery must be legally and economically independent from another beer producer, and one is not allowed to brew under license.

The proposal is judged not to make any significant difference for the competition for those, 1 percent, of Sweden's breweries that are too large to be covered by the lower excise tax.

I regret, finally, that it has taken so long to get here on an issue that the vast majority of us have agreed on. I send a compliment to the government and our coalition partner because we can now finally provide these entrepreneurs with much better conditions. I find it extra amusing that, when it concerns a proposal that a Kalmarbo once raised in politics, it is another Kalmarbo today who gets to say: I move for approval of the proposal.

The deliberation was hereby concluded.

(A decision was to be taken on 13 February.)

The speech at riksdagen.se, in Swedish (opens in a new tab)