68
0
0,2
0,4
0,8
0,6
1
Of which
exports
Production
0
20
40
60
80
100
120
1
Purchases
of supplies
Value added
Production
value (million €)
Million
hectolitres (hl)
43
0,3
1.700
0
500
1.000
2.000
1.500
0
10
20
30
40
50
60
Employment
Taxes, excise and social
security contributions (ssc)
brewing sector (million €)
5
19
25
Excise
VAT retail
VAT hospitality
Incomes taxes
and social
security
contributions
4
2 | Market structure, trends
and developments
3 | Direct effect
of the brewing sector
Latvia, with a population over two million people has
a beer production which totalled 1,455,000 hectolitres
in 2010. The four largest breweries in Latvia have
a combined market share of some 70%, more than
half of which is accounted for by the market leader.
47
Latvia has experienced a signifcant increase in prices
as well as salary increases until 2008, which resulted
in relatively high on-trade prices. As a result, the
considerable numbers of tourists travelling to Latvia
motivated by the price of food and alcoholic beverages
changed their destination. Since “party tourists” were
major demand drivers in on-trade alcohol consumption,
their reduced presence, combined with a decrease in
purchasing power for local consumers, resulted in a sharp
decrease of on-trade consumption patterns in 2009. Since
2010, on-trade consumption has stabilised. Nevertheless
the on-trade percentage (6%) is very low compared to
other countries. Due to the economic situation, including
the decrease in salaries over the last 3 years, Latvians
prefer to drink off-trade because it is cheaper, and brands
choice is also price driven.
It is expected that the Latvian government will impose
stricter legislation, which may involve such steps as
increasing the legal drinking age from 18 to 20 and
other restrictions on alcohol consumption. There is also
a discussion going on about a beer advertising ban on
TV. These developments in combination may lead to a
decrease in beer consumption in the long term.
The direct economic impact of the brewing sector covers
more than 4,000 employees who together produce beer,
representing a value of 1,408 million euro. Compared to
2008, the total value decreased by 3.4%. However, the
direct economic beneft of the brewing sector for the Italian
economy is still signifcant.
47
Euromonitor International “Alcoholic drinks in Latvia”, January 2009.
›
Graph 23.1. / Direct effect
›
Source : Ernst & Young calculation (2011)
The Contribution made by Beer to the European Economy
146