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Price increase of 23 percent and higher? “No, thanks!” said Greeks and cut on their favorite drink, the coffee. Greek coffee? Frappe with instant coffee? Filter coffee or espresso for Cappuccino or Freddo? Exorbitant prices due to the Special Consumption Tax forced Greeks to more austerity and cuts and turned their back to the beverage they love most.
The Special Consumption Tax imposed on roasted and instant coffee two years ago had especially pensioners and youth to think twice before they would sip on the country’s top beverage.
According to data released by the Hellenic Coffee Association on Tuesday, the total demand is moving with a negative percentage, a change of 6.8% (data for August 2015 – December 2016 as compared to January 2017 – June 2018) as a result of the special consumption tax on coffee imposed on 1. January 2017.
In 2018, the sales volume decreased by 1.9% when compared to 2017.
This Special Tax brought to the state additional €122.7 million in revenues in 2018, compared to €90.4 million in 2017. At the same time, though, the phenomenon of illegal imports and smuggling increased. It is estimated that illegal products swallow 10% of the legal market.
The Special Tax imposed on roasted coffee is €3 per kilogram, on instant coffee and coffee products is full 4 per kilo.
The Special Tax increased the price at 10%-30%, doubling the cost of the raw product.
The biggest consequence of the tax was observed in the supermarkets shelves with an increase of 23% and of 30% for the Greek coffee in average retail selling price.
In real Greek life, the price increase recorded proud 88%, though. Based on KTG’s prices monitoring, a 500-gr package of plain filter coffee like from Jacobs reached €8.85 at the supermarket shelves from €4.85-€5.10 previously. Six months ago, suddenly the same product had a new price increase and is to have at €9.12. The increase occurred for no obvious reason as neither the package changed nor its average taste.
In a press conference on Tuesday, chairman of the Hellenic Coffee Association, Giannos Benopoulos, said that for the second consecutive year of the Special Tax imposition, the coffee consumption has declined. H called on the government to abolish the Special Consumption Tax and to create a legislative and regulatory framework for the product and the sector as a whole.
From the demographic analysis of the consumer’s profile, the price increase affected to a greater extent the weaker socio-economic classes, such as pensioners and young people.
At the consumption level, the decrease as a whole reached 15% in the first two months of 2018, when compared to 2016, and went even higher in certain categories.
40,000 tons of coffee are consumed in Greece, with 40% of the consumption to be consuming off-home and 60% to be domestic consumption.
Regarding the Greek’s preferences, Greek coffee is top choice with 32%, followed by instant coffee with 30%, espresso with 28% and filter coffee with 10%. The ratios refer to in and off home consumption.
Greece is one of the countries with the highest per capita consumption of coffee in the world. In particular, consumption reaches 510 cups per person per year, which translates into a total annual consumption of 5 billion cups.
The post Greeks’ bitter Coffee: Special Tax skyrockets prices, decrease consumption appeared first on Keep Talking Greece.
