Business
Beer and wine sales plummet in first quarter
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May 7th, 2012
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Border shops disagree with retailers that numbers are down due to taxes and increased cross-border sales
Beer and wine sales fell by seven percent in the first financial quarter, and retailers suggest that tax increases and more Danes than ever taking their booze business down south are the reasons.
According to the Coop shopping chain, one of the main catalysts occurred on January 1 when the government raised wine taxes by 3.50 kroner a litre and beer taxes by seven kroner per crate.
"It’s not because the Danes suddenly became teetotalers on New Year’s Day,” Coop food manager Jens Visholm told Politiken newspaper. “There are indications that convey that they are simply driving to the borders and getting their wine and beer there.”
And it seems like it’s mostly people living in the rural areas that are driving down to Germany to restock their booze shelves.
Coop recently made a regional examination of their wine and beer sales and concluded that in Copenhagen sales had only fallen by a couple percent while in southern Jutland, sales had dropped by a staggering 20 percent.
“The sales deficits are larger the closer you get to the German border,” Visholm told Politiken. “This decrease has already resulted in lost jobs. That’s how unforgiving it is in reality.”
But this scenario is not something that German border shops, such as Fleggaard and Calle, recognise. They have seen a slight increase in beer and wine, but credit a mild winter, rather than the new tax, for the increased business from Danes.
“We have experienced an increase in beer and wine sales, but certainly not to the degree that justifies the seven percent decrease in Denmark," Fleggaard's general manger, Mike Simonsen, told Politiken.
Within the halls of Christianborg, there was a different spin on the falling sales numbers.
“It is interesting that the border shops have only registered a slight increase in sales, and even blame it on the weather,” Jonas Dahl, Socialistisk Folkeparti's tax and health spokesman, told Politiken. “That suggests that the slumping sales are due to the Danes becoming more aware of the health risks involving alcohol abuse.”
The Tax Ministry is scheduled to release a new border trade report sometime before the summer period.
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