Increase in excise tax on alcohol not reducing consumption in Ukraine – expert

Ukrainian economist Yevhen Oleynykov has said practice shows that an increase in excise tax rates on alcoholic beverages has not reduced their consumption in Ukraine.

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According to the expert, Ukraine plans to increase the excise tax on alcohol and tobacco annually during the next decade. So, retail prices of the relevant products will obviously grow automatically with an increase in minimum indicative prices, he told the Ukrainian online news outlet Obozrevatel on June 7.

In Ukraine, there is a certain category of consumers who buy high-quality alcohol with an official excise from official manufacturers. The said consumers are not too concerned about price hikes due to the fact that their incomes grow faster or at the same rate.

Another category includes people who drink low-quality alcohol, which is usually sold under the counter, choosing beverages based on their affordability.

The third category involves buyers of high-quality alcohol, which is sold on the Internet without excise. They also do not worry about the price.

So, the situation is that when alcoholic beverages rise in price, as was in previous years, an increase in excise tax will not cause a reduction in alcohol consumption, the expert summed up.