Alcohol is unequal to alcohol - also in the price. And it is not only about the differences in the price of alcoholic beverages of various kinds. Also in the same product segment, we can find products that differ significantly in terms of the amount of their purchase. Have you ever wondered what exactly affects the final price of alcohol?

Taxes, production, marketing and margin

A whole host of factors influence the final price of alcoholic products. We can start here with the production process itself. Depending on the quality of the ingredients used and the manufacturing process itself, the price of alcohol will vary. The scale on which it is produced will also have an impact on the final cost of the product. Often local, craft beers are even several times more expensive than well-known and large alcohol brands. This is due to the scale of production and the distribution of its costs. Contrary to appearances, large producers have the opportunity to offer much cheaper products. Small producers of lattice beers have lower turnover and higher production costs, which translates into the final price of their products. On the other hand, they often offer higher-quality drinks and a unique recipe, which also raises the price.

The final price of alcohol is also influenced by the brand's marketing (large promotional campaigns have to pay off in some way), the margin of the store or wholesaler where the product is offered, and, of course, taxes. And these can affect the price of alcohol to a large extent!

What influences the price of beer?

The price of beer is primarily influenced by factors such as the method of its production and the type of raw materials used to produce the golden drink. The ingredients alone are estimated to be around 40% of the final cost of beer production.

What exactly do you need to make beer? The list of basic ingredients in brewing is not long: water, malt, hops and yeast. And although it may not sound too complicated, the prices of these ingredients can be different. Even the water itself can have an impact on production costs! A brewery will rather pay a lot if he uses the municipal water supply, but he can save a lot if he has his own drinking water intake at the production plant.

Also, prices for yeast, hops and malt can vary, and the cost of transporting them should be taken into account. In the case of a fairly popular type of barley malt, it can be estimated that the average cost of raw materials needed to produce one beer (0.5 l) is PLN 0.80. However, this is not the end of production costs. Let's remember about energy and the operation of machines. The price of beer is also influenced by its packaging: the producer has to pay for the bottle as well as the design and production of labels and caps. The cost of labor of the brewery employees is also important - after all, they must also receive appropriate remuneration for their work.

What influences the price of wine?

As with beer, the final price of a wine is influenced by many factors, ranging from the cost of maintaining the vineyard to the way it is distributed and sold. The very place where the vineyard is founded can affect the price of the drink! Why? And because places with great potential and good conditions will in themselves be much more expensive than average and less fertile lands. Among other important factors to consider are:

  • production mechanization level,
  • costs of laboratory equipment and work,
  • vineyard equipment,
  • control of the amount and size of yeast,
  • fruit inspection process.

We also cannot forget about the production process: wines from rare grape varieties, aged for a long time and stored in barrels will be more expensive than the so-called wines. "Fast production". Finally, the final price of the wine bottle will be influenced by the label and cork (production costs, finishing, material used), the way the liquor is packaged (wine in a carton or wine in a glass bottle), transportation costs and distribution efficiency.

What influences the price of vodka?

As you can guess, the type and quality of raw materials will also affect the price of vodka. The final price of each "half liter" is made up of the prices of cereals (or potatoes), electricity, employment costs, gas and fuel (transport issues). Glass should also be taken into account - after all, what like what, but vodka in a carton is unlikely to be sold. The production process itself can have a significant impact on the price - both in terms of the quality of the drink and its marketing image.

But how does this translate into the cost of producing one bottle? Analysts estimate that the production price of one bottle (0.5l) of vodka is about 8.6% of its retail price. So what is the rest? As you can probably guess - taxes, excise duties and store margins!

Alcohol-flooded taxes

If we look closely at the calculations, we will quickly notice that VAT and excise taxes have a huge impact on the final price of alcoholic products. And although the excise duty is intended to "protect the health of citizens", discouraging them from frequently consuming alcoholic beverages, the revenues generated by it are a considerable profit for the State Treasury. Especially since the amount of excise tax is constantly growing. Already on January 1, 2022, the excise duty on alcohol increased by 10%, and according to the government's schedule, further increases are planned in the coming years, which means that we have at least PLN 13.81 of excise tax on one bottle of vodka. Is the growing concern for the health of consumers the reason for the increase in excise duty? It is hard to say, considering that, according to sales statistics, the demand for alcohol is not decreasing at all - only market trends change to a certain extent.

The government itself seems to be under no illusions. Especially that due to the increase in excise duty, it does not matter how much less alcohol Poles drink, but how much the budget revenues increase. So the assumption is one: even if it is more expensive, consumers will still buy alcohol. It is estimated that the planned excise tax increases will increase budget revenues by as much as PLN 103.7 billion within 10 years, and in 2022 alone - by PLN 2 billion.

We have intentionally not mentioned the share of excise duty and taxes in the final price of individual alcoholic drinks. Nevertheless, for each type of drink, the share of excise duty in the final retail price is different. It is the highest in the case of vodka - here as much as 75% of the final price of a bottle is constituted by excise duty and VAT (according to the calculations of the Employers' Union "Polish Spirits Industry"). In the case of other drinks, this share is smaller. For beer, VAT and excise duties are 35%, and for wine - 26%.

It is worth noting that from the perspective of the region, the highest excise duty on alcohol is in Poland. Assuming that for one bottle of vodka (0.5 l) the cost of excise duty is PLN 11.41 in Poland, it is less in neighboring countries: in Germany PLN 10.80, in Slovakia - PLN 9.03, in the Czech Republic - PLN 8.68, in Ukraine - PLN 3.81.

Increase in excise duty and consumption trends

While the increase in excise duty on alcohol will not discourage people from buying it, some changing trends in tastes can be observed in recent years - at least if we take a closer look at the profile of the Polish consumer. On the one hand, the position of vodka as "native" strong alcohol seems unwavering, it can be noticed that recently Poles are consuming more and more wine. Yes, it is on the one hand cheaper (and the excise duty is lower), although this taste should not only be seen in financial matters, but also in cultural and social changes.

Interestingly, along with the increase in alcohol prices, the interest in more exclusive drinks grows. Many consumers prefer to invest in noble liquors (fine vodkas, wines, whiskey and brandy) of high quality and unmistakable taste. Does this mean that Polish consumers are not so indifferent to their health and prefer to eat better-quality products, even if they are more expensive?