Following the rejection of their lawsuit by Albania’s Constitutional Court, local beer producers are preparing to take their case to the European Court of Human Rights in Strasbourg, aiming to overturn the current excise tax law. The legal representative of the Albanian Association of Alcoholic Beverage Producers and Traders, Saimir Laçej, and the President of the Albanian Craft Beer Association, Xhim Begeja, expressed their intent to continue fighting if the new fiscal package does not reflect changes in the excise tax levels.
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According to lawyer Saimir Laçej, after the government’s decision to double the excise tax, local producers are facing several challenges, including a significant drop in domestic production, the increased market share of imported beer—now up to 60%—and the disregard of the European Union directive that supports reduced excise rates for small producers. Laçej stressed that Albania, as a country seeking EU membership, should align its excise policy with European standards.
Laçej pointed out that the government’s fiscal policy, particularly the excise hike, has severely impacted domestic beer production. He stated, "The fiscal package for 2025 should reflect the opinions of the minority and the facts that local production has decreased, failing to meet the goals of this rushed measure. The drop in domestic production is accelerating."
Despite the Constitutional Court ruling in favor of the government, Begeja said the battle for a fair excise tax will continue. He noted that the minority opinion from some Constitutional Court judges accurately reflected the challenges faced by local producers, who are losing ground due to the excise tax doubling.
Impact of Excise Hike on the Beer Market
The excise increase has drastically shifted the beer market in Albania. Imported beer now accounts for 60% of the market, up from 42% in 2016, according to customs data. In 2015, imports held a 40% share, growing to 51% by 2022, and 60% by 2023. Local producers predict that by the end of 2024, imported beer could dominate up to 70% of the market.
Adrian Kostaqi, administrator of "Korça" and "Tirana" beer factories, previously told Monitor that the doubling of the excise tax has caused a frightening increase in imported beer sales, pushing local production toward collapse.
The Constitutional Court’s Decision
After reviewing the lawsuit filed by the Association of Alcoholic Beverage Producers and Traders, Albania’s Constitutional Court upheld the new excise law on July 16, 2023. The law, which came into effect on January 1, 2023, unified the excise rate for beer producers, removing the previous differentiated rate that considered annual production volumes. The association had sought a partial repeal of the law, specifically provisions that unified the excise tax for all beer producers regardless of output.
The court’s ruling stated that the legal changes did not violate the core of economic freedom nor endanger it to the extent that would undermine its existence. Therefore, the unification of the excise tax was not deemed disproportionate.
Dissenting Opinion and Arguments Against the Excise Hike
The minority opinion from two Constitutional Court judges disagreed with the ruling, arguing that the excise law violates the principle of proportionality. They stated that the law does not reflect the excise rates used by the majority of EU and Balkan countries and instead aligns Albania with nations that impose the highest excise taxes.
Moreover, they argued that the law fails to apply a reduced rate for small producers, as mandated by an EU directive. Additionally, the minority opinion highlighted that the increase in excise tax does not address tax evasion, given that Albania’s beer industry is already monitored through a tax stamp tracking system.
Since January 1, 2023, the new excise law has effectively doubled the excise rate for small beer producers (those producing under 200,000 hectoliters annually), raising it from 360 lek/HL to 710 lek/HL. Local producers argue that this significant increase has disproportionately impacted smaller breweries, further enabling the dominance of foreign beer brands in the market.
As the local beer industry faces declining production and increasing competition from imports, Albanian producers are determined to pursue legal avenues at the European Court to challenge the excise policy and protect the future of domestic beer production.