Prices Of Alcohol And Tobacco On The Rise Again - The Reykjavik Grapevine

Prices Of Alcohol And Tobacco On The Rise Again

Published December 24, 2013

Levy on tobacco and alcohol will increase at the beginning of the New Year, for the seventh time since the 2008 crash. Levy on snuff will by then be five times higher than it was five years ago.

The national budget for 2014, which was recently passed in parliament, entails that levy on alcohol and tobacco will increase by 3%, in proportion to the predicted inflation for next year.

This means that, unless suppliers change their tariffs, the price of beer will rise by 1,5%, red wine will cost 2% more and vodka will be 2,5% more expensive on New Year’s Day, RÚV reports.

When the crash happened in October 2008, levy on alcohol hadn’t changed for over three years. Now, it’s being raised for the seventh time since then.

If indeed the rise this time will be a flat tax on all products, it means that the levy on beer will have increased by 60.3% since the crash; levy on wine will have risen by 60.2% and levy on spirits will have increased the most, by 62.8% since 2008.

This is almost double the increase of general price levels at the same time, which rose the most during the first year after the crash.

Levy on cigarettes will be almost double what it was before the crash but levy on snuff will have multiplied as this latest increase means the levy will have risen by 450% – not the least because at the beginning of this year, it doubled already.

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