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Alcohol Tax Cut Hurts Bars and Restaurants

The Finnish restaurant business was one of the most enthusiastic supporters of last year's cut in the tax on alcoholic beverages. However, the impact of the move appears to be the opposite of what the catering sector had hoped. In fact, drink sales at Finnish pubs have actually declined for the first time since the recession of the 1990s.

Last year sales at licensed restaurants in Finland declined for the first time since the recession of the 1990s, and a poll of bar owners suggests that there is widespread pessimism about the future.

Competition in the field is intense, and sales in the restaurant business have not kept pace with the number of new watering holes opening up. Restaurant sales have not recovered after the recession as well as other sectors of the economy, and increasing numbers of venues are competing for customers.

The main impact of last year's tax cut has been an increase in retail sales and drinking at home. However, experts do not believe that an increase in the tax would help the situation in this point, and restaurants feel that the best strategy is to focus on food rather than drink.

Sources: YLE24