Sales of spirits soar after cut in import duty

Consumer purchases of spirits have increased significantly in the past few weeks due to dramatic cuts in import duties for foreign spirits.

Consumer purchases of spirits have increased significantly in the past few weeks due to dramatic cuts in import duties for foreign spirits.

Major Swiss retailers such as Denner, Coop and Pick Pay said Wednesday they had noted a marked increase in sales and turnover since the July 1st cuts, even though they declined to come up with any figures.

Swiss authorities somewhat played down the sales increase. Officials admitted that turnover increased by up to 50 percent immediately after the import cuts were introduced. But the authorities point out that many customers apparently believed that the cuts were a one-time measure.

The reduction in import tax made prices for foreign spirits tumble by up to 50 percent. A bottle of Jack Daniels whiskey, for instance, dropped from SFr59 ($39) to SFr28($19); a bottle of Ballantines whiskey now costs barely SFr20 ($13) – which is half the previous price.

Analysts say that some of the price reductions in the retail sector are also due to less rigid import regulations and the resulting competitive pressure.

Officials point out that the more attractive domestic prices have led to fewer purchases of spirits abroad. Before the price reductions came into force, about one in five bottles was purchased abroad.

While spirits prices in the retail sector clearly have tumbled to record lows, there has been no such development in Swiss restaurants or bars.

Many restaurant and bar owners argue that wage and labour costs have remained the same. And analysts point out that the sales of spirits in restaurants only account for two percent of turnover.

From staff and wire reports.