Beer sales increased by up to 50% due to heat wave in Peru

In the midst of an intense heat wave that we Peruvians are facing, beer sales have experienced a notable increase and reached figures that range between 40% and 50%, according to the Peruvian Winery Association. However, the gradual application of the Selective Consumption Tax (ISC) has generated rejection from the brewers’ union due to the impact it would have on their profits..

Despite the economic recession that affected the sale of this alcoholic beverage, whose production fell by 5.1% between January and September 2023, Andrés Choy, president of the Association of Winemakers, highlighted that this new increase in the sale of beers represents an undoubted improvement for this sector at the beginning of the year.

By how much did beer sales increase due to the heat wave in Peru?

The increase in beer sales due to the heat wave in our country has been significant. According to the statements given by the president of the Peruvian Winery Association, Andrés Choy, to RPP, “In this summer campaign, the heat is very strong and there are many people who consume beer as a strong element to cool off, which has increased sales by more or less 40 or 50%.”

As is public knowledge, this product is important for the profits of winemakers, since it represents approximately 25% of their transactions. Despite this bonanza, the brewing unions have shown their rejection of the increase in the Selective Consumption Tax (ISC) because it would negatively impact their economic recovery, considering that consumption of the alcoholic beverage increases this season.

ISC increase: how will it affect the price of beer?

Last Tuesday, February 21, the Ministry of Economy and Finance confirmed the modification of the Selective Consumption Tax (ISC) for beer, which will be applied gradually. That is, it will go from S/2.31 in March to S/2.41 and to S/2.51 in July, which represents an increase of S/0.10 in each section, as established by Supreme Decree 014 -2024-EF.

Faced with this MEF measure that is carried out to discourage the consumption of these products due to their possible negative effects in the personal, social or environmental sphere, Andrés Choy expressed his concern because it would harm sales in the summer campaign and their margins would be reduced. of profit.

“We would have preferred it to be in April, not March, because the summer campaign ends in April. So right now we are almost halfway through the summer campaign and, therefore, we are going to have a month where we don’t know how much we are going to sell. We live off the penny, so our profit margins are pennies. We are talking about S/2 per case (of beers) that the wineries earn,” he told RPP.

Finally, the spokesperson for the wineries indicated that a new increase is expected, since this update of the ISC corresponded to 2023. “Manufacturers fear that, as these measures have been suspended, the tax has been accumulating. For this reason, the Beer Chamber is concerned, because possibly there will be a greater increase in the price of the product. We don’t know what price the factory is going to give us,” he stated.

Since when will the price of beer go up?

According to Supreme Decree No. 014-2024-EF, which confirms the modification of the Selective Consumption Tax for beer, the gradual increase that will be applied to this product will be in two tranches of S/0.10, which we explain below:

• On March 1, the ISC for beer will be S/2.41 per liter
• On July 1, the ISC for beer will increase to S/2.51 per liter.

How much will the ISC rise on cigarettes and other liquors?

In addition to beer, other alcoholic beverages and cigarettes will be affected by a new Selective Consumption Tax:

• Cigarettes: from March they will rise from S/0.36 to S/0.37
• PTC: these tobacco products will increase from S/0.30 to S/0.31 per unit
• Pisco: will rise to S/2.48, after spending two years at S/2.27 per liter
• Drinks with 0 degrees to 6 degrees of alcohol: will increase from S/1.25 to S/1.33 per liter
• Drinks with 6 degrees to 12 degrees of alcohol per liter: will increase from S/2.5 to S/2.68
• Drinks with 12 degrees to 20 degrees of alcohol: will increase from S/2.7 to S/2.89 per liter
• Drinks that exceed 20 degrees of alcohol: will increase from S/3.63 to S/3.97 per liter.

Selective Consumption Tax: when was the last adjustment?

Through Ministerial Resolution No. 021-2022-EF/15, the Ministry of Economy and Finance updated the fixed amounts for products subject to the Selective Consumption Tax in 2022. This adjustment included a small increase in taxes of three goods such as cigarettes, alcoholic beverages with 20 degrees and pisco, with respective increases of S/0.01, S/0.08 and S/0.05.