Poland, brief agricultural news week 35, 2020

Sugar fee and fee on sale of alcoholic beverages to be introduced in Poland in 2021

To fight the obesity wave observed in Poland, the act amending certain acts in connection with the promotion of pro-health consumer choices, imposing, inter alia, the fee on sweetened beverages and a fee related to the sale of alcoholic beverages with a volume not exceeding 300 ml was signed by President Andrzej Duda.

Pursuant to this legislation, entrepreneurs selling alcoholic beverages intended for consumption outside the place of sale on the basis of a permit are required to pay a fee related to the sale of alcoholic beverages with a volume not exceeding 300 ml. It is supposed to be PLN 25 (6 EUR) per liter of 100% alcohol sold in packages up to 300 ml. For example, it means PLN 1 (0,25 EUR) for 100 ml bottle of 40% vodka, PLN 2 (0,50 EUR) for a 200 ml bottle of 40% vodka and PLN 0,88 (0,20 EUR) for a 250 ml bottle of 14% wine.

The act also provides for the introduction of a fee on sweetened beverages, divided into a fixed and a variable part. The fixed fee is PLN 0,50 (0,15 EUR) per liter of drink with added sugar or sweeteners, PLN 0,10 (0,03 EUR) per liter of drink with the addition of an active substance (caffeine or taurine), the variable fee is PLN 0,05 (0,01 EUR) for each gram of sugar over 5 grams/100 ml - converted into liter of drink.

Most of the provisions enter into force on 1 January 2021.

The planned date of entry into force of the act was 1 July 2020, however it was postponed due to COVID-19 epidemics. It was supported by Adam Niedzielski, at that time the president of National Health Fund (NFZ) and the current Minister of Health, who explained that changing the lifestyle, consciously shaping consumption-related health choices, a balanced diet and physical activity - these are ways to reduce the obesity, especially among young Poles. An additional impulse for a permanent change in eating habits, as in other countries, may be the pro-health fee. The introduction of legal regulations covering the entire population, aimed at limiting the availability of products with excessive sugar content, is primarily health-promoting. The proceeds from this fee will be allocated mainly to treatment, but above all, they will affect the consumer behavior of Poles, which has a significant impact on Poles’ health.

At the same time the industry indicated the negative economic effects for the Polish economy, caused by the new legislation due to the high amount and complicated method of calculating the sugar fee, definition problems, risk of creating grey area and new complex obligations instead of using existing mechanisms. Additionally, the juice producers’ organization pointed out that the law would change the structure of Polish fruit growing and the juice industry, with less demand for fruit drinks. In their opinion the provisions strike at sugar beet farmers and fruit growers supplying their raw materials mainly for the processing and production of fruit drinks.

Since 1 January 2021, the sugar fee and the financial sanction for failure to pay it on time will constitute the NFZ's income (96.5%) and the state budget income (3.5%). In turn, the revenues from the fee for alcoholic beverages in small packages and financial penalties for failure to pay it on time will constitute income of municipalities where alcoholic beverages are sold (50%), and of the National Health Fund (50%).

More info on previously planned introduction of the levy: https://www.agroberichtenbuitenland.nl/landeninformatie/polen/nieuws/2020/02/03/poolse-producenten-protesteren-tegen-nieuwe-suikerbelasting

Source: farmer.pl, portal.spozywczy.pl

Lower tax rate for reproductive material

Almost two months after the change in tax regulations, the Minister of Finance decided to restore the lower, 8% VAT rates for semen of farm animals.

As of 1 July 2020, due to the entry into force of the new VAT matrix, the tax rate for semen of farm animals has changed, increasing from 8% to 23%. This sparked a wave of protests in the agricultural community. The intervention of agricultural organizations in defense of the interests of breeders and breeding companies brought the expected result. The Minister of Finance, after analyzing the arguments and assessing the potential negative impact on the agricultural sector, decided to restore the previous 8% VAT rates on animal semen.

The agricultural self-government emphasizes that this decision will contribute to restoring the balance on the animal breeding and reproductive material market.

Source: farmer.pl

Poland: Food prices in July

Prices of consumer goods and services in July 2020 fell by 0.2% compared to the previous month, after an increase by 0.6% in June. Goods were cheaper (by 0.5%), with an increase in the prices of services (by 0.6%). The total consumer price index was lowered mainly by the decline in food prices - by 0.37%.

A drop in food prices was observed - by 1.6%, with a slight increase in the prices of non-alcoholic beverages - by 0.3%. Cheaper than last month were, among others vegetables - by 8.7%. Fruit was also paid less (on average by 2.5%), sugar (by 1.1%) and rice (by 0.3%), after increases in the previous months. The prices of oils and fats decreased on average by 0.7% (of which butter was cheaper by 0.7%). Meat also became cheaper - on average by 0.4% (including pork by 2.5%, meat products by 0.6% and beef - by 0.2%, while poultry was more expensive - by 2.9%). Consumers also paid less than in June for products from the "milk, cheese and eggs" group - on average by 0.3% (including cheaper eggs - by 0.8%, yoghurts - by 0.5% and cheese and cottage cheese - by 0.3%; the prices of milk and cream increased - 0.2% each). The prices of pasta and pasta products decreased by 0.2%. More expensive than in June there were flour (by 1.3%), fish and seafood (0.5%), groats and cereal grains (by 0.4%) and bread (0.3%).

On an annual basis, prices of consumer goods and services in July 2020 increased by 3.0% (compared to an increase in June this year by 3.3% and in July last year by 2.9%). The prices of goods increased by 1.5%, and services by 7.3%.

In July, the annual increase in food prices was the slowest since April last year (amounting to 4.1%). The price of non-alcoholic beverages increased by 2.0%, i.e. to a similar extent as in June this year. Consumers still paid significantly more than a year ago, e.g. for fruit - on average by 24.1% (including apples - over 2.5 times more). The prices of bread (9.0%) and groats and cereal grains (6.9%) continued to rise significantly. Flour was also more expensive (7.0%), with growth rate higher than a month ago. Slower than in June 2020 was, however, the growth rate of, among others prices of rice (6.4%), sugar (6.0%) and average prices of meat (5.4%; among the products of this group, the prices of sausages increased - by 8.9%, pork - by 3.4%, beef - by 1.9%, and poultry meat became cheaper - by 1.7%). The prices of fish and seafood (by 4.3%), as well as pasta and pasta products (by 4.0%) also increased, as well as the average prices in the "milk, cheese and eggs" group (by 3.5%, and among in this group, the price of milk increased by 8.0%, cream - by 4.4%, yoghurts - by 2.9%, cheese and cottage cheese - by 2.6% and eggs - by 0.6%). On the other hand, consumers paid less for vegetables (by 8.0%) as well as oils and fats (by 0.4% on average, with butter prices lower by 3.1% than in the previous year).

Source: Central Statistical Office