Beer tax will rise, while small breweries get a 40 percent cut

Beer excise duty will rise by 50 percent, but breweries producing no more than five million litres a year will receive a 40 percent tax reduction, KVF reports. The Faroese government plans to introduce the change.

The Finance Ministry says a similar system operates in the EU, where microbreweries can receive tax reductions of up to 50 percent.

For beer with an alcohol content of 2.8 to 4.6 percent, duty will rise from 7.60 to 11.40 kroner per litre of pure alcohol. For beer between 4.6 and 5.8 percent, it will increase from 10 to 15 kroner. For beer at 5.8 percent or stronger, the rate will rise from 180 to 270 kroner per litre of pure alcohol.

A 33-centilitre can of beer at Rúsdrekkasølan, the alcohol retailer, is expected to cost 2 to 2.50 kroner more. The price of a comparable beer from a smaller brewery is likely to fall by 20 to 30 øre per can.

The Finance Ministry estimates the changes will bring in two million kroner for the public treasury. The law is due to take effect on January 1.