Poles and Czechs rushed to stock up on alcohol in the closing days of last year ahead of a tax rise in both countries, boosting London-listed Stock Spirits.
The company revealed that it saw a run on its vodka in Poland ahead of a 10% increase in spirits excise duty. Meanwhile, the government in the Czech Republic put up taxes by 13.2%. Both laws came into effect on January 1.
As a result, customers flocked to Stock Spirits, which mainly sells in the two countries and Italy – it has captured between a quarter and a third of the market in Poland and the Czech Republic.
We expect the current quarter will see some consequential impact from the strong first quarterStock Spirits
The company said in a statement to shareholders: “As expected, our businesses in both markets experienced exceptionally strong demand from our customers as they built up inventory in the run-up to these changes being implemented.”
It said Polish vodka sales rose 4.8% in value and 2.3% in volume in the three months to December 31.
In the Czech Republic, the market grew by 6.4% in value and 4.9% in volume.
But Stock Spirits warned that increased sales in the first quarter were likely to have a sting in the tail.
“Based on previous experience of such changes, we expect the current quarter will see some consequential impact from the strong first quarter,” it said.
Meanwhile, more taxes might be in store, as the Polish parliament will soon consider an added levy on smaller bottles – under 300 millilitres.
Stock said it is too early to say with any certainty what impact the law might have, or how it could respond.
“We are already considering a range of potential commercial and operational actions that we could take in response to manage or mitigate the situation, including legal action under EU law,” it said.