“I find the step to drop the excise duty for coffee products beneficial,” says Marius Melesteu, Strauss general manager for Central and Southern Europe. Strauss holds the Doncafe brand in Romania.
Strauss has a coffee packaging plant in Bucharest and last year bought the Amigo brand from Brazil’s Cia Iguacu. Strauss Romania ended 2013 with 213 million lei (EUR48 million) revenue in 2013.
On the other hand, Cristian Scarlat, general manager of Cafea Fortuna, a company with about EUR30 million revenue, says the coffee excise duty accounts for about 2% or 3% of the final coffee price and it is hard to believe this decline will show in the final price.
“It’s hard to believe this will reach the consumer directly. It will probably be lost along the process of distribution to consumers. However, since coffee is very volatile a product price-wise, this decline will potentially offset a rise in price.”
Cafea Fortuna is held by businessman Constantin Moroianu and is the largest entrepreneurial business on local coffee market. It has a production facility in Dragomiresti, Ilfov County (near Bucharest).
Coffee is subject to excise duties, as cigarettes and spirits are. The excise duty stands at EUR153/ton for green coffee, EUR225/ton for packaged coffee and EUR900 per ton of soluble coffee.
The government has recently announced a number of fiscal relation steps, including VAT, social security and flat tax cuts, as well as the plan to drop coffee, jewelry, fur coat and car excise duty.
Marius Melesteu once explained Romanians drink less coffee than the average in other European countries because of the cultural differences, consumption habits and coffee excise duty.
The Romanian Coffee Association, whose chairman Marius Melesteu is, comprises Mondelez Romania (Jacobs), Nestle Romania (Nescafe) and Strauss Romania. (EUR1=RON4.4498)
(English version by Loredana Fratila-Cristescu)