Voluntary Report - public distribution

**Date:** 7/27/2004

**GAIN Report Number:** PL4025

PL4025

**Poland**

**Product Brief**

**Distilled Spirits**

**2004**

**Approved by:**

![](media/image1.wmf)Wayne Molstad, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Jolanta Figurska, Marketing Specialist

Charlene Kastanek, Agricultural Intern

**Report Highlights:**

Alcoholic beverage consumption in Poland has been steadily rising.
Poland is the world\'s fourth largest consumer of vodka. The market for
distilled spirits was highly protected by tariffs; however, Poland\'s
May 1, 2004 accession to the European Union, tariffs have dramatically
dropped. The United States has a large share in the whiskey and gin
markets which continue to expand.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Warsaw \[PL1\]

\[PL\]

## Introduction

Distilled spirits represent a small percentage of the alcohol consumed
in Poland, due to the recent increases in wine and beer consumption.
Vodka dominates the distilled spirits market, accounting for 9% of total
alcoholic beverage consumption. Whiskey has been growing in popularity
in Poland among the younger crowd and imports from the United States for
whiskey have been growing rapidly. Poland became a member of the
European Union on May 1, 2004, which has reduced the tariff rates on
alcoholic beverage imports significantly increasing market access, which
was once very small.

+-----------------------------------+-----------------------------------+
| # Advantages                      | # Challenges                      |
+-----------------------------------+-----------------------------------+
| The tariff rates imposed on all   | Poland produces a large quantity  |
| alcoholic beverages have          | of distilled spirits domestically |
| decreased dramatically due to     | which are of a high quality.      |
| Poland's May 1, 2004, accession   |                                   |
| to the EU.                        |                                   |
+-----------------------------------+-----------------------------------+
| Poland is the fourth largest      | Consumers are purchasing more     |
| consumer of Vodka.                | beer and wine than ever before.   |
+-----------------------------------+-----------------------------------+
| Whiskey has been traditionally a  | Low salaries make the Polish      |
| drink of choice among Poles.      | alcohol market very price         |
| Recently the younger sector has   | sensitive.                        |
| acquired the taste for Bourbon,   |                                   |
| due to its being seen as a trendy |                                   |
| drink.                            |                                   |
+-----------------------------------+-----------------------------------+

## Market Sector Opportunities and Threats

**[Retail & HRI Market Sector]{.underline}**

*1) Entry Strategy*

Contacting the right importer will help a business enter the Polish
distilled spirits market. Most supermarkets, hypermarkets, specialty
shops, hotels, restaurants, and catering companies buy the majority of
their distilled spirits through wholesalers, set up through larger
importers or work independently, have their own distribution channels,
and marketing contacts. Exporters of U.S. distilled spirits may obtain a
list of current importers by contacting the Office of Agricultural
Affairs of the U.S. Embassy in Warsaw (see Section V).

*2) Market Size, Structure, Trends*

The distilled spirits market is very competitive. A wide range of
spirits can be purchased on the market from all over the world ranging
widely in price.

Alcoholic beverage consumption in Poland is dependent on the amount of
disposable income available. In years when economic growth is
experienced there appears to be an increase in alcoholic beverage
consumption. When growth slows, consumptions tend to slump as indicated
in the following charts.

![](media/image2.wmf) ![](media/image3.wmf)

Source: Central European Distribution Corporation Source: Citibank

(An estimated 20% of Spirit Consumption unmeasured)

Most large importers distribute products through their own wholesale
operations located throughout Poland. Besides utilizing their own
distribution channels, importers also sell their products to independent
wholesale firms, which in turn distribute distilled spirits to
hypermarkets, specialty shops as well as small retail stores located in
larger cities.

## Table 1: Poland's Distilled Spirits Imports

  -------------------- ------------- ----------- ------------- -----------
  Bourbon, 22083011                                            

                       2002                      2003          

  Country              LPA           \$1,000     LPA           \$1,000

  United States        13,483        186         19,970        261

  Netherlands          172           3           0             0

  World Total          13,656        189         19,970        261

                                                               

  Malt Scotch Whiskey,                                         
  22083032                                                     

                       2002                      2003          

  Country              LPA           \$1,000     LPA           \$1,000

  United Kingdom       4,041         105         7,684         232

  Netherlands          1,116         26          865           19

  France               304           3           634           12

  World Total          5,469         135         9,183         263

                                                               

  Blended Scotch                                               
  Whiskey, 22083052                                            
  and 22083058                                                 

                       2002                      2003          

  Country              LPA           \$1,000     LPA           \$1,000

  United Kingdom       3,271,064     3,271       687,146       6,092

  Ireland              12,282        12          3,803         30

  France               9,188         9           2,440         14

  Bulgaria             0             0           77            2

  Netherlands          537           1           10,373        27

  World Total          3,294,683     3,295       703,915       6,165
  -------------------- ------------- ----------- ------------- -----------

  -------------------- ------------- ----------- ------------- -----------
  Rum and Tafia,                                               
  220840                                                       

                       2002                      2003          

  Country              LPA           \$1,000     LPA           \$1,000

  Bahamas              20,006        154         32,181        281

  Jamaica              10,745        56          5,086         37

  Netherlands          164           0.5         22,661        35

  World Total          34,017        228         68,420        420

                                                               

  Gin and Gin Geneva,                                          
  220850                                                       

                       2002                      2003          

  Country              LPA           \$1,000     LPA           \$1,000

  United Kingdom       24407         185         27939         195

  United States        39659         180         192649        153

  France               1373          8           1248          5

  World Total          66481         372         222583        358

                                                               

  Liquors and                                                  
  Cordials, 220870                                             

                       2002                      2003          

  Country              LPA           \$1,000     LPA           \$1,000

  Ireland              11376         311         16208         611

  Italy                26011         421         24430         474

  Netherlands          21733         254         28169         394

  Germany              10373         100         14798         162

  France               9517          101         5622          79

  United Kingdom       1134          20          1320          26

  United States        3393          28          2825          24

  World Total          85891         1262        96707         1813

                                                               

  Vodka, 220860                                                

                       2002                      2003          

  Country              LPA           \$1,000     LPA           \$1,000

  Finland              310694        887         549127        1860

  Sweden               257739        1050        141307        562

  France               0             0           14057         55

  United Kingdom       5483          44          5393          51

  Denmark              3071          26          2865          28

  United States        844           2           1868          7

  World Total          579394        2017        715995        2568
  -------------------- ------------- ----------- ------------- -----------

Source: World Trade Atlas

The whiskey and bourbon market is primarily comprised of products from
Scotland and the United States. Scottish whiskey comprises a slightly
larger portion of the market share due to lower duties in the past as a
well as a long tradition of consumption of Scottish whiskey in

Poland; however, the increased availability of US brands is indicative
of the potential for growth in this market.

In the gin market the US faces fierce competition from the United
Kingdom. Gin from the US is bought more frequently due to the lower
price for an equivalent or higher quality product, however; gin from the
UK is readily available and sold at a higher price.

###### Table II. Polish Per Capita Alcoholic Beverage Consumption

+-----------------+----------+-----+-----+-----+-----+-----+-----+
| > **Product**   | > **Unit | >   | >   | >   | >   | >   | **  |
|                 | > of     |  ** |  ** |  ** |  ** |  ** | 200 |
|                 | > M      | 198 | 199 | 199 | 200 | 200 | 2** |
|                 | easure** | 0** | 0** | 9** | 0** | 1** |     |
+-----------------+----------+-----+-----+-----+-----+-----+-----+
| > Vodkas,       | > Liters | >   | > 3 | >   | >   | >   | 1.7 |
| > liquors and   | > of     | 6.0 | .8\ | 2.1 | 2.0 | 1.7 |     |
| > other         | > 100%   |     | *\* |     |     |     |     |
| > alcoholic     | > pure   |     |     |     |     |     |     |
| > beverages     | >        |     |     |     |     |     |     |
|                 |  alcohol |     |     |     |     |     |     |
+-----------------+----------+-----+-----+-----+-----+-----+-----+
| > Wines and     | > Liters | > 1 | >   | > 1 | > 1 | > 1 | 1   |
| > drinking      |          | 0.1 | 7.4 | 3.6 | 1.9 | 0.5 | 1.2 |
| > honey         |          |     |     |     |     |     |     |
+-----------------+----------+-----+-----+-----+-----+-----+-----+
| > Beer made on  | > Liters | > 3 | > 3 | > 6 | > 6 | > 6 | 7   |
| > the base of   |          | 0.4 | 0.4 | 0.1 | 6.2 | 5.8 | 0.7 |
| > malt\*\*\*    |          |     |     |     |     |     |     |
+-----------------+----------+-----+-----+-----+-----+-----+-----+

Source: Polish Statistical Office

\* Please note that some industry experts are of the opinion that the
official statistics in many cases are different from industry data by as
much as 5%.

\*\* Data are available for local production only.

\*\*\*Since 2000 only product containing above 0.5% of alcohol are
listed in this category.

Polish distilled spirits consumption declined from 1993 when an excise
tax on alcoholic beverages was introduced. Demand moved from
traditionally consumed distilled spirits to other alcohols, mainly beer.
According to industry experts, consumption of hard liquors (high alcohol
content) and wine in 2003 increased by as much as 30-40% per capita.
This is a result of increased purchases of alcohol from legal sources
(traceable data) as well as steadily increasing demand for wine.

Whiskey is becoming a popular drink, especially among young people in
Poland. The most popular brands include: Johnnie Walker (Red and Black
Label) and Ballentines. American brands most often purchased: Jack
Daniel\'s Whiskey (0.4% of sales in Poland), Jim Beam (0.1% of sales in
Poland) and Medley\'s (0.1% of sales in Poland)

## Costs and Prices

On January 23, 2004 the Polish President signed a new law on excise tax.
The general regulations became effective on March 1, 2004. For details
please see section IV.

Distilled spirits are primarily purchased at hypermarkets or specialty
shops for consumption at home. A small portion of distilled spirits are
purchased at hotels, clubs, and restaurants; this number is expected to
rise as the tourism industry grows.

###### Table III. Warsaw Retail Prices (July 2004)

  ----------------------- ------------ ------------ ----------- ------------------
  ** **                   **%          **Volume**   **Price**   **Country of
                          Strength**                            Origin**

  Vodka                   40%          500 mL       30.99       Finland

  Cranberry Vodka         40%          500 mL       44.99       Finland

  Lime Vodka              40%          700 mL       43.99       Finland

  Vodka                   40%          700 mL       65.00       Finland

  Vodka                   40%          700 mL       52.00       Israel

  Vodka                   40%          700 mL       25.99       Poland

  Vodka                   40%          700 mL       39.00       Poland

  Chopin Vodka            40%          700 mL       42.99       Poland

  Bols                    40%          700 mL       45.00       Poland

  Plum Vodka              70%          700 mL       55.99       Poland

  Bols                    40%          700 mL       65.00       Poland

  Premium Vodka           40%          750 mL       39.00       Poland

  Chopin Vodka            40%          750 mL       55.99       Poland

  Absolut Vodka           40%          700 mL       59.90       Sweden

  Blue Vodka              40%          700 mL       65.00       Sweden

  Citrus Vodka            40%          700 mL       69.00       Sweden

  Black Currant Vodka     40%          700 mL       69.00       Sweden

  Absolut Vodka           40%          1000 mL      72.99       Sweden

  Red Vodka               40%          700 mL       45.00       USA

  Black Vodka             40%          700 mL       146.00      USA

                                                                

  Tennessee Whiskey                    750 mL       159.00      USA

  Single Malt Whiskey                  750 mL       279.00      Scotland

  Single Malt Whiskey                  750 mL       259.00      Scotland

  Red Scotch Whiskey                   700 mL       89.00       Scotland

  Scotch Whiskey                       700 mL       99.00       Scotland

  Black Scotch Whiskey                 700 mL       142.00      Scotland

  Blue Scotch Whiskey                  750 mL       1375.00     Scotland

  Gold Scotch Whiskey                  700 mL       495.00      Scotland

  Dimple Scotch Whiskey                750 mL       265.00      Scotland

  Single Malt Whiskey                  750 mL       289.00      Scotland

  Scotch Whiskey                       3000 mL      435.00      Scotland

  Canadian Club Whisky                 750 mL       125.00      Canada

  Wild Turkey Bourbon                  700 mL       169.00      USA

  Kentucky Bourbon                     700 mL       74.50       USA

  Bourbon                              700 mL       625.00      USA

  Black Bourbon                        700 mL       185.00      USA

  Straight Bourbon                     700 mL       139.00      USA

  Bourbon                              750 mL       139.00      USA

  Bourbon                              700 mL       415.00      USA

  Black Jack                           700 mL       67.99       USA

  Jim Beam                             700 mL       131.99      USA

  Bourbon                              700 mL       169.00      USA
  ----------------------- ------------ ------------ ----------- ------------------

  ----------------------- ------------ --------- -------- ------------------
  Gin                     37.5%        700 mL    51.99    USA

  Gin                     38%          700 mL    32.99    USA

  Lime Gin                38%          350 mL    16.99    USA

  Lime Gin                38%          700 mL    32.99    USA

  London Gin              40%          700 mL    47.80    England

  Dry Gin                 40%          700 mL    95.00    England

  * *                                                     

  Carolan\'s Irish Cream  17%          500 mL    33.99    USA

  Scottish Irish Cream    17%          700 mL    85.99    Scotland

  Bailey\'s Irish Cream   17%          700 mL    90.00    Ireland

                                                          

  Bol\'s Blue Liquor                   700 mL    85.00    Poland

  Amaretto                             500 mL    19.99    Poland

  Blue Curacao                         500 mL    28.99    Poland

  Crème de Menthe                      500 mL    26.99    Poland

  Sheridan's Liqueur      18.5%        500 mL    77.00    United Kingdom

                                                          

  White Rum                            700 mL    86.90    Cuba

  White Rum                            700 mL    94.90    Cuba

  White Rum                            700 mL    67.00    USA

  White Rum                            500 mL    40.00    USA

  Black Rum                            700 mL    69.00    USA

  8 Year Old Rum                       700 mL    119.00   USA

  Captain Morgan                       700 mL    78.00    USA

  Black Rum                            700 mL    125.00   Cuba

  8 Year Old Rum                       700 mL    153.00   Cuba

                                                          

  Brandy                  36%          700 mL    32.99    Poland

  Brandy                  36%          700 mL    74.99    Poland

                                                          

  Kahlua                               750 mL    70.00    USA

  Kahlua                               750 mL    88.00    South Africa
  ----------------------- ------------ --------- -------- ------------------

Source: FAS Warsaw Field Research

## Market Access

The excise tax is calculated based on pure alcohol level content at a
temperature of 20 C in the final product.

The Minister of Finance's new working regulations on excise taxes on
several products as of April 22, 2004, effective May 1, 2004 assesses
the following tax:

HS 2204, 2205, 2206 - Wine and fermented drinks - PLN 136 (USD 37) per
hectoliter

HS 2207.10.00 - Ethyl alcohol for consumption purposes - PLN 4,400 (USD
1,202)

HS 2208 - Vodka, liqueurs, other alcoholic beverages, 2103.90.30;
2106.90.20 alcohol preparations for drink production, based on ethyl
alcohol - PLN 4,400 (USD 1,202)

Other alcoholic beverages with no HS code indication, with an alcohol
content above 1.2% vol. - PLN 4,400 (USD 1,202).

The July 27, 2004 exchange rate is USD 1 = PLN 3.66.

Duty-free/custom bound warehouses can now be operated in Poland by
facilities with a history (previous year) of revenue of PLN 700 million
(USD \$ 180 million). New duty free facilities may be established by
obtaining required permits and providing estimates of planned revenue.
The revenue of new facilities must be reported to customs authorities
after 3 months of operation. If it does not meet the initially forecast
level, the permits issued to such facilities are invalidated.

Importers of alcoholic beverages must purchase (\"partial advance
payment\") excise tax stickers from Polish authorities. Imported
products must have \"excise tax\" stickers put on before entering Poland
(as was in the past). Excise tax has to be paid in full once the product
enters Poland, minus the sum already paid as \"partial advance payment\"
of excise tax (paid by importers when obtaining the excise tax
stickers).

Regulations on products designated for \"duty free\" sales are still
being worked on -- currently duty free products do not require \"excise
tax stickers\".

###### Table IV: Distilled Spirits Tariffs

  ---------------- ------------------------------ -----------------------
  **HS Code**      **Product**                    **Rate**

  2208 30          Whiskies:                       

  2208 30 11 2208  -Bourbon Whiskey               0%
  30 19                                           

                                                   

                   -Scotch Whiskey                 

  2208 30 32 2208  \--Malt Whiskey                0%
  30 38                                           

                                                   

  2208 30 52 2208  \--Blended Whiskey             0%
  30 58                                           

                                                   

                                                   

  2208 40          Rum and tafia:                  

                   In containers holding 2 liters  
                   or less:                       

                                                   

  2208 40 11       Rum with a content of volatile 0.6 EU/ %vol/hl + 3.2
                   substances other than ethyl    EU/hl
                   and methyl alcohol equal to or 
                   exceeding 225 grams per        
                   hectoliter of pure alcohol     
                   (with a 10% tolerance.         

                                                  

                                                   

                                                   

                                                   

                                                   

                                                   

                   \--Other:                       

  2208 40 31       Of a value exceeding EU 7.9    0%
                   per liter of pure alcohol.     

                                                   

                                                   
  ---------------- ------------------------------ -----------------------

+---------------+-----------------------------+-----------------------+
| 2208 40 39    | Other                       | 0.6 EU/ %vol/hl + 3.2 |
|               |                             | EU/hl                 |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
|               | In containers holding 2     |                       |
|               | liters or more:             |                       |
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
| 2208 40 51    | Rum with a content of       | 0.6 EU/ %vol/hl       |
|               | volatile substances other   |                       |
|               | than ethyl and methyl       |                       |
|               | alcohol equal to or         |                       |
|               | exceeding 225 grams per     |                       |
|               | hectoliter of pure alcohol  |                       |
|               | (with a 10 % tolerance)     |                       |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
|               | \--Other:                   |                       |
+---------------+-----------------------------+-----------------------+
| 2208 40 91    | Of a value exceeding EU 2.0 | 0%                    |
|               | per liter of pure alcohol.  |                       |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
|               |                             |                       |
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
| 2208 40 99    | \-\--Other:                 | 0.6 EU/ % vol/hl      |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
| 2208 50       | Gin and Geneva              | 0%                    |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
| 2208 60       | Vodka                       | 0%                    |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
| 2208 70       | Liqueurs and Cordials       | 0%                    |
+---------------+-----------------------------+-----------------------+
|               |                             |                       |
+---------------+-----------------------------+-----------------------+
| 2208 90       | Other                       | 0%                    |
+---------------+-----------------------------+-----------------------+

\*Please note that as Poland became a member of the EU on May 1, 2004,
the EU\'s external custom duty rates are applied. For additional
information on EU duty rates applied to product from other non-EU
suppliers, please refer to the following Internet address:

http://europa.eu.int/comm/taxation_customs/dds/en/tarhome.htm

## Key Contacts and Further Information

For more information concerning market entry and a current importer list
contact:

-Embassy of the United States of America

Office of Agricultural Affairs, Warsaw, Poland

Attention Agricultural Counselor and Marketing Specialist

e-mail: agwarsaw@usda.gov or agwarsaw@poczta.onet.pl

tel: 48 22 504 2336, fax: 48 22 504 2320

-United States Department of Agriculture, Foreign Agricultural Service,
AGX Division

Marketing: Nancy Hubbell, e-mail: Nancy.Hubbell@fas.usda.gov tel:
202‑720‑9487

Analysis: Dorsey Luchok, e-mail: Dorsey.Luchok@fas.usda.gov tel:
202-720-3083

FAS TTY Number: 202-690-4879

Additional information on the Polish market (e.g. Retail Sector) can be
found on the Internet at (www.fas.usda.gov) at the *Attaché Reports*
link.