Liquor importers and sellers cry foul over new round of taxes; plan opposition strategy

The prospect of new taxes on alcohol has importers and liquor store owners up in arms.

Liquor stores will bear the brunt on new taxes.

“Enough is enough,” says Cuenca store owner Pablo Ramos. “Our prices are already two or three times what customers pay in Peru and Colombia. Our sales are falling and we’re having to lay off our employees because everyone is buying liquor on the illegal market. The only thing more taxes will do is help the bootleggers.”

The new round of taxes, announced last week by President Rafael Correa, will also target cigarettes and sugared soft drinks. A plan to increase taxes on utilities was dropped by the president.

“We are forced to do this by the fall in oil prices,” Correa said. “It is the right thing to do because sugary drinks, cigarettes and alcohol are bad for the country’s health, so we are also sending a message.”

The National Association of Manufacturers of Food and Beverages plans to meet today in Quito to plan opposition to the new taxes. Association president Cristian Wahli said his members are shocked by the new round of taxes. “This industry has seen prices on its products go up and up during the Correa presidency. How much more can he expect us to take?”

Wahli added: “He seems to forget that this affects jobs and will increase unemployment. We will be meeting with the government and asking for some cooperation to reduce the impact on our workers.”

Like Ramos, Wahli said higher prices on imported liquor will mostly benefit bootleggers. “There are more sales of liquor on the illegal market than on the legal market,” he says. “Why does the government punish those who work legally and reward criminals?”

An organization representing importers is also complaining about the new taxes and says it hopes to meet with government officials this week.

The government has not announced the amounts for new taxes.