Polish drinks industry challenges planned 23% VAT on some alcohol-free products

Preferential VAT treatment set to end

Poland's Council of Ministers adopted a draft amendment to the value-added tax law on September 22 that would remove preferential VAT treatment for alcohol-free equivalents of alcoholic beverages and for energy drinks. The proposed rules are due to take effect on January 1, 2027, although the legislation still requires the approval of President Karol Nawrocki.

Under the current system, alcohol-free drinks containing at least 20% fruit, vegetable or mixed fruit-and-vegetable juice are subject to a 5% VAT rate in retail. The category includes beers with no more than 0.5% alcohol, drinks based on alcohol-free beer, alcohol-free wines, ciders and mixed drinks, as well as beverages containing caffeine or taurine. The same products are taxed at 8% when served in restaurants and other food-service establishments.

The proposed amendment would impose a uniform 23% rate in both shops and food-service outlets. The change would therefore raise the applicable rate by 18 percentage points in retail and by 15 percentage points in hospitality, creating direct pressure on shelf and menu prices if producers and sellers pass the additional tax on to consumers.

Government cites public-health concerns

Poland's National Revenue Administration argues that, from a public-health perspective, there is no justification for retaining a preferential VAT rate for these products. The National Health Fund has taken a similar position, saying alcohol-free beer is not simply a thirst-quenching drink because it is immediately associated with alcohol and may reinforce certain consumption habits.

According to the fund, the same reasoning applies to alcohol-free wine, cider and other alternatives to alcoholic beverages. The government's approach places these products closer to the alcoholic categories they imitate than to ordinary soft drinks, even when their alcohol content does not exceed 0.5%.

Producers warn of legal and commercial effects

Industry representatives dispute that assessment. Bartłomiej Morzycki, director general of the Union of Brewing Industry Employers — Polish Breweries, said the proposed provisions conflict with the principles of neutrality and proportionality established in the EU VAT Directive. He said the rules would be challenged before the Court of Justice of the European Union if adopted.

Krzysztof Apostolidis, president of Partner Center, said the measure would financially penalize consumers for making responsible, health-oriented choices. Magdalena Zielińska, president of the Polish Wine Council employers' association, argued that the policy would make both alcohol and the alternatives capable of drawing consumers away from it more expensive. Alcoholic drinks also face an excise-duty increase of 20–26%, depending on the category, from January 1, 2027.

Tax increase targets a growing segment

The dispute comes as Poland's broader alcohol market is contracting. NielsenIQ data cited by Wprost show that alcohol sales are down 2.3% by value and 2.5% by volume. Alcohol-free variants are resisting that trend, and industry representatives regard the growth of the 0% category as a lasting change in consumer preferences. A shift to 23% VAT could test that assessment by widening prices precisely as producers, retailers and hospitality operators invest in alcohol-free ranges.