In the food and beverage industry, Finland’s Fazer Group has expressed concerns over a government proposal to raise VAT on confectionery products. The company, known for its chocolate brands like Karl Fazer, Fazer Blue, Dumle, and Geisha, warned that such a move could lead consumers to switch to competitor brands.
As part of a fiscal plan for 2025-2028, the Finnish government has proposed increasing the VAT rate on confectionery from the current 14% to 25.5%, aligning it with the general VAT rate of 25.5%. This decision is part of a series of budget measures aimed at improving public finances and addressing the country’s indebtedness.
Fazer, which also operates in bakery and plant-based food and beverage sectors, criticizes the VAT increase on sweets and chocolate as a “great concern.” The company believes that the proposal unfairly targets confectionery products, potentially steering consumers towards foreign products and other categories.
Fazer’s President and CEO, Christoph Vitzthum, expressed surprise at the government’s proposal, citing concerns about the regulatory environment and unequal treatment of different sectors. The company emphasizes the need for predictable legislation and transparency in decision-making processes.
The proposed VAT hike on confectionery products diverges from EU standards, according to Fazer. The company believes that the differential tax treatment could violate EU laws and distort competition in the indulgence products market.
Looking ahead, Fazer is evaluating the potential impact of the government’s proposal on its business and investment decisions. The company’s previous plans to consolidate its confectionery operations were scaled down last year due to economic volatility and changing consumer behavior.
Despite the challenges posed by the VAT increase, Fazer remains committed to delivering quality products and maintaining a competitive edge in the food and beverage market. As the industry landscape evolves, the company will continue to adapt and explore strategic opportunities for growth and innovation.
