Colombia’s proposed tax overhaul could double craft beer prices

Colombia’s liquor and craft beer industry warned on Friday, November 6, that the government’s proposed tax reform could sharply raise retail prices, cut sales and put added pressure on small brewers that make higher-alcohol and more specialized beers.

Industry executives said the proposal from President De la Espriella’s government would increase the value-added tax on alcoholic beverages to 19% from 5% and also raise other levies, including the specific tax on liquor and the ad valorem rate. They argued that the combined effect would hit craft beer especially hard because many small producers rely on imported ingredients and make styles with higher alcohol content, which would leave them with less room to absorb higher taxes.

Diego Angelillis, manager of Industria Licorera de Caldas, said the proposed taxes would be “absolutely ruinous” for the sector. He said his company expects sales could fall by 40% if the measure is approved in its current form. Angelillis said the specific tax linked to alcohol content would rise to 750 Colombian pesos from 360 pesos per degree of alcohol, while the ad valorem component would increase to 35% from 25%.

Caracol Radio reported that, under the proposed structure, a standard beer now priced at 3,000 pesos could rise to 5,000 pesos. A craft beer priced at 8,000 pesos could climb to 17,000 pesos. Other products would also become more expensive, according to figures cited by the station: a 750-milliliter bottle of aguardiente could go to 60,250 pesos from 43,000 pesos, a bottle of Amarillo de Manzanares to 78,000 pesos from 53,000 pesos, a bottle of whisky to 168,600 pesos from 131,400 pesos and a bottle of rum to 80,150 pesos from 58,000 pesos.

Juan Martín González, president of distributor Dislicores, said the government should reconsider the design of the tax. He said Colombia needs revenue, but argued that the structure of the consumption tax and the ad valorem component should be the same for all producers and products, without exceptions that could widen the gap between beer and other alcoholic drinks, especially wines and spirits.

For craft brewers, the concern goes beyond higher shelf prices. Alejandro Manotas, founder of Menchas Beer, said the proposal would be a hard blow for beer producers and especially for craft operations that have spent years trying to expand Colombian consumers’ taste for a broader range of styles. He said those brewers often use more complex raw materials, many of them imported, and produce beers with alcohol levels above those of mass-market lagers.

Manotas said a craft beer that he now sells into distribution for about 7,000 pesos would rise to nearly 15,000 pesos under the proposal. That increase, he said, would make it even harder for independent brewers to compete with large industrial beer makers that produce at much larger scale and focus on lower-cost products. He warned that some brewers might respond by shifting toward cheaper, lower-alcohol beers in order to survive, reducing the variety now available in the market.

That possibility matters beyond individual breweries. If the reform is enacted without major changes, it could reshape competition across Colombia’s beverage industry by widening the price gap between large brewers and small producers, narrowing the commercial space for premium and craft labels, and putting pressure on margins for beer, spirits and other alcohol sellers. It could also affect the range of products offered to consumers if smaller producers pull back from styles that become too expensive to make and sell.

The debate comes as Colombia considers a broader fiscal package aimed at raising revenue. According to Caracol Radio, the reform has triggered concern across the alcoholic beverage business because bottles already face two taxes, and the proposed changes would add to that burden. The measure remains a proposal and still faces the legislative process before becoming law.

The industry’s objections reflect a wider dispute over how the state should tax alcohol without pushing consumers toward cheaper products, weakening smaller producers or reducing formal sales volumes. Supporters of higher taxes generally argue they can strengthen public finances and, in some cases, discourage alcohol consumption. But the companies speaking on Friday said the current draft would do more than that, changing the economics of production and distribution across the market.

For Colombia’s craft brewing segment, which has tried to differentiate itself with imported ingredients, European-inspired recipes and stronger styles, the stakes appear particularly high. Producers say the reform would not only raise final prices but also make certain products less viable, especially those that already operate with thinner margins and lower volumes than the biggest beer brands.