Excise flavoured coffee

Lucky in love, money, a stranger crossing your path. This is what most of you have seen in coffee grounds. But have you ever guessed how much coffee do you actually drink for the price you pay for one cup? Did you know that only 30% of the price per cup actually accounts for coffee and the rest is made up of taxes and excises? You may not have felt their taste so far, but the local coffee producers and importers have.
Practically a tonne of robusta purchased from the international exchanges costs more than 1,700 euros, because in addition to the 450-500 euro market price, a producer also pays variable excises calculated according to the coffee type: some 800-5,000 euro/tonne for green coffee, 1,250 euro/tonne for roasted ground coffee and 5,000 euro/tonne for instant coffee. Romania is the only country where excises vary according to the coffee type, not to mention that excises on coffee are yet unheard of in the neighbouring countries such as Hungary, the Czech Republic, Lithuania and Latvia.
Subsequently, sales are going down. The packaged (branded) coffee market registered its sharpest decline in several years in 2002, plunging by 20%. Eli Rachmut, general manager of Elite Romania, which accounts for about 50% of the Romanian coffee market, says last year’s decline impacted on the company’s business, as well, in spite of the very large advertising investments.
“This was generally a difficult year, especially in the first three quarters. The market did bound back a little by the end of the year,” Rachmut said. Elite was among the top ten advertisers last year, as well, having invested twice as much the 2001 figures. It invested $40.4 million (rate card calculation), Alfacont Media Watch data show, compared with the $17.5 million in 2001, which turned it into the biggest advertising spender among coffee producers.