Report by the Association of Employers Polish Spirits Industry (ZP PPS) REPORT in FOCUS: STRASZYN

Report By The Association Of Employers Polish Spirits Industry (ZP PPS) REPORT IN FOCUS: STRASZYN

Bacardi-Martini Polska Sp. z o.o. A global company importing vermouths, STAWIGUDA rum, tequila, grape wines and RTDs, which has been managed by the Bacardi family for Komers International Franciszek Mądry Mazurskie Miody Bogdan Piasecki seven generations. A family-owned company manufacturing A family-owned company manufacturing spirits, vodkas and liqueurs, which has and exporting traditional meads, honey been operating on the market since 1990. liqueurs, spirits and vodkas.

Brown-Forman Polska Sp. z o.o. A U.S. company importing whisky, pure TORUŃ CEDC International Sp. z o.o. BIAŁYSTOK and flavoured vodkas, tequila and RTDs. A manufacturer of vodkas and flavoured alcoholic beverages. A distributor of wines, vermouths, liqueurs, Henkell&Co. Vinpol Polska Sp. z o.o. whisky and cognacs. OBORNIKI A manufacturer of wines, Nalewki Staropolskie Diageo Polska Sp. z o.o. WIELKOPOLSKIE sparkling wines, liqueurs, vodkas, gin, Karol Majewski i Wspólnicy Sp. z o.o. An importer of Scotch whisky, vodkas, RTDs, sherry and brandy. A family-owned company manufacturing Old liqueurs, brandy and gin. POZNAŃ Polish tinctures based on traditional recipes. ŁOMIANKI WARSZAWA Podlaska Wytwórnia Wódek SIEDLCE POLMOS S.A. Wyborowa S.A. Pernod Ricard Since 1986, the company has been ŻYRARDÓW JÓZEFÓW A manufacturer of vodkas and flavoured a manufacturer and a major exporter alcoholic beverages. A distributor of whisky, POLMOS Żyrardów Sp. z o.o. WARKA of pure vodkas, quality vodkas, liqueurs brandy, tequila, gin, rum and cognacs. KALISZ A manufacturer and exporter of premium and crèmes. It refers to the old tradition vodkas. It belongs to the worldwide of manufacturing vodka in small ZIELONA GÓRA Louis Vuitton Moët Hennessy group. distilleries.

Warszawska Wytwórnia Wódek Koneser ALTVATER GESSLER – J.A. Baczewski Przedsiębiorstwo Handlowo-Produkcyjne Jarosław Nowociel A family-owned company which refers to the pre-war Wiesław Wawrzyniak A family-owned company reconnecting with the old Lviv tradition of manufacturing pure and flavoured vodkas. A family-owned trade and manufacturing company Warsaw tradition of manufacturing vodka, engaged engaged in agricultural activity and distillation. A pro- in sales of domestic and imported spirits. ducer of vodkas, whisky, tinctures, liqueurs and spirit.

LUBLIN WROCŁAW STOCK Polska Sp. z o.o. A manufacturer of vodkas and flavoured Akwawit Polmos S.A. spirits. A distributor of whisky, brandy, A manufacturer of grain and potato vodkas, liqueurs, vermouths and wines. producing both pure and flavoured ones.

STALOWA WOLA

Przedsiębiorstwo Przemysłu Spirytusowego Polmos w Warszawie S.A. A manufacturer and distributor of spirits, as well as pure and flavoured vodkas.

Przedsiębiorstwo Produkcyjno-Usługowo-Handlowe Tłocznia Maurer Krzysztof Maurer A manufacturer of juices, ciders, distillates, including fruit spirits in several different flavours, as well as fruit ŁĄCKO wines. The company carries on the centuries-old tradition of Łącko highlanders.

MEMBERS OF THE ASSOCIATION OF EMPLOYERS POLISH SPIRITS INDUSTRY (ZP PPS) CONTENTS

Barriers and Challenges | 18 ORGANISATION OUR

11 5 ECONOMIC IMPACT ECONOMIC 23

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

1 PRACTICE GOOD COMPANY he European Union Member States have commenced with works aimed at developing a new alcohol strategy. The supporters of the “Nordic approach” Topt for limiting the economic and physical availability of alcohol, whereas Southern European countries emphasise the importance of education and proper upbringing. Hopefully, the Polish government will exercise sound judgement when forcing its health-related demands. It is very important to effectively reduce the scale of irresponsible alcohol consumption not only for the benefit of individual consumers and the entire society, but also for the benefit of alcohol manufacturers. It is necessary to adopt a new, well-balanced European strategy to engage in dialogue with any and all interested parties with the purpose of undertaking more and more effective measures.

In statistical terms, Poland ranks pretty well among other EU countries. Contrary to common belief, we are not the heaviest drinkers and the majority of Polish people have a sense of proportion when consuming alcohol. We are happy to ob- EUR 21.4 serve the constant decline in the number of drunken drivers on the road. Polish women are also much more aware of the consequences of alcohol consumption during pregnancy than they were a decade ago. However, despite these positive signs, there are still many challenges to face regarding the promotion of alcohol billion abstinence among young mothers, minors or drivers. REVENUES FROM EXCISE TAX AND VAT ORGANISATION OUR PAID BY THE EU MANUFACTURERS OF SPIRIT DRINKS Last year was marked in Poland by a dramatic increase in excise duty rate which jumped by 15% and concerned exclusively the spirit drinks which, therefore, have remained the highest taxed category of alcohols. The current rate of excise duty LESZEK WIWAŁA, PRESIDENT OF THE in Poland is higher than in all other neighbouring countries, including wealthy MANAGEMENT BOARD Germany. The decline in profitability, experienced by the manufacturers of spirits OF THE ASSOCIATION in 2014, resulted in a significant reduction in investment, including expenditures OF EMPLOYERS POLISH for the development of foreign trade exchange. Unfortunately, this caused an im- uropean spirits success is based on tradition, know-how and secret recipes and formulae handed SPIRITS INDUSTRY (ZP PPS) mediate decrease in the exports volume. Poles can produce premium class spir- down though the generations. The sector generates about 1 million jobs in production and sales; its based on a long tradition of manufacturing vodkas, tinctures, fruit spirits and Egrowth and jobs that will stay local as these distillers are deeply and firmly rooted in Europe’s many other alcoholic beverages. High quality of Polish products is recognised regions. and appreciated all over the world. Despite the above, our export volume is now by 50% lower than it was 30 years ago. In the absence of a systemic governmen- Last year, drinks produced by the sector contributed €21.4bn to European exchequers in excise and ECONOMIC IMPACT ECONOMIC tal support, improving performance on global markets is a difficult undertaking. VAT – roughly equivalent to the GDP of a country such as Latvia. We don’t object to fair taxation, but we This opportunity has not been not fully exploited yet. warn exchequers of the negative impact of recent tax increases (from 1% to 60%) and we urge Finance Ministries to be moderate in their proposals: excessive taxes act as an incentive for illicit markets to Apart from overly high rates of excise duty, the manufacturers of spirit drinks flourish, an issue that warrants greater political attention and action. have to cope with excessive bureaucracy, complex tax procedures and uneven level playing field regarding the access to channels of communication with Spirit drinks remain one of the EU’s most valuable agri food exports with €10bn exports in 2014, doubled consumers. Over the threshold of 18% alcoholic strength, even the fees related over the last 10 years. The leading export categories are Whisky (> €4bn), followed by Cognac (>€2bn) and Vodka (>€1bn). With declining consumption in the European Union, external trade represents a vital to authorisation for the retail sales and wholesales of alcohol are much higher. driver of growth for European distillers. In that context, an assertive EU trade policy is crucial for the Besides, it is prohibited to advertise and promote alcoholic beverages, except for future of the sector. one category which has been dominant on the market for many years. Simulta- neously, legal manufacturers are forced to compete with non-registered alcohol Despite challenging economic times, the sector remains very active in addressing alcohol-related harm sale from the shadow economy across the entire country. by supporting a range of actions, from information campaigns on responsible drinking, to server training,

anti drink-driving activations, community initiatives, etc. About 140 interventions are currently running IMPACT SOCIAL Despite harsh market conditions, the spirits industry operators undertake initia- across Europe, focussing on risky drinking behaviours and not consumption per se, involving public- tives which are aimed at reducing the scale of irresponsible alcohol consumption. private partners working together in many instances. Social responsibility is the condition for long-term development of the entire PAUL SKEHAN, sector. This is the main conclusion from the report that I have the honour of pre- DIRECTOR GENERAL OF SPIRITSEUROPE senting to you now. It summarizes all social and economic activities undertaken by the spirits industry in Poland over the period 2013-2014.

I wish you an enjoyable read!

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

2 3 PRACTICE GOOD COMPANY 1921 BEGINNINGS OF ORGANISATION REPRESENTING THE INTERESTS OF THE SPIRITS INDUSTRY IN POLAND OUR ORGANISATION OUR OUR OUR ORGANIZATION

The Association of Employers Polish Spirits Industry IMPACT ECONOMIC (ZP PPS) is proud to uphold the tradition of representing the interests of the entire spirits industry which dates back to 1921 when the Chief Organisation of the Spirits Industry (Naczelna Organizacja Przemysłu Spirytusowego) was established. After the Second World War, under conditions of centrally planned economy, there was no room for any self-governing organisation. Only after the division of POLMOS in 1992, the governing bodies of individual businesses decided to reactivate the idea of industry representation. It was when the National Spirits Processing Council (Krajowa Rada Przetwórstwa

Spirytusu; KRPS) was founded. The Association has IMPACT SOCIAL emerged in its modern form with the advancement 18 of privatisation processes in Poland. MEMBERS OF ZP PPS

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

4 5 PRACTICE GOOD COMPANY alcohol drinking since 2008. Our initiatives in this field olish spirits industry has a tremendous potential. We have a beautiful, long tradition of manu- ABOUT THE ZP PPS are discussed in more detail on page 28. facturing highest quality spirit drinks. Polish vodka is the only global product which is recogni- Psed and associated with our country. We are the leading vodka manufacture in the European Union, which makes us the world’s fourth biggest vodka producer. However, in order to achieve suc- The Association of Employers Polish Spirits In- cess at home and abroad, it is vital to ensure close cooperation with social partners and government dustry (ZP PPS) is a voluntary, self-governing Our Structure agencies which would bring changes necessary for the smooth business operations of manufacturers and self-financing trade organisation which and distributors. Our focus is placed mainly on removing excessive administrative burdens, suppor- General Assembly acts as the largest representative of the spirits ting export development, effectively combating shadow economy and aligning legal regulations with industry in Poland. current market conditions. Successful case studies which can be found in Scotland or France could serve us as an example. As the largest representative of the Polish spirits industry, our Association has been engaged in a dialogue with public administration on its behalf for many years. It is also We represent all manufacturers and importers of spir- General Board worth mentioning that small and medium enterprises, which are members of the Association and it-based products in Poland. Our goal is to create condi- usually compete with each other on a daily basis, are provided with numerous cooperation opportuni- tions which support the development of the spirits indus- ties to create better future and establish ethical standards for the entire industry. We are particularly try in Poland and abroad, represent the industry before proud of the social initiatives undertaken by the Association. Social responsibility is the cornerstone Legislation and Excise Social public authorities, cooperate with academic communities of the sustainable development of the entire spirits industry. Tax Committee Responsibility and non-governmental organisations (NGOs), strengthen ANDRZEJ SZUMOWSKI, Committee the centuries-old tradition of manufacturing spirits, and CHAIRMAN OF THE GENERAL BOARD OF THE ZP PPS (SINCE APRIL 2015), promote the responsible consumption of legal alcohol. WYBOROWA S.A. PERNOD RICARD OUR ORGANISATION OUR

Deregulation Department We have been conducting social campaigns and educational programmes aimed at preventing irresponsible Our Members (as of December 31, 2014) Our Mission Our mission is to support sustainable development 1. ALTVATER GESSLER – J.A. Baczewski or the last two years, I had the honour to manage the works of the General Board of the ZP PPS. From of the spirits industry which has a positive effect on 2. Akwawit Polmos S.A. the business perspective, it was exceptionally difficult due to various factors, including the dramatic economy and agriculture. Simultaneously, we strive 3. Bacardi-Martini Polska Sp. z o.o. F15% increase in the excise duty on strong spirits which was adopted by the Polish government in to promote responsible alcohol consumption among 2014. Despite the need to deal with the implications of the state tax policy, we managed to complete several adult Poles in cooperation with our social partners. 4. Brown-Forman Polska Sp. z o.o. successful projects which was possible due to the close cooperation of the entire industry. Within our social responsibility strategy, our Association actively responded to the series of intoxication with illegal alcohol 5. CEDC International Sp. z o.o. from the Czech Republic. We also conducted the “NO to illegal alcohol” campaign aimed at encouraging 6. Diageo Polska Sp. z o.o.

consumers to pay attention to the origin of the alcohol purchased by them. In 2014, we organized a series of Members of the General Board IMPACT ECONOMIC public debates, during which we discussed many burning issues with renowned experts. One of the problems (as of December 31, 2014) 7. Henkell&Co. Vinpol Polska Sp. z o.o. addressed during these debated were the measures necessary to ensure that alcohol is consumed responsi- 8. KOMERS INTERNATIONAL Franciszek Mądry bly, regardless of its type. Our social media fanpage named “Healthy Pregnancy” – which informs on negative • Andrzej Janota, Chairman of the General Board, impact of alcohol consumption on child development – noted a record-breaking number of views which Brown-Forman Polska Sp. z o.o. 9. Mazurskie Miody Bogdan Piasecki amounted to 12,070,624. Social initiatives were the key activities undertaken by the Association. We consis- 10. Nalewki Staropolskie Karol Majewski tently pursued our social responsibility strategy, simultaneously advocating in matters important to business • Guillaume Girard-Reydet, Deputy Chairman of the community. Last year, we organized the first edition of the Spirits Industry Congress which was attended by General Board, Wyborowa S.A. Pernod Ricard i Wspólnicy Sp. z o.o. entrepreneurs, parliamentarians and analysts related to the spirits industry. This event was an opportunity for 11. Podlaska Wytwórnia Wódek POLMOS S.A. the representatives of the spirits industry to highlight the uneven level playing field of spirit drinks manufac- • Maciej Buda, Bacardi Martini Polska Sp. z o.o. turers on the alcohol market. Besides, as part of our Association, we also appointed the Deregulation Team 12. POLMOS Żyrardów Sp. z o.o. • Monzer Elabrashy, CEDC International Sp. z o.o. which drafted 25 proposals aimed at simplifying current legal provisions. The implementation of the proposed 13. Przedsiębiorstwo Handlowo-Produkcyjne solutions would make it easier for the spirits industry companies to operate on the market, without causing Wiesław Wawrzyniak any additional burden for the state budget. All the suggestions were submitted to the Ministry of Finance. We • Krzysztof Michalski, Diageo Polska Sp. z o.o.

are happy to see that half of them was included in the draft amendments to the Excise Duty Act. However, 14. Przedsiębiorstwo Produkcyjno-Handlowo-Usługowe IMPACT SOCIAL • Michał Wysmulski, Stock Polska Sp. z o.o. we are hoping that all of our solutions will be implemented. The above-described measures prove that close Tłocznia Maurer Krzysztof Maurer cooperation between the members of the Association may bring very positive results despite harsh opera- tional conditions of the spirits industry. It also shows that, acting together, we are able to achieve numerous 15. Przedsiębiorstwo Przemysłu Spirytusowego benefits only for companies, but also for the society as a whole. Membership „POLMOS” w Warszawie S.A. The Association of Employers Polish Spirits Indus- 16. STOCK Polska Sp. z o.o. ANDRZEJ JANOTA, try (ZP PPS) unites both international corporations 17. Warszawska Wytwórnia Wódek Koneser CHAIRMAN OF THE GENERAL BOARD OF THE ZP PPS OVER THE PERIOD 2013-2014, and SMEs, as well as family-owned micro busi- Jarosław Nowociel BROWN-FORMAN POLSKA nesses. 18. Wyborowa S.A. Pernod Ricard

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

6 7 PRACTICE GOOD COMPANY ince the commencement of the works aimed at building up the market economy in Poland which took place many years ago, the organisations representing entrepreneurs and employers have ac- Stively participated in this process by preparing Polish entrepreneurs to operate under new market conditions. These organisations also played a significant role in developing international connections for he objective of the Consultation Council for Commerce and Services attached to the Ministry of Polish companies and attracting foreign investments in the country. Prior to the Poland’s accession to the Economy, whose works I have the honour to manage, is to collect opinions and recommendations EU, we had successfully prepared Polish companies to operate on the European market. For many years, Tfrom organisations uniting entrepreneurs. The representatives of business community are best we have been consistently representing companies in their dealings with public administration. aware of possible economic consequences of ill-considered and vague legislative decisions. That is why We promote the rules of fair play in business and strive to maintain the good reputation of Polish entre- the dialogue between private sector and public administration is so crucial. Within the works of the preneurs. In the last 25 years, our economy has undergone a profound transformation. For this reason, we Council, we identify the barriers to the development of specific markets and, subsequently, make a joint currently assign top priority to all measures aimed at increasing the innovation and competitiveness of the attempt to find solutions to problems experienced by entrepreneurs from the trade and services sector. Polish economy. More together – this rule has been followed by the Polish Chamber of Commerce since The Association of Employers Polish Spirits Industry (ZP PPS) is actively involved in our works. In colla- its very beginnings. Through our cooperation with approximately 150 chambers of commerce, companies boration with the spirits industry, we have prepared e.g. proposals for solutions aimed at reducing the and business organisations, we are well placed to have greater impact on the economic reality in Poland alcohol shadow economy in Poland. Our proposals have been presented to the Minister of Economy. and create better conditions for business development. We are happy to have the Association among our The representatives of the ZP PPS, together with other members of the Council, also challenge any legi- members and are thankful for the intense and successful cooperation to date. slative proposals which may have adverse effects on consumers, entrepreneurs and the Polish economy. ANDRZEJ ARENDARSKI, PRESIDENT OF THE POLISH CHAMBER OF COMMERCE PROF. URSZULA KŁOSIEWICZ-GÓRECKA, PRESIDENT OF THE CONSULTATION COUNCIL FOR COMMERCE AND SERVICES, EXPERT AT THE INSTITUTE FOR MARKET, CONSUMPTION AND BUSINESS CYCLES RESEARCH OUR ORGANISATION OUR

The Association of Employers Manufacturers Non-Associated Polish Spirits Industry

(ZP PPS) is a member of the Our Members Institutions EU following organisations: Social organisations: Polish Chamber of Commerce OUR PARTNERS CASE Foundation Advertising Council The key aspect of the Association's operations KRZYŚ Foundation is its collaboration with external environment, Food Economy Council presenting common opinions of the spirits MONAR Consultation Council for Commerce industry at the national and the EU level, pur- Local Communities and Services attached to the Minister of Partnership for Road Safety suing dialogue with public administration and

and Authorities IMPACT ECONOMIC Economy United Nations Global Compact other sectors of the economy. MAP OF STAKEHOLDERS spiritsEUROPE We do our utmost to ensure that relations with our Social Organisations partners are always transparent and focused on reaching compromise. Parliament Experts + Public Media Cooperation Administration Business organisations: he Polish Chamber of Trade is an industry chamber of commerce for retail trade and the largest organisation representing trade in Poland, which unites approximately 30,000 stores, food whole- Polish Chamber of Trade Tsalers, retail chains and companies from the FMCG sector. We have cooperated with the Associa- tion of Employers Polish Spirits Industry (ZP PPS) for several years. We fight together for the interests Polish Organisation of entrepreneurs and solutions facilitating business operations, among others, within the Consultation SOCIAL IMPACT SOCIAL of Trade and Distribution Business Organisations Council for Commerce and Services attached to the Ministry of Economy. Industry organisations, such as Polish Organisation the Polish Chamber of Trade or the ZP PPS, play an incredibly important role by presenting the legislator and decision-makers with the perspective of market practitioners, i.e. entrepreneurs. Our collaboration of Oil Industry and Trade to date has proved that together we can achieve much more. As the ZP PPS is a highly engaged partner, Scotch Whisky Association this year, we have decided to join our forces not only in the area of legal regulations, but also in the field of responsible alcohol sales within the social campaign named “Maturity Checked Here” (“Tu się sprawdza Polish Vodka Association dorosłość”). MACIEJ PTASZYŃSKI, GENERAL DIRECTOR OF THE POLISH CHAMBER OF TRADE

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

8 9 PRACTICE GOOD COMPANY SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND OVER THE PERIOD 2013-2014 100,000 PLN 11 INDIRECT AND DIRECT JOBS BILLION OF BUDGET REVENUES FROM EXCISE DUTIES, VAT AND OTHER TAXES AND PUBLIC LEVIES OUR ORGANISATION OUR ECONOMIC ECONOMIC IMPACT

The spirits industry is firmly rooted in the European IMPACT ECONOMIC economy. It provides million jobs across the entire European Union, supporting the development of many cities and regions. In addition, it fuels the national budgets with EUR 21 million annually for taxes (excise duty and VAT). Our country is an exceptional contributor to the European spirits industry. Poland is the largest manufacturer of vodka in the EU and the fourth one in the world. Strong spirits produced in Poland are well recognized abroad, contributing to the development of exports and the promotion of our country. SOCIAL IMPACT SOCIAL

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

10 11 PRACTICE GOOD COMPANY

IMPACT ON THE ECONOMY MAIN EXPORT DESTINATIONS:

MAIN EXPORT DESTINATIONS:

UE 28 – EUR 90 million UE 28 – EUR 90 million France – EUR 74 million RTS: 49 MILLION France – EUR 74 million EXPO LIT RES N USA – EUR 24 million , EUR 1 ILLIO USA – EUR 24 million 36 M Canada – EUR 4 million Canada – EUR 4 million Hungary – EUR 2.7 million MANUFACTURERS Hungary – EUR 2.7 million MANUFACTURERS UK – EUR 2.6 million Potatoes 96 companies UK – EUR 2.6 million Potatoes 96 companies registered by the Ministry Chile – EUR 2 million 50,000 tonnes of Agriculture and Regional registered by the Ministry Chile – EUR 2 million 50,000 tonnes Development (MRiRW) of Agriculture and Regional Development (MRiRW) Ukraine – EUR 1.5 million 93% Ukraine – EUR 1.5 million of goods and services 93% MARKET of goods and services MARKET

are provided by companies ORGANISATION OUR are provided by companies SUPPLIES based in Poland SUPPLIES based in Poland DISTILLERIES DISTILLERIES 98 distilleries98 distilleries PLN 92% sales in shops sales in shops N PLN 92% L illion 2.27N in n 2 b tota L io . ls l s b l 2 P ria pen i il 7 e t b in 8 at to pur P y co ll b ials total spe b sales in gastronomy m chas m i er nt i 8%

RAW MATERIALS RAW b 2 aw e goo pa8n o at to pur y co ll sales in gastronomy r ds ie mn chas m i 8% . f e p o MATERIALS RAW o 2and raws goo an n 1 ts . f se ds a ies Grains s o rvi nd co 1 ts ce ser Grains os s vic c es 386,000 tonnes 386,000 tonnes VODKA VODKA MANUFACTURING MANUFACTURING 276 milion 276 milion 224 million volume litres of spiritvolume drinks litres of spirit drinks

224 million IMPACT ECONOMIC litres litres

As much as 71% of eachAs much as 71% of each JOBS JOBS 100 PLN spent by a100 consumer PLN spent by a consumer on spirit drinks contributeson spirit drinks contributes to the state budget: to the state budget: PROVIDERS OF GOODSPROVIDERS OF GOODS DIRECT EMPLOYMENTDIRECT EMPLOYMENT - PLN 49 for excise tax- PLN 49 for excise tax AND SERVICES AND SERVICES 4,227 4,227 PUBLIC LEVIES PUBLIC LEVIES - PLN 18.7 for VAT - PLN 18.7 for VAT 29,172 29,172 In total: In total: 2013 20142013 2014 - PLN 3.7 for prevention- PLN measur 3.7es for prevention measures PLN 7.158 billion PLNPLN 6.614 7.158 billion billion PLNfor ex 6.614cise tax billion for excise tax 97,554 97,554 jobs jobs TRADE TRADE IMPACT SOCIAL PLN 3.254 billion PLNPLN 3.384 3.254 billion billion PLNfor VA 3.384T billion for VAT 17,115 17,115 PLN 0.124 billion PLNPLN 0.031 0.124 billion billion PLNfor other 0.031 taxes billion imposed onfor entrepreneurs other taxes imposed (CIT, PIT) on entrepreneurs (CIT, PIT) PLN 0.156 billion PLNPLN 0.164 0.156 billion billion PLNfor employment 0.164 billion costs (taxes, for employment Social Security costs Insurance) (taxes, Social Security Insurance) HORECA HORECA PLN 0.470 billion PLNPLN 0.489 0.470 billion billion PLN for re 0.489tail sale authorisationsbillion for retail sale authorisations PLN 0.022 billion PLNPLN 0.021 0.022 billion billion PLN for wholesale 0.021 authorisationsbillion for wholesale authorisations 47,040 47,040

PLN 11.2 billion PLNPLN 10.7 11.2 billion billion PLN 10.7 billion

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

12 13 PRACTICE GOOD COMPANY olish spirits industry still bears a great potential. The purchase capabilities of Poles are rising, same as consumer requirements and expectations. Add to this the country’s centuries-old tra- Resulting from the disparity in alcohol excise tax rates, Pdition of manufacturing strong spirits which are well-recognised all over the world. The combi- IMPACT ON THE spirit products account for as much as 63% of all reve- nation of the above factors significantly increases our chances for success on the international markets. nues from alcohol excise duties, although they constitute Under positive market conditions in terms of taxes and regulations – regardless of the origin of private only 7% of all consumed alcoholic products. In 2014, capital – the representatives of the spirits industry would invest in the development of production facilities STATE BUDGET and products for the benefit of local communities. For the last 8 years, we have invested approx. PLN 250 revenues from excise duties on spirit drinks were lower million in Lublin. This is where we have built one of the most advanced manufacturing facilities in the In 2014, the production and sales of spirit than expected due to the 15% increase in the excise tax country. Nowadays, in total, the spirits industry creates approx. 97,554 jobs in Poland. 2014 was a very drinks yielded nearly PLN 11 billion revenues rate which entered into force in January 2014. challenging year due to the 15% increase in the excise tax rate on strong spirits, which entered into force to the state budget, which equals the costs of at the beginning of the year. This resulted in lower investments and significant distortions in the supply constructing 270 kilometres of motorways. chain. In 2015, however, the situation should stabilise. We strive to push the spirits market towards inno- The revenues from excise tax, which reached STRUCTURE OF REVENUES FROM ALCOHOL EXCISE vation and premiumisation, although it may be difficult due to the legal restrictions regarding communication with consumers. PLN 6.6 billion, had the largest share in this TAX IN 2014 amount. Compared to all other categories of IAN CROXFORD, alcoholic beverages, the highest excise duty is DEPUTY CHAIRMAN OF THE GENERAL BOARD OF THE ZP PPS, imposed on spirits. GENERAL DIRECTOR AT STOCK POLSKA Spirit drinks 62.69% / PLN 6614 million

STRUCTURE OF REVENUES FROM ALCOHOL EXCISE Wine 3.52% ORGANISATION OUR TAX IN 2013 PLN 371 million IMPACT ON THE INDIRECT EMPLOYMENT Beer 33.80% / PLN 3565 million LABOUR MARKET raw materials production Spirit drinks The companies operating on the spirits mar- 64.87% / PLN 7158 million Wine 3.38% ket and their suppliers create approx. 100,000 PLN 372 million jobs in total. Medium-size enterprises have the largest share in the total employment. Ac- cording to the estimations made by the KPMG, SPIRIT DRINKS CONSTITUTE Beer 31.75% / PLN 3504 million 7% the elimination of the shadow economy would packaging transport OF ALL CONSUMED ALCOHOLIC PRODUCTS IN result in the creation of additional 6,600 jobs in IMPACT ECONOMIC POLAND (IN VOLUME LITRES) AND ACCOUNT FOR the spirits industry. 63% OF REVENUES FROM ALCOHOL EXCISE TAX In 2014, the spirits industry companies provided 4,227 direct jobs. At the same time, indirect employment in the distribution sales entire supply chain of raw materials and services, trade, olish spirits industry has a centuries-old tradition. It always has been an important branch of ex- distribution and gastronomy amounted to 93,327 work- ports and the national economy. Factories and other production facilities located in the entire ter- ers. In total, the entire sector helps to retain 97,554 jobs Pritory of the country, using Polish raw materials, stimulate economic growth and create jobs. Thus, in Poland. they constitute a crucial development factor of nearby local communities. At the same time, the spirits industry plays a vital role in fiscal terms. Through tax revenues, it contributes PLN 11 billion annually to trade and Local Suppliers the state budget. The spirits industry in Poland has already undergone the process of late privatisation gastronomy marketing and PR In 2014, the companies united in the Association spend and consolidation, but it still shows low profitability compared to the entire food sector. The difficulties are mainly due to the restrictive excise duty policy which hits spirit-based products the hardest and the mar- PLN 2.27 billion, in total, on the purchase of goods and IMPACT SOCIAL ket competitiveness in form of a black market. This is one of the reasons for the decline in exports by 50% services. Raw materials constituted the largest item of compared to the 80's. There is a strong need for changes in the regulatory environment and long-term in- expenditure at the level of PLN 1.28 billion. The vast ma- vestments which would develop the sales of products on other promising markets. Because Polish strong jority of suppliers (93%) were Polish enterprises. recycling spirits are perceived worldwide as high quality products, that is premium brands, there is a tremendous Many companies from the spirits industry place stringent potential for success. Compared to other foodstuffs, spirit products have great export opportunities which demands on suppliers in the field of ethics and environ- should not be missed. ment protection, obliging them to observe the rules PROF. ANDRZEJ KOWALSKI, contained in the United Nations Sustainable Development DIRECTOR OF THE INSTITUTE OF AGRICULTURE AND FOOD ECONOMICS Charter or internal corporate policies.

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

14 15 PRACTICE GOOD COMPANY the USA. The important destinations of Polish exports IMPACT ON THE are also Hungary, Germany, Italy, Bulgaria and Canada. olish companies are managing increasingly well in the foreign markets. The EU countries will Besides, Polish spirit drinks are sold also on such distant remain our main economic partners in the near future. However, there is currently a need for markets as Singapore, Hong Kong and Chile. Pmaking further efforts to promote Polish exports on less known markets which are simultane- EXPORTS AND ously more challenging: Africa, Asia and Latin America. Thus, there is a necessity for greater engagement of Polish diplomacy abroad. The effective support of enterprises in the foreign markets requires WHAT GOODS ARE EXPORTED BY THE EU? COUNTRY close coordination between all the involved institutions. Our recent initiatives prove that the quality of Olive Oil 2% inter-ministerial cooperation has improved. Visits to China, Turkey, Israel or Iran, which placed a strong emphasis on the economy, serve as the best example of successful collaboration between the ministries PROMOTION of economy, agriculture, environment and science and higher education, as well as economic self-gov- Pasta 6% ernment organisations. In consequence, in 2014, we organised together more than 5,000 meetings with Polish spirit products have succeeded in the Polish entrepreneurs and 1,200 promotional seminaries, whereas our diplomatic missions provided Polish most competitive and demanding markets, Beer 9% entrepreneurs with more than 47,00 answers to their requests, supporting the completion of nearly 200 such as France and the USA. However, the key transactions, and intervened in almost 360 cases where Polish companies were discriminated. In this current volume of exports is much lower than it Spirit Drinks context, it is worth emphasising that, since August 2014, in cooperation with the ministries of agriculture and economy, we have supported entrepreneurs affected by the Russian embargo. More than 170 initia- was in the 80's. Biscuits, 31% tives promoting the Polish agri-food sector were conducted. Polish spirit products have already succeed- Sweets 10% ed in the challenging and highly competitive markets. Being aware of our achievements to date and the Poland is the largest manufacturer of vodka in the Euro- scale of challenges faced by us in the future active promotion of this industry, I would like to assure you of OUR ORGANISATION OUR pean Union, which makes our country the fourth biggest the support of the Ministry of Foreign Affairs. vodka producer in the world. In this respect, we are just Cheese 12% Wine 29% KATARZYNA KACPERCZYK, behind the leaders: Russia, Ukraine and the USA. Signifi- UNDERSECRETARY OF STATE, MINISTRY OF FOREIGN AFFAIRS cant volumes of exports contribute to the improvement of the country trade balance. For several years, the largest - importers of Polish spirit drinks have been France and Source: Eurostat 2014 -

POLISH STRONG SPIRITS WORLDWIDE Export markets outside the UE: WHICH SPIRITS GENERATE MOST OF THE EU Andorra, Argentina, Armenia, REVENUES? Belarus, Bosnia and Herzegovina,

Whisky – 4,295 IMPACT ECONOMIC Brazil, Chile, Montenegro, Dominican Republic, Ecuador, Georgia, Hong Cognac – 2,347 Kong, Iceland, India, Israel, Japan, Jordan, Cameroon, Qatar, Colombia, Vodka – 993 South Korea, Lebanon, Maldives, Moldova, Nigeria, Norway, New Liqueurs – 967 Zealand, Panama, Paraguay, Peru, Switzerland, Thailand, Turkey, Gin – 315 Ukraine, Uruguay, Vietnam, Venezuela Rum – 135

Key markets Source: Eurostat data in million EUR Canada, USA, Mexico, South Africa, IMPACT SOCIAL EUR 163 Russia, China, Taiwan, Australia, Singapore, United Arab Emirates million VALUE OF EXPORTS OF SPIRIT DRINKS 30 million FROM POLAND IN 2014 EUROPEANS EMPLOYED DUE TO EXPORTS

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

16 17 PRACTICE GOOD COMPANY drinks is the highest compared to other categories of al- BARRIERS AND coholic products. It means that, for example, three times TAX BURDEN ON ALCOHOLIC BEVERAGES higher excise duty is imposed on a 5% gin with tonic than CHALLENGES a 5% beer. Besides, tax discrimination has been recently exacerbated by the excise duty hike which rose by 15% Polish spirits industry strives to ensure its sus- and was imposed exclusively on spirit drinks. The current Vodka 0,5 l, 40%, price PLN 20.00 rate of excise duty on spirit drinks in Poland is higher tainable development which contributes posi- - costs of excise tax per one bottle: PLN 11.41 tively to the economy and the society. However, than in all the other neighbouring countries which are - percentage share of excise tax in price: further legislative and tax changes are needed also the Member States of the European Union. 57% so that producers can increase their investment and develop their business operations. The inequality of treatment is also visible in data on the state budget revenues from the alcohol excise tax. Beer 0,5 l, 5%, price PLN 3.00 The main barriers result from the unsound taxation An average Pole consumes 99 litres of beer, 7 litres of - costs of excise tax per one bottle: PLN 0.49 policy and the excess of administrative procedures which spirit drinks and 5 litres of wine per year (see page 24). - percentage share of excise tax in price: partly create unnecessary obstacles in everyday business Therefore, the category of spirit drinks account for as 16% operations. The provisions contained in the act of 1982 much as 63% of the total state budget revenues from

alcohol excise tax while constituting only 7% of the total ORGANISATION OUR which governs the market are totally out of touch with Cider 0,33 l, 4,5%, price PLN 4.00 consumed alcohol. current social and economic realities. In addition, the - costs of excise tax per one bottle: PLN 0. 32 spirit-based products are subject to a very high excise - percentage share of excise tax in price: duty rate which makes taxes constitute as much as 68% 8% of the final price of the end product. Overly high taxes and excessive regulation of the spirits industry provide an incentive for the development of the alcohol shadow Wine 0,7 l, 12%, price PLN 15.00 economy. - costs of excise tax per one bottle: PLN 11,11 - percentage share of excise tax in price: Tax Discrimination 7% Apart from standard tax liabilities, manufacturers of alcoholic beverages are obliged to pay an additional public levy – alcohol excise duty. The rate of excise duty on spirit IMPACT ECONOMIC

Russia - PLN 8.31

ALCOHOL EXCISE DUTY IN POLAND COMPARED TO ITS NEIGHBOURING COUNTRIES Lithuania - PLN 10.80* * Excise duty rate in PLN per one 0.5 l bottle of 40% alcohol Belarus - PLN 8.25

Poland - PLN11.41* Excise Duty Hike in 2014 IMPACT SOCIAL Germany - PLN 10.89 Since the end of 2013, the spirits industry has experienced significant destabilisation due to the 15% increase in excise Ukraine - PLN 3.62 duty rate which was imposed exclusively on spirit drinks in January 2014. This change has affected mainly the market of Czech Republic pure and flavoured vodkas, significantly reducing the profitability of the entire industry. There was a marked decline in - PLN 8.68 the growth of the whisky market which had been thriving before. The entire category of spirit drinks lost 7.3% of its volu- Slovakia - PLN 9.03 me (data retrieved from the IWSR). The drops in sales were accompanied by significant reduction in production volume. In 2014, the volume of manufactured vodka was by 24% lower than it was in 2013 and by 17% lower than over the period 2008-2013. (data retrieved from Main Statistical Office of Poland - GUS)

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

18 19 PRACTICE GOOD COMPANY regions of the country. Meanwhile, in Poland, one in two Shadow Economy respondents (CBOS) shops online, although six years ago The higher is the excise tax on spirit drinks, the higher is he spirits industry is one of the most over-regulated sectors of the Polish economy. As a producer of regional alcoholic products, I have to deal with unfair, vague and excessive regulations on a daily only one fourth of adults purchased goods or services on supply for them on the black market. This leads to fur- Tbasis. For many years, I have called on politicians of all parties to support small businesses, unfor- the web. Products offered by online supermarkets are ther development of organised crime in this area, which tunately, usually unsuccessfully. The reduction of excessive tax bureaucracy is critical as it is particularly very similar to the products offered by brick-and-mortar generates additional costs for law enforcement authori- burdensome for family-owned micro businesses. Smaller companies have no tax departments within shops, thus, it would be understandable to enhance ties. According to our estimates, the shadow economy their structure. The lawmakers need to understand that it is necessary to simplify regulations for the online offer also with alcoholic beverages. It would be constitutes currently 15% of the legal market of spirit development of small and medium enterprises in Poland. The absence of sound solutions, combined with particularly advantageous for small manufacturers of- drinks. Besides, high taxation discourages new, smaller further increases in the excise duty, will result in the growth of spirits shadow economy, and numerous fering niche, luxury products. Besides, consumers would entities from legalising their production. According to the small, legal companies will withdraw from their operations. In consequence, the situation will become more beneficial for crime offenders than the state budget and legal manufacturers. It is also important have greater convenience in shopping and broader choice studies conducted by KPMG, the liquidation of the alcohol to provide producers with greater possibilities of communicating with customers, same as it the case in of various products. shadow economy would lead to the creation of additional other categories of regional food products. The promotion of alcoholic beverages, from beer to spirits, 6,600 jobs in the spirits industry and related sectors of should be treated equally.. The 1982 Act enshrines a number of inequalities which are economy. It should be noted that, on the alcohol market, KRZYSZTOF MAURER, currently present on the Polish alcohol market, namely: only manufacturers of spirits are faced with competition A MANUFACTURER OF JUICES AND DISTILLATES • it is prohibited to advertise and promote any alco- from the black market. In the case of illegal alcohol, the holic beverages, except for beer, problem lies not only in the losses to the state budget,

• it is prohibited for manufacturers of beverages but it also concerns the health of the citizens. The alcohol ORGANISATION OUR with alcoholic strength exceeding 18% to inform on of unknown origin is often health- and life-endangering. sponsoring of any sports events, concerts and other The manufacturers of spirits also call on to extend the mass events, payment terms of excise duty and introduce a system of • it is prohibited to sell and distribute beverages with monthly settlement of excise tax, by analogy to the VAT alcoholic strength exceeding 18% in holiday guest settlement scheme. The currently binding regulations houses and training centres, are overly complicated. The daily settlement of deposits • authorised points of retail sales of alcoholic beverag- and advances creates the risk of an accounting error and es are regulated according to the alcoholic strength, IN is troublesome both for manufacturers, as well as excise 1982 except for beer, tax control bodies. Many countries rely on a simplified THE LAW WAS PASSES WHICH GOVERNS • various fees are applicable for wholesale and retail system consisting in monthly settlement of excise du- THE ALCOHOL MARKET TO DATE sale of alcohols belonging to specific categories, ties, including Germany where, in addition, the term for

• municipalities have the right to limit the number of IMPACT ECONOMIC payment of such duties is longer. The implementation of points of sale of beverages with alcoholic strength such solutions would improve the competitiveness, par- exceeding 4.5%, except for beer. ticularly with regard to small entities that cannot afford Excessive Bureaucracy professional tax services. The entrepreneurs from the spirits industry are ham- pered by numerous administrative obligations which have Act on Upbringing in Sobriety and Counteracting Alcoholism not been imposed on other alcoholic products. Since he entire spirits industry is currently waiting for the entry into force of the amendments to the The Act on Upbringing in Sobriety and Counteracting Al- 2013, the Association has been calling for a compre- Excise Duty Act, which according to the statements made by the Ministry of Finance should apply in hensive deregulation in the area of customs and excise coholism was passed in 1982, in the middle of the martial Tan amended (“improved”) form from January 1, 2016. The drafted amendments introduce a number duty procedures. In 2014, the works on the amendments law period in Poland. For this reason, it is completely ill- of solutions facilitating business operations for manufacturers and distributors of spirit drinks, e.g. the to the Excise Duty Act were commenced. They should suited to the current market conditions and technological extension of cases of movement of excise goods under a duty suspension arrangement. The above solu- enter into force on January 1, 2016. The spirits industry possibilities. The provisions of this act often raise doubts tion would undoubtedly increase the profitability of production of goods which are subject to the labelling obligation. However, on the other hand, the preliminary drafts of implementing acts to the draft amend- IMPACT SOCIAL has presented the Ministry of Finance with a package of as to their interpretation, which constitutes an additional ments of the Act also introduce a pretty stringent obligation of managing documentation, e.g. through burden for entrepreneurs. solutions facilitating business operations which simulta- determining a new, more advanced registration model which should be applied by entities that manage neously cause no losses to the state budget. The simpli- tax warehouses. Despite the initial positive feedback regarding the drafted provisions, as presented by the fication efforts recommended by the Association mainly One example of the anachronism of this Act could be the Ministry of Finance, this experience shows that only simultaneous simplification of rules and reduction of concern such areas as: labelling and settlement of label absence of any provisions concerning the online sales of the excise tax rate would effectively improve the overall condition of the spirits industry. bands, logistic facilitations, administrative facilitations in alcoholic beverages. The Act does not explicitly prohibit terms of excise tax authorisations, excise tax guarantees the online alcohol trade, however, the established case- KRZYSZTOF WIŃSKI, and excise tax control, as well as solutions facilitating the law of Polish administrative courts is divergent in this SENIOR CONSULTANT, PWC settlement of excise duties. scope. Different provisions are applicable in different

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

20 21 PRACTICE GOOD COMPANY 96% OF PRODUCTS OFFERED IN POLAND BY MEMBERS OF THE ZP PPS HAVE LABELS INDICATING A WEBSITE ADDRESS DEDICATED TO RESPONSIBLE ALCOHOL CONSUMPTION OR INFORMATION ON THE PRINCIPLES OF RESPONSIBLE CONSUMPTION OUR ORGANISATION OUR SOCIAL SOCIAL IMPACT

The spirits industry is involved in the promotion of a IMPACT ECONOMIC culture of responsible alcohol consumption among adult Poles. Since , the Association has conducted educational activities directed at the key risk groups: drivers, pregnant women, alcohol sellers and, in an indirect way, also minors. The ZP PPS also contributes to the development of the self-regulation of the spirits industry. In , the Code of Good Marketing Practices was introduced. Its provisions are often more stringent than binding legal norms. They aim, among others, to protect minors from alcohol promotion. Our social activities are evaluated by external auditors on a regular basis. SOCIAL IMPACT SOCIAL

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

22 23 PRACTICE GOOD COMPANY Polish consumers are very open to all kinds of innova- POLES AND tion. They travel more and more, and keep searching for new flavours. For this reason, various types of alcoholic ALCOHOL beverages in each specific category are offered on the market. IN the category of spirit drinks, the prevailing Contrary to popular belief, we are not the Eu- position of pure vodka is declining and consumers more ropean leaders of alcohol intake. The volume of and more frequently reach for other types of alcohol: low- alcohol consumed in Poland places our country alcohol spirit drinks, whisky, cognacs, brandy, liqueurs, at the EU average. The structure of alcohol con- and rum. sumption in Poland is constantly changing, and it increasingly resembles the Western model. SPIRIT DRINKS PURCHASED BY POLES: It means that we consume more and more various alcoholic beverages and our consumptions habits keep evolving. Gin 0,7% Rum 0,4% Tequila 0,1% Brandy and cognacs 3,4% Thanks to wide range of products offered on the spirits Spirit drinks are most frequently consumed: Over the last ten years, the consumption of alcohol in market, consumers have broad possibilities of finding — at social meetings (84%),

Poland have been at similar levels, reaching 9 litres of ORGANISATION OUR Whisky 10,1% their favourite alcoholic beverages. Spirits are beco- — at family meetings (77%), pure alcohol per one statistical resident. Since 1998, the ming one of the most democratically thriving catego- — to celebrate an important event (34%), dominant component of alcohol consumption in Poland Liqueurs, tinctures ries of alcoholic beverages. Demographic factors such — during holidays or a trip (34%). has been beer. and flavoured spirits as age, place of residence or sex have only a slight Source: KMPG studies for 2014 12,7% impact on the alcohol consumption. STRUCTURE OF ALCOHOL CONSUMPTION IN VOLUME Promotion of Responsible Alcohol LITRES PER ONE STATISTICAL RESIDENT IN 2014 Vodka 72,5% Spirit drinks are consumed several times a year by: Consumption 62% of adult Poles: The majority of Poles consumes alcohol in a responsible 66% men and 58% women manner, with moderation and common sense. However, in each community there is a group of people who abuse The distribution of alcohol consumption in different alcohol or consume it in a socially harmful way. For many 99 l IMPACT ECONOMIC 7 l Beer age groups: years, manufacturers of spirit drinks have undertaken 5 l Source: KPMG, Polish Market of Alcoholic Beverages, 2014 Spirits voluntary obligations aimed at reducing social problems Wine (Retail Sales) 63% of people aged 18-24 directly connected with irresponsible alcohol consumption. We are happy to see a significant improvement in Source: Main Statistical Office of Poland (GUS), Statistical Bulletin, 3/2015 60% of people aged 25-39 many areas, including drink-driving. Simultaneously, we are aware that every day new adult Poles join the group of 62% of people aged 40-54 alcohol consumers. For this reason, as we understand it, n the period of political transformation in Poland, the volume of alcohol consumed in the country rose education must be a continuous and long-term process, to levels not seen for 150 years. However, the registered alcohol consumption has recently stabilised 64% of people aged 55 and more conducted jointly within the coalition of various entities at the level of 9-10 litres of pure ethanol per one resident, which corresponds to the average for the I and experts to bring lasting effects in form of changing Member States of the European Union. This data does not include the non-registered alcohol consumption which, according to various estimates, fluctuates between 1 and 2 litres of ethanol. On the European consumption patterns! continent, we are currently witnessing a process of cultural homogenisation which is reflected also in the SOCIAL IMPACT SOCIAL patterns of alcohol consumption. Poland is increasingly resembling Western countries, both in terms of the alcohol volume consumed per capita, where low-alcohol beverages play even greater part than in the SAFE LIMITS OF ALCOHOL CONSUMPTION past, as well as social circumstances in which alcohol is consumed. However, what separates our country from its Western neighbours is the large share of alcohol which is not included in statistics. The key to improving the health of the entire population is the implementation of a reasonable alcohol-related policy *Safe limits of alcohol consumption – according based on scientific facts and aimed at reducing alcohol consumption mainly through limiting its physical to WHO standards, maximum alcohol intake per and economic availability. week is 10 SJA for women and 15 SJA for men, JACEK MOSKALEWICZ, and no more than 4 SJA per one occasion. PH.D., EXPERT, INSTITUTE OF PSYCHIATRY AND NEUROLOGY 30 ml of vodka 100 ml of wine 250 ml of beer

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

24 25 PRACTICE GOOD COMPANY The strategy of social responsibility which has been SOCIAL adopted by the ZP PPS for years 2013-2016 is focused on the following four areas: RESPONSIBILITY 1) prevention of alcohol consumption by minors 2) prevention of alcohol consumption by pregnant women 3) prevention of illegal alcohol consumption STRATEGY 4) prevention of drink-driving. The spirits industry strives to actively promote responsible and safe alcohol consumption. Social Responsibility Committee The ZP PPS has been conducting educational programmes and social campaigns aimed at Our social responsibility campaigns are conducted under reducing harmful alcohol consumption in the supervision of a special team composed of represen- collaboration with its members since 2013. tatives of our members and the ZP PPS Office. The remit We are aware that changing attitudes takes of this committee is to develop and carry out long-term time. For this reason, our projects always span strategies, annual action plans, as well as social pro- the next few years and we invite social organ- grammes and campaigns. isation and experts in a given field to coopera- ORGANISATION OUR tion.

All the educational projects carried out by the Association • providing consumers with information and responsible are based on a 3-year strategy of social responsibility. Producers Committments Agreement implementation of product innovations, This strategic document sets top priorities and direc- th • combating drink-driving, tions for initiatives undertaken by the industry in order to On the 9 of October, 2012, in Washington, USA, the • providing sellers with support in reducing effects of reduce irresponsible alcohol consumption. An important presidents of leading global alcohol companies (including harmful alcohol consumption. aspect is the development of industry self-regulation, our members: Bacardi-Martini, Brown-Forman, Diageo within which the Code of Good Marketing Practices was 7 YEARS and Pernod Ricard) signed an agreement on cooperation OF EFFECTIVE SOCIAL INITIATIVES IN POLAND The implementation of the above obligations will be sub- by the ZP PPS in 2011. to reduce effects of irresponsible alcohol consumption. The companies undertook to perform 10 target activities ject to an audit conducted by an external company. The

in the coming five years, in five strategic areas, such as: results of the said audit will be made available for public IMPACT ECONOMIC • reducing alcohol consumption by minors, opinion. More information on the Agreement and the level • strengthening and developing codes of marketing of execution of its provisions: http:commitments.global- SOCIAL RESPONSIBILITY STRATEGY OF THE ZP PPS FOR 2013-2016 practices, actions.org

STRATEGIC GOAL: Reducing irresponsible alcohol consumption.

GOAL 1 GOAL 2 GOAL 3 or many years, the spirits industry in Poland have consistently undertaken initiatives aimed at building the culture of responsible alcohol consumption. These actions include both social campaigns GOALS Promoting of responsible Building a coalition for solving Responsible marketing Fconducted by the Association of Employers Polish Spirits Industry (ZP PPS), which are described in alcohol consumption alcohol-related issues of alcoholic products detail in this report, as well as the whole range of initiatives undertaken directly by individual companies which are members of the ZP PPS. The manner of conducting business operations by companies also has great impact on raising the consumers' awareness of responsible alcohol drinking. We support and put into practices the Code of Good Marketing Practices, get involved in educational initiatives and promote Conducting social campaigns Conducting social campaigns and Developing self-regulation IMPACT SOCIAL and educational programmes educational programmes of the spirits industry in the areas responsible behaviours. We strive to pursue dialogue with all the parties connected with the Polish mar- of labelling, POS promotion, ket of alcoholic beverages - retailers, regulatory bodies, institutions concerned with education and public Developing pijodpowiedzialnie.pl Participating in the works of coalition online advertising health protection. Our assumption is that we all care equally for the promotion of responsible behaviours INITIATIVES INITIATIVES website for solving alcohol-related issues in and the removal of any negative effects of harmful alcohol consumption. Also, we follow closely any stati- Poland stics and trends which show that Polish people consume alcohol in a more and more reasonable manner. Promoting responsible sales and At the same time, we hope that our actions contribute at least partly to positive changes in this regard. serving of alcohol Pursuing dialogue with stakeholders (NGOs, governmental agencies, other ANETA JÓŹWICKA, trade organisations) CHAIRPERSON OF THE SOCIAL RESPONSIBILITY COMMITTEE OF ZP PPS, DIAGEO POLSKA

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

26 27 PRACTICE GOOD COMPANY cal Society, is clear – any dose of an alcohol consumed Educational video for medical facilities SOCIAL during pregnancy may result in foetal harm. In 2013 and A 10-minute educational video was recorded on the Campaign Effectiveness 2014, the majority of campaign activities were conducted initiative of the ZP PPS. “I Don’t Drink During Pregnancy Over the past ten years, the number of Polish CAMPAIGNS online, due to the high popularity of this communication – Better Start For Your Child” is broadcast on TV Medica, women who admit to having consumed alcohol channel among pregnant women. a medical TV channel of educational nature available in during pregnancy fell from 33% to 6%. medical facilities. In 2013 and 2014, the film was broadcast AND EDUCATIONAL Partners in 1,000 rooms. Polish Gynaecological Society, Polish Federation of PROGRAMMES Midwives, Enel-med Medical Centre, Specialist Medical Centre Polanica Zdrój, and “SuperMama” Birthing School Problem: alcohol consumption by pregnant women The Polish Gynaecological Healthy Pregnancy on Facebook Society informs: Better Start For Your Child The communication activities directed at young moth- This educational campaign is directed at preg- ers are conducted through a dedicated Facebook profile nant women and people in their environment, – “Healthy Pregnancy” – where women can find informa- as well as medical community. The aim of the tion on how to protect and care for their health and the campaign is to raise awareness of young moth-

health of their child. On a regular basis, four times a Any dose ORGANISATION OUR ers on the adverse effects of alcohol consump- week, posts on the adverse effects of alcohol consumption on the child development. tion during pregnancy are published. They are most pop- of alcohol ular among female users. The fanpage is run in coopera- consumed About the Campaign tion with a midwife who comments on the posts and gives The Association of Employers Polish Spirits Industry (ZP professional advice on a regular basis. Once a week, it is during PPS) has been educating young mothers on the negative possible to chat with the midwife and ask her any burning impact of alcohol consumption during pregnancy since questions. “Healthy Pregnancy” is currently the largest pregnancy may 2008. The message of this campaign, which has been Polish fanpage concerning pregnancy on Facebook. developed in consultation with the Polish Gynaecologi- result in foetal harm. ECONOMIC IMPACT ECONOMIC

Better Start For more information please visit: 50,646 www.lepszystart.com.pl FANS IN JANUARY 2015 For Your Child 93% OF FANS ARE WOMEN AT s it is demonstrated by the community gathered around the “Healthy Pregnancy” fanpage and the REPRODUCTIVE AGE (18-44)

online chats which are hosted by me, young women surf the internet in the search for realistic and IMPACT SOCIAL Asound knowledge on the health and lifestyle during pregnancy. One of the most controversial sub- jects is alcohol consumption by pregnant and breast-feeding women. Women are still confronted with ste- reotypes concerning the impact of alcohol consumption on the child development. These include, among others, the conviction that red wine is the best method for improving blood circulation or that the placenta protects the foetus from harmful effects of alcohol consumed by a pregnant woman. Young mothers keep asking questions and looking for answers, and this is exactly what we provide. 12,070,624 BOGUMIŁA CHMIEL, PROFILE VIEWS MIDWIFE AND EXPERT ON PREGNANCY NURSING OVER THE PERIOD 2013-2014

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

28 29 PRACTICE GOOD COMPANY Problem: underage drinking Programme Goals YOUTH: This programme is directed at the gymna- ositive Knowledge Lab is a professional prevention programme adjusted to the specifics of the Positive Knowledge Lab sium students and aimed at promoting healthy lifestyle developmental age of gymnasium students (aged 13-14). This is a novelty project in Poland based This comprehensive school prevention pro- (including attitudes which are free of alcohol and other Pon scientifically developed prevention strategies and involving not only the youth, but also parents gramme is directed at the youth, parents and psychoactive substances) through shaping patterns of and teachers. The experiences gained during the programme to date show that it is very well received by teachers. It has been developed by social or- satisfactory life and readiness to deal with difficulties all target groups, and its implementation leads to the increase of creativity and acceptance for lifestyle which is free of alcohol and other psychoactive substances. ganisations and higher education institutions. experienced during adolescence. The programme allows Through interactive lessons, young people the youth to take an active part in conscious shaping of JOLANTA ŁAZUGA-KOCZUROWSKA, acquire social skills helping them to maintain attitudes and opinions towards the use of alcohol and PRESIDENT OF THE GENERAL BOARD OF THE MONAR ASSOCIATION abstinence. other psychoactive substances.

About the Programme PARENTS: The aim of the programme module for parents The project named “Positive Knowledge Lab” is a school is to shape such attitudes towards the issue of (poten- Focus Studies programme aimed at preventing high-risk behaviours, tial) use of alcohol and other psychoactive substance by The programme has been prepared on the basis of with particular consideration of alcohol use, directed at children which would encourage abstinence. In particu- focused interviews conducted in December 2012 in three the youth aged 13-14, their parents and teachers. The lar, it concerns the establishment and implementation of target groups: parents with children aged 13-14, teachers

project has been initiated by the ZP PPS in cooperation standards connected with the non-approval for the alco- working with children in this age group and children at- ORGANISATION OUR with numerous institutions and experts who engage in the hol consumption by the youth and reduction of negative tending the first or the second year of gymnasium. Based issues of social education of the youth. At the moment, the impact of alcohol consumption by parents on children. on the study results, a pilot edition of the programme was programme is conducted autonomously by social organi- prepared and carried out in 2013. zations, without the involvement of the ZP PPS. TEACHERS: The programme module for teachers is focused on the creation of a positive social climate of Each edition of the programme was subject to a quan- Partners a school by helping teachers in building supportive titative and qualitative evaluation in all three target The MONAR Association is responsible for the content relationships with students, based on personal approach groups (pupils, teachers and parents). development and the project execution. Other partners towards them. The activities are also aimed at promoting of the programme include: Cardinal Stefan Wyszyński healthy behaviours and abstinence among the youth as a The implementation of the programme's pilot edition, University in Warsaw, Social Education Foundation, Asso- norm. January-June 2013 ciation of Professional Psychotherapy and Psychoeduca- • The first edition of the prevention programme was car-

tion “Wspólna”, as well as the Warsaw Charitable Society. ried out in classes, groups of teachers and groups of IMPACT ECONOMIC parents in Warsaw and in the surrounding settlements. • The evaluation studies were conducted by the Cardinal Wyszyński University in Warsaw. Based on the conclu- sions drawn from the pilot edition of the programme, its final version has been developed. SO FAR IN THE PROGRAMME 859 468 144 1471 The implementation of the programme's second edition, TOOK PART: STUDENTS PARENTS TEACHERS PARTICIPANTS January-June 2014 • In January 2014, the second edition of the programme was carried out. It covered three voivodeships in Poland: Masovian Voivodeship, Greater Poland Voivode- “HOME PARTY”

ship and Pomeranian Voivodeship. The activities took One of the communication tools applied in the pro- IMPACT SOCIAL place in classes, groups of teachers and groups of gramme is a film entitled “Home Party” which has parents. been prepared jointly by the ZP PPS and the Capital • The evaluation studies were conducted by the Institute Police Headquarters, in consultation with the MONAR of Sociology of the University of Warsaw. Association and the programme partners. The scena- • The programme fulfilled the expectations of 74% of rio of the film was approved by the Centre for Educa- teachers, 70% of parents and 66% of pupils. tion Development (ORE) in Warsaw.

Learn more at www.pozytywnelaboratorium.pl

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

30 31 PRACTICE GOOD COMPANY Problem: consumption of alcohol of unknown origin Partners the risk of intoxication, the risk of death and the risk The campaign was conducted in cooperation with the of blindness, SIBA – how to check whether the alcohol con- NO to illegal alcohol Customs Service. The honorary patronage over the - 97% of respondents rejected the possibility of pur- cerned is legal? Initiated in 2013, the campaign was a response campaign was assumed by the Marshal of Podkarpackie chasing alcohol of unknown origin in the future, The Ministry of Finance and the Polish Security to worrying data on the consumption of illegal Voivodeship, Voivodeship Office in Szczecin, West Pomer- - as the most effective ways of differentiating alcohols Printing Works (PWPW), in collaboration with the alcohol in Poland. The purpose of the under- anian Voivodeship Executive Board, City of Szczecin, City were considered the place of purchase (81%) and its ZP PPS, have developed the Information System taken activities was to make Poles aware that of Koszalin and Polish Toxicological Society. very low price (80%) on Excise Tax Label Bands (SIBA) which allows there is no “reliable source” of illegal alcohol consumers to verify online whether a given and that any bottle of an alcoholic beverage Communication Tools product has a legal label band. To this end, it is may contain substances which are health- and • 100 mini billboards, 15 print ads and 18 ads on buses enough to enter the series, number and the year life-threatening. • 18 additional publications in local and national press, of the label band on the website www.bandero- 83 publications online laakcyzowa.pl. The website is also available on About the Campaign • 306 ad broadcasts in 5 local radio stations mobile devices. In Poland, there is still high tolerance for buying alco- • 1900 posters near bazaars and market places hol outside official points of sale. Sellers often mislead Customs Service Hotline consumers, saying that they offer moonshine, tinctures Media All signals of any irregularities should be reported using the following telephone number: or stolen spirit, while in the reality the offered bottle con- To reach potential consumers, the activities were under- ORGANISATION OUR tains disinfected industrial alcohol. taken in cooperation with regional media (Fakt, Nowiny, 800 060 000 or via electronic mail at powiadom- Głos Dziennik Pomorza, Radio Leliwa, Polskie Radio [email protected]. Each reported event is The campaign activities were conducted in two regions of Koszalin, Polskie Radio Gdańsk, Polskie Radio Rzeszów, analysed and used to specify the profile of control the country – the northern and the south-eastern one – Radio Złote Przeboje – Szczecin). Outdoor advertising and inspection activities of the Customs Service. where the highest levels of consumption of illegal alcohol media provided additional support. were recorded. The main assumption was to reach potential buyers with the campaign message. For this reason, Campaign Evaluation: the creative concept of the campaign was based on the - 91% of respondents assessed the campaign as positive idea of fictitious ads of cheap alcohol placed in popular and declared that more actions of this kind should be places of trade, such as bazaars and market places. undertaken - only 7% of respondents were not able to indicate any

potential health consequences of the illegal alcohol IMPACT ECONOMIC consumption, as the most important were indicated

or many years, the Ministry of Finance have cooperated with the ZP PPS to counteract the growth of shadow economy. The collaboration consisted, among others, in the organisation of a series of Ftrainings and workshops for officers responsible for combating this phenomenon. In 2013, considering the increased threat of illegal alcohol from the Czech Republic, the Ministry supported the Associa- tion in the organisation of the campaign named NO TO ILLEGAL ALCOHOL. It was recognised that the consumer education is crucial for counteracting the spread of illegal alcohol. The awareness of this danger, combined with professional training of the Customs Service, the Border Guard and the Police, provides a synergy effect and increases the effectiveness of undertaken actions. If consumers stopped resorting to illegal alcohol, the scale of the organised crime in this field would decline. Education always has great

value in combating social issues. For this reason, the Ministry of Finance has a positive approach towards IMPACT SOCIAL such initiatives and often inspires actions of this kind. For example, it gives each citizen purchasing alcoholic beverages the possibility of verifying online in the Information System on Excise Tax Label Band (SIBA) whether a given label band is authentic or placed on a proper product. In the case of suspicion that a given label band has been falsified, any citizen may contact the Customs Service via hotline or e-mail.

ARTUR JANISZEWSKI, DIRECTOR OF CUSTOMS EXCISE, TAX AND GAMBLING CONTROL DEPARTMENT, ONE IN 3. BOTTLES OF ILLEGALLY DISTRIBUTED ALCOHOL CONTAINS TOXIC CHLOROFORM, MINISTRY OF FINANCE WHEREAS ONE IN 10 CONTAINS METHANOL.

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

32 33 PRACTICE GOOD COMPANY Problem: drink-driving “Been drinking? Don't drive!” Road Safety Improvement In 2013 the event was participated by more than 150 The analysis of police data shows the decrease in the number of accidents caused by drink-driving and significant volunteers who in 42 clubs in 37 Polish cities encouraged fall in the number of stopped drunken drivers compared to the total number of inspected drivers. In 2014, drunken drivers to show responsibility and not consume alcohol to drivers participated in 3,552 road accidents, which is by 50% less than it was in 2005 (6,969 road accidents). ensure that they will drive their friends safely home. The organiser of the event is Foundation KRZYŚ.

Between 2008 and 2012, the Association conducted a country-wide social campaign entitled “Been Drinking? Don't Drive”, the message of which has gained a per- manent recognition among Polish people. The campaign was directed mainly at young drivers and emphasised the dramatic consequences of drink-driving. The campaign activities included, among others, ad spot broadcast in European Night Without Accident TV, cinemas, means of public transport and higher edu- For many years, the ZP PPS has supported the cation institutions, distribution of leaflets by the Police

organisation of the European Night Without and workers of filling stations, as well as participation ORGANISATION OUR Accident (ENBW) in Poland. It is an interna- in special events. The campaign “Been Drinking? Don't tional project aimed at reducing the number of Drive” gained a 92% of recognition according to its evalu- drunken drivers on the roads. ation results.

Since 2013, due to the development of other projects, activities undertaken within this campaign has been limited and are conducted mainly on a local level. The campaign 92% CAMPAIGN RECOGNITION was part of such events as: ACCORDING TO CAMPAIGN • The picnic event organized on the occasion of the European Road Safety Day in Warsaw, on May 11, 2013. EVALUATION STUDIES • The picnic “Been Drinking? Don't Drive” promoting

road safety in Lublin, on May 12, 2013. IMPACT ECONOMIC • The picnic “Been Drinking? Don't Drive” promoting road safety in Lublin, on October 5, 2014.

uropean Night Without Accident is an international project aimed at reducing the number of car accidents and the number of drunken drivers on the roads. The campaign is organised in all the EEU countries and always takes place on the third Saturday of October. During this event, volunteers talk to drivers in clubs and encourage them not to consume even the slightest dose of alcohol before driving a vehicle. Drivers, to mark their participation in the action, wear a recognisable, disposable band. Its aim is to remind the drivers and inform others that persons wearing the bands must not drink any IMPACT SOCIAL alcohol. When leaving a club, all persons wearing the band have the opportunity to undergo a test to measure their alcohol level in blood. Responsible drivers are awarded with small gifts. At the same time, persons with observed alcohol in the exhaled air are encouraged to leave their vehicles and use alterna- tive modes of transport. The ZP PPS has supported the campaign since its very beginnings. Thanks to kindness and understanding, as well as sharing common goals, which is education and promotion of appropriate behaviours, the campaign has been continuously organised since 2005. MICHAŁ KOPACKI, PRESIDENT OF THE "KRZYŚ" FOUNDATION

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

34 35 PRACTICE GOOD COMPANY sion regarding the number of points of sales which took PUBLIC DIALOGUE place among city inhabitants. The participants discussed the relationship between the number of points of sale The spirits industry sees its mission in creat- and the safety in the city, as well as effective prevention ing positive role models and reducing harmful 30 measures. EXPERTS AND HEALTHCARE POLITICIANS alcohol consumption in Poland. However, its HAVE PARTICIPATED IN THE DEBATES ORGANISED representatives are aware that issues they • September 19, Cracow: BY THE ZP PPS TO DATE deal with are complex and their solving is pos- In Search For Effective Measures of Safety Improvement sible only through dialogue and multilateral – debate on the alcohol prevention in cooperation with cooperation. the Cracow City Hall. The debate formed part of public consultations concerning the initiative of the Mayor Our Social Debates of Cracow aimed at reducing the number of points of alcohol sale in Cracow due to the complaints made by In 2014, the Association launched a series of social debates inhabitants. The special guest of the meeting was Kate addressing issues which are related to the developing of Winstanley from the UK Community Alcohol Partner- a culture of responsible alcohol drinking. The aim of this ships, a social organisation addressing the safety of project is to foster dialogue with public administration and cities and city districts, as well as limiting access to al- ORGANISATION OUR healthcare experts, as well as to identify specific problems cohol for minors. The British experience was presented which may be reduced with the support of the entire to the representatives of the police, municipal police, industry. shop owners and public administration officers.

In 2014, there were four social debates organised: • October 29, Warsaw: • September 15, Lublin: In Search For Effective Prevention Measures – a meet- Education For Safety - debate on the alcohol prevention in ing with public health and alcohol prevention experts cooperation with the City Hall. The meeting was partici- organised in cooperation with the CASE Foundation. The key issues discussed at the meeting included: the re- An important element was a discussion on the available pated by the representatives of local administration, law The aim was to emphasise the key challenges related lationship between public health and economic interests data on alcohol consumption, its interpretation and main enforcement services, alcohol prevention experts and to the reduction of harmful alcohol consumption and of producers, definition of responsible alcohol drinking, research questions. vendors. The debate was an answer to a public discus- the role of the spirits industry in this regard. examples of effective prevention measures. The debates are continued and further meetings on ECONOMIC IMPACT ECONOMIC • December 10, Warsaw: the alcohol consumption and its availability for minors Consumption Patterns and Culture of Alcohol Consump- have already been planned for 2015. The crowning of tion in Poland – a meeting with experts in such fields as the process of public dialogue conducted in form of statistics, social and cultural studies, as well as public broad consultations will be a summary report containing health, organised in cooperation with the CASE Foun- recommendations for the industry and other participants dation. The aim of the debate was to define the Polish of social life regarding effective prevention of harmful culture of alcohol consumption and changes which alcohol consumption. have occurred over the last decades. SOCIAL IMPACT SOCIAL 4 SOCIAL DEBATES TOOK PLACE IN 2014

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

36 37 PRACTICE GOOD COMPANY European Alcohol and Health Forum SAO – Social Aspects Organizations advertising materials are shown, the companies are The ZP PPS cooperates with a network of European RESPONSIBLE obliged to undertake any and all reasonable measures The ZP PPS is a member of the European association of social organisations established with the support of the to prevent availability of such materials for minors, the spirits industry (spiritsEUROPE) where it represents spirits industry. These organisations conduct educa- MARKETING • it is prohibited to suggest that the consumption of Polish entrepreneurs. Within the framework of the EU tional activities directed at reducing harmful alcohol alcoholic beverages before or during driving of any agenda of social responsibility of the spirits industry, consumption. In some countries, e.g. in Spain, Portugal mechanical vehicles and other modes of transport is the Association has adopted the Roadmap 2015 which is and the UK, partnerships between the spirits industry, OF ALCOHOLIC acceptable, binding upon all alcohol producers and obliges them to public administration and social organisations have • it is recommended that any and all website containing promote responsible alcohol consumption. All relevant, been founded. So far, more than 140 social campaigns PRODUCTS alcohol ads had a bridge site with an explicit question specific obligations have been made within the EU Alco- and educational programmes have been created on the asking potential users whether they are adults and with The spirits industry has been developing hol and Health Forum based in Brussels. Every year, the initiative of the spirits industry in the territory of the an information that content of the target site is directed self-regulation for several years now, striving spirits industry submits a report on the social initiatives European Union. The majority of them is of a long-term solely at adults, to establish the highest ethical standards in undertaken in various countries to the European Com- nature. • it is prohibited to suggest in any marketing activities conducting business activity. The members of mission. that alcoholic beverages may have any properties of the ZP PPS, considering the specific nature of preventing or curing any diseases, and that consum- products offered by them to consumers, im- ing alcoholic beverages is necessary for gaining social pose more and more stringent constraints on

acceptance or success. ORGANISATION OUR themselves which are often more restrictive than binding legal rules or applicable statu- tory provisions. Declaration Promoting the Culture of 140 Responsible Alcohol Consumption – RDM SOCIAL CAMPAIGNS CONDUCTED BY THE INDUSTRY IN THE EU Code of Good Marketing Practices (responsible drinking message)

In 2011, as part of the Association's operations, the Code In 2012, on the initiative of the EXAMPLES OF PREVENTION CAMPAIGNS CONDUCTED BY THE SPIRITS INDUSTRY of Good Marketing Practices was developed. It requires Association, member companies spirit beverages promotion to be compliant with law, signed the declaration on label information related to responsible SWEDEN good practices and in no way should encourage to irre- IRELAND Prata om alcohol alcohol consumption (Responsible P-A-C-I-N-G to reclaim FINLAND sponsible alcohol consumption or its abuse. In 2012, the your week-end PuhutaanAlkoholista.ﬁ Conduct Procedure was adopted to the Code. The pro- Drinking Message). In the said declaration, they expressed their willingness IMPACT ECONOMIC UNITED KINGDOM ESTONIA cedure states the principles of proceedings in the case Drinkaware.co.uk JooTargalt.ee of the Code’s violation by any of its signatories. In such to place such information at the labels of all spirit prod- DENMARK Alkoholdialog.dk ucts introduced and traded on the Polish market until the POLAND case, members can agree to remove a given company THE NETHERLANDS Lepszy start dla Twojego end of 2015. Such information may have a form of a link BELGIUM BOB dziecka LATVIA Puis-je boire un verre Aizkulises from the Association. à sa santé? to internet website containing guidelines for responsible

erre Puis-je boire un v Alcool et grossesse : Lepszy start à sa santé ?ous vous posez les questions que v dla Twojego dziecka alcohol consumption, e.g. www.pijodpowiedzialnie.pl, or Pour un développement Każda ilość alkoholu harmonieux As it follows from the Code: e bébé, spożywanego w czasie ciąży de votr może prowadzić il est recommandé e do uszkodzenia płodu de ne pas boir de boissons GERMANY responsibledrinking.eu CZECH REPUBLIC contenant de graphic icons. l’alcool pendant la grossesse et Pobavmeseoalkoholu.cz l’allaitement. Schu-ju.de • it is recommended that persons shown in all materials

Parlez-en avec votre gynécologue ou votre médecin. Ils sauront vous conseiller. ROMANIA FRANCE Tu alegi cu cine faci cunostinta serialbuveursocialoseur.com distributed by the signatories of the Code were at least in seara asta By the end of 2014, the information on the responsible marketresponsibly.eu drinksinitiatives.eu years of age, alcohol consumption had been placed on the labels of SLOVAKIA • during promotional events and other events where LUXEMBOURG Nemáš 18? Educalcool.lu Nemáš šancu! 96% of spirits introduced onto the Polish market by the

PORTUGAL BULGARIA members of the ZP PPS. bebacomcabeca.pt konsumirai-otgovorno.bg SOCIAL IMPACT SOCIAL AUSTRIA HUNGARY Verantwortungsvoll.at ItalMertek.hu

13. AZ ALKOHOL NE M FOLYÉKO NY KA BÁT

mikor hazaindulsz a bárból, öltözz fel alaposan, ne hagyd hátra a kabátod! Hamis hőérzeted lehet az alkoholtól, és egy szál pulcsiban könnyen összeszedhetsz egy betegséget, amivel napokra kivonhatod magad a forgalomból. Felejtsd el, hogy az Advertising Code of Ethics alkohol melegít! Időlegesen úgy érezheted ugyan, de az energia, amivel a szervezeted az alkohol lebontásán dolgozik, azoknál a folyamatoknál fog hiányozni, amik többek közt azért is felelnek, SPAIN hogy ne fagyj meg a hidegben hazafelé. 14. az idő a megoldás

Mas de 100 razones para que un Tudod, az idő mindent megold: azt is, ha nem sikerült mértéket CYPRUS tartanod, és túl sokat ittál. Hogy kijózanodj, bizony várnod kell, ez az egyetlen megoldás! Hagyd a májadat dolgozni – amíg Since 2007, the Association has been a member of Union megtisztítja az alkoholtól a véredet, pihenj, ülj le, dőlj le aludni! Legközelebb pedig, mikor alkoholt innál, emlékezz, milyen menor no beba alcohol véve igyál, mértékkel! Potomemetro.com

15. TUDD A SZÁ MOD!

Ne csak a mobilodét, hanem azt is, hány italt ihatsz, hogy józanul és vonzón legyen esélyed rá, hogy valaki elkérje az előbbit, vagy ne akadjon össze a nyelved, ha te kérnéd el valakiét, aki megtetszett. 2 a számod, ha lány vagy – maximum két italt igyál meg egy nap! of Associations Advertising Council, an organisation 3 a számod, ha ú vagy – a napi adagod legfeljebb 3 ital legyen! 4, a kivételes szám – különleges, ritka alkalmakon, ünnepeken néha ihatsz 4 italt. 0, a tabu szinonimája – egy korty alkoholt se igyál, ha bármilyen járművet vezetnél utána, legyen az autó, motor, jet ski, vitorlás vagy bicikli! De a 0 a számod akkor is, ha kisbabát vársz, vagy ITALY gyógyszeres kezelés alatt állsz. Ha épp’ egyik sem illik a GREECE helyzetedre, akkor is vonatkozik rád ez a szám: bármennyire is szereted a sört, a bort, vagy bármilyen más italt, legyen hetente Io vivo minimum egy nap, mikor semmi alkoholosat nem iszol! αλκοόλ και οδήγηση δεν 16. TART S VEL ÜNKATO VÁBB I INFÓKÉRT ! responsible for self-regulation in the advertising area in

Hogy mindig tudd, mi a legjobb döntés egy buliban, egy bárban, mediterraneo vagy akár egy otthoni iszogatásnál, gyere a Facebook-oldalunkra, www.italmertek.hu συνδυάζονται MALTA és látogass el a honlapunkra is! Drinkawaremalta.mt www.facebook.com/italmertek Poland. It directs its efforts towards improving marketing communications standards. The self-regulation system is based on Advertising Code of Ethics, developed jointly by 11 advertisers, advertising agencies and media.

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

38 39 PRACTICE GOOD COMPANY OUR ORGANISATION OUR ECONOMIC IMPACT ECONOMIC SOCIAL IMPACT SOCIAL GOOD COMPANY GOOD COMPANY PRACTICE

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

40 41 PRACTICE GOOD COMPANY BROWN-FORMAN HENKELL & CO. POLSKA DIAGEO POLSKA VINPOL POLSKA „RESPONSIBILITY LIVE EVENT” “ART SPONSORSHIP” FIELD: employee education “ALCOHOL IS RESPONSIBILITY. FIELD: local communities GOAL: inauguration of a global initiative named DRINK SENSIBLY.” GOAL: supporting a culture and contemporary “Responsibility Live” FIELD: consumer education art institution in Toruń ALTVATER GESSLER GOAL: shaping social attitudes in terms of responsible In 2013, Brown-Forman Polska – as a pioneer on the alcohol consumption The company cooperates with the Centre of Contemporary – J.A. BACZEWSKI European market – launched the global initiative Re- Art in Toruń since it was established. Within this coopera- sponsibility Live, which is aimed at promoting the idea of The campaign has been carried out uninterrupted for tion, the company provides the guests and the visitors "REVIVING PRE-WAR TRADITION" corporate responsibility among its employees. The whole more than 5 years now. So far, the campaign activities of the exhibition with a glass of an extraordinary drink, FIELD: national heritage protection, country promotion day meeting composed of modules addressing the issue were conducted in partnership with the REAL hypermarket simultaneously emphasising the unique character of GOAL: restoration of a pre-war brand and tradition of responsible alcohol consumption, in particular the chain, Medical University of Warsaw, "KRZYŚ" Foundation, events organised by the Centre. For many years, lHenkell of manufacturing issue of drink-driving. During the meeting, employees Automotive Market Research Institute Samar, the Polish & Co. Vinpo Polska has been the sponsor of the interna- OUR ORGANISATION OUR witnessed a car accident. The tragedy caused by a young Student's Association, Motor Transport Institute, Interna- tional film festival Tofifest. The character of the festival The history of the Baczewski family is the history of manu- man – “the hero of yesterday” – unfolded in front of them. tional Police Association Polish Section and many experts. and the presented films features unique creativity and facturing alcohol. The return of the company to Poland This event, which was staged as it turned out later, per- The activities undertaken in 2013 and 2014 included: passion for arts. These two features are close to the com- is like a restoration of a national treasure. The company fectly illustrated the consequences of lack of responsibil- • Education on the alcohol impact on a human body and pany. The festival and the company have also in common commenced its pioneering alcohol production near Lvov in ity for oneself and others. The event included quizzes, principles of responsible alcohol consumption via the the localisation in Toruń, the city of culture and beautiful 1782. Between 1782 and 1939, it made the words like Lvov meetings with experts, victims and perpetrators of car website www.pijrozwaznie.pl. Gothic architecture. Tofifest is a festival of unconventional and Poland recognisable in 80 countries on all the world's accidents resulting from drink-driving, as well as the- • Facebook profile and trainings on the alcohol impact on movie shows and dialogue between film artists and view- continents. Investments were made in manufacturing tech- matic workshops. The participants of the meeting could the human body named DrinkIQ for students. ers. Henkell co-organizes the official opening and closing nology and modern, elegant packaging. When the company find out themselves how a human body reacts to alcohol, • Promotion of responsible alcohol drinking in premises ceremony of the festival, sponsors awards and the banquet was inherited by the great-grandson of its founder (Józef trying to carry out simple actions in goggles imitating the where it is sold: shops. taking place after the official part. Adam Baczewski), it became the pioneer of impressive state of a human organism under the influence of alco- • Promotion of road safety: an action of collecting signa- advertising. During the 1894 Great Domestic Industrial Ex- tures under the declaration “I drive I don't drink” (more

hol. At the end of the meeting, employees took individual OUTCOMES: The Centre for Contemporary Art "Znaki IMPACT ECONOMIC position of an impressive size was sponsored by the factory decisions related to the promotion of responsible alcohol than 76,000 signatures were collected!). Czasu" was opened in June and is one of the most owner. The company also succeeded at the 1925 London drinking, both in professional and private life. • Online training on the use of alcohol, in particular modern spaces dedicated in whole to the contemporary Spirits Exposition. The international expansion thrived. In allowing to combat drunken drivers. Innovative Face- art in Poland. Through exhibitions, lectures, seminaries, the 30's the company opened is subsidiaries, among oth- OUTCOMES: The results of a survey conducted after the book competition for students “Drink sensibly. Master residential programmes for artists publications, educa- ers, in Paris, Prague and Vienna. The dynamic business event clearly indicated its high value and meaning for Class”. OUTCOMES: More than 5,400 fans of the cam- tional activities and creation of art collection all of them development was stopped by the Second World War. The employees. Nearly 100% of employees declared that the paign and 4,517 users of applications, including 1,375 supported by partners the Centre is actively involved in factory – the achievement of the centuries-old passion of event made a very strong impression on them and led to active participants of the competition. As much as 9,248 the circulation of contemporary art. The shows of 150 the entire family - was destroyed through bombardments reflection. The vast majority of respondents decided to votes were cast in the competition gallery. According to films have already been planned for the next 13th edition and looted by the occupants. After 157 years of operations share knowledge and experience gained during the event our estimates, in total, the message of our campaign of the Tofifest Festival. The organiser estimates that this on the Polish soil, the company ceased to exist. No sooner with their family and friends. reached 668,000 Polish students, i.e. approximately event will be participated by 10,000 people. than in the 50's the family reclaimed its ownership of the 40% of all students in Poland! trademark and opened its first office in Vienna. SOCIAL IMPACT SOCIAL • The campaign has been awarded several times in the OUTCOMES: In 2011, after more than 70 years of emigra- Good Practice Report of Responsible Business Forum tion, the brand J.A. BACZEWSKI is back in the country, (FOB). while Polish people discover the national economic history. • Stevie Awards – in the category PR Communication or In its communication with clients the brand refers to the Campaign of the Year conducted in Social Media. Lviv tradition and the times of pre-war greatness. It is still • United Nations Global Compact Yearbook – Diageo functioning as a family-owned business. Thanks to the was the only Polish alcohol company mentioned in this operations undertaken by the company, it was possible to publications in appreciation of its engagement in the

protect and revive the pre-war Polish alcoholic brand. campaign. Miedziak, Natalia credit: Photo of the Centre the courtesy thanks to

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

42 43 PRACTICE GOOD COMPANY NALEWKI STAROPOLSKIE KAROL MAJEWSKI I WSPÓLNICY “OLD POLISH TINCTURES” FIELD: consumer education, national heritage protection GOAL: protection of traditional recipes and regional products STOCK POLSKA WYBOROWA “Nalewki Staropolskie” is a family-owned company which “BE ECO WITH STOCK” PERNOD RICARD was founded 11 years ago. Its operations focus on the FIELD: environmental protection OUR ORGANISATION OUR MAZURSKIE MIODY manufacturing of tinctures in accordance with traditional GOAL: raising the environmental awareness of employees “RESPONSIB’ALL DAY: home-based, family recipes. The manufacturing process BEEN DRINKING – I DON'T DRIVE!” BOGDAN PIASECKI is based on the fruits of the oldest, wild breeds, originat- In 2014, Stock Polska launched a long-term campaign FIELD: employee education, consumer education ing from natural cultivation in small, village orchards. aimed at raising awareness of employees in the area of GOAL: promotion of responsible alcohol consumption “MEADS” Tinctures reach their unique taste through many years pro-environmental actions. The first stage of the cam- among consumers FIELD: consumer education, national heritage protection of ageing. At the beginning, they ripe in the sun which paign was aimed at presenting and implementing rules GOAL: protection of traditional recipes and regional highlight the full range of the most fascinating aromas for waste management. Employees received informa- In 2014, another edition of the Responsib'ALL DAY. On products and tastes. Next, through at least three years, they age in tion concerning pro-environmental activities through all May 22, 2014, more than 18,000 employees of Pernod basements in glass vases. The manufacturing of tinc- possible communication channels, including e-mails, Ricard Group worldwide, including nearly employees and The tradition of the company Mazurskie Miody dates back tures is based only on the use of fresh fruits. No chemical posters, banners and communication meetings organised guests of the Wyborowa Pernod Ricard in Poland, jointly to the early 20th century, when the most eminent vodkas agents, preservatives nor artificial food colourings are in all the departments of the company. All employees of celebrated the idea of responsible alcohol consumption. and liquors were manufactured in the estate of the family used. The entire production process is hand- and home- the Lublin factory ( persons) and employees of external They did it within the framework of the fourth edition of a ECONOMIC IMPACT ECONOMIC Piasecki, in Horodec, in the Polesie region. The first recipes made. companies were trained on the rules for waste manage- global programme on the corporate social responsibility of manufacturing drinks have been developed by word of ment applicable in Stock Polska. Responsib'ALL DAY. The participants cycled through the mouth and on the basis of instruction given by regional REZULTATY: The manufactured exclusive products are streets of Warsaw and Zielona Góra to demonstrate their masters of distillation and mead making. Using old, proven considered a niche product of premium quality and ap- OUTCOMES: The building of pro-environmental attitudes support for promoting responsible alcohol consumption recipes, improved by next generations, the successors of pearance. Individual types of tincture are manufacture in among employees and making them more sensitive to- among drivers. For the first time, the action has also the family are currently manufacturing meads, liqueurs, short series and all of them are aged. At the moment the wards environmental issues. Since September 2014, the been directed at cyclists due to the fact that this group of vodkas and fruit spirits. The Factory of Vodkas and Dis- tinctures manufactured between 2004 and 2008 are intro- company has observed a significant growth of environ- road traffic participants become increasingly large and tillates which was founded in the region of Varmia and duced onto the market, the youngest tinctures are from mental awareness, which is reflected in the downward important. Masuria combined the respect for tradition with modern 2010. The products of the company are recommended by trend of waste management costs. Once the additional manufacturing processes, which is proved by the qual- Slow Food Poland. They have been awarded the Golden waste segregation has been introduced, 35% of generat- In cooperation with the Capital City of Warsaw and the ity management system in the food sector certified by the Distinction Award. The company cooperates permanently, ed municipal waste was transferred to the recycling. The City Hall in Zielon Góra, the company funded all together company. Attention should also be drawn to the distinctive among others, with the Atelier Amaro restaurant. generated packaging waste is entirely recycled. Further- 13 service stations for cyclists in the spot of the highest SOCIAL IMPACT SOCIAL taste qualities of non-brewed meads and honey spirits (in more, external companies performing work at the factory traffic road. These stations are marked with the com- Polish named "okowita" after Latin "aqua vita" the water premises are obliged to observe a contractual clause on pany message signs "BEEN DRINKING DON'T DRIVE" of life) which are based on natural bee honeys from Varmia the liability for generated waste and, before commencing and an educational application named AlcoFACTS. The and Masuria region, with the company Mazurskie Miody works, are informed about the rules applicable in Stock Responsib'ALL DAY also focused on the message "BEEN being the only producers of these beverages in Poland. The Polska. DRINKING DON'T DRIVE!". honey spirit was entered onto the List of Traditional Prod- ucts of the Varmia and Masuria Voivodeship. The unique Further stages of the campaign are planned. The will In several cities in Poland there were organized trainings composition of meads used to produce this honey spirit and cover such issues as reduction of water usage and elec- for employees on the risks of drink-driving and the rules precise process of distillation guarantee the unique taste. tricity consumption. for providing first aid to the injured due to road accidents.

SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014

44 45 PRACTICE GOOD COMPANY ANY QUESTIONS AND OPINIONS RELATED TO THIS REPORT SHALL BE REFERRED TO: Iga Wasilewicz PR Manager [email protected]

OUR ADDRESS: Association of Employers Polish Spirits Industry (ZP PPS) Trębacka 4, Room 338 - 342 00-074 Warsaw Phone no. +48 22 63 09 887 e-mail: [email protected] http:www.zppps.pl http:www.pijodpowiedzialnie.pl

GRAPHIC DESIGN AND TYPESETTING: Olga Figurska, Fabryka Komunikacji Społecznej

Warsaw, 2015

This report has been printed out on the G-Print paper of Arctic Paper company, produced from wood from sustainably managed forests. The G-Print paper is certified with FSC, while paper company producing the paper complies with EMAS reporting standards.

46 SOCIO-ECONOMIC IMPACT OF THE SPIRITS INDUSTRY IN POLAND 2013-2014