Tax Pass-Through Under Retail Monopoly : Evidence from the Swedish Beer Market

Sammanfattning

On July 1, 2025, a reform came into force that reduced the alcohol excise tax for independent small breweries in Sweden, with the stated aim of improving their economic conditions. This study examines the extent to which the tax reduction remained with the breweries or was passed on to consumers in the form of lower consumer prices. The analysis is based on monthly sales data from Systembolaget for the period January 2024 to December 2025 and uses a difference-in-differences model comparing breweries receiving the full 50 percent tax reduction with breweries not covered by the reform. The results provide no evidence that the tax reduction was passed on to consumers in the form of lower consumer prices, but rather indicate that consumer prices remained largely unchanged. The results are consistent with previous literature on sluggish pricing among smaller firms, product differentiation, inelastic demand, and asymmetric pass-through following tax reductions.