Brewers push for tough limits on beer excise duties in EU

Date: 21/10/1999

A Nordic-led coalition of European brewers is warning EU tax chiefs that firms face financial ruin unless the Union agrees to impose tough new ceilings on beer excise duties.

The 'Fair Excise for Beer' (FEB) campaign, which includes brewers groups from high-duty Scandinavian countries and the UK, claims massive differentials in the duties levied by member states are distorting the EU beer market, encouraging shoppers to cross borders in search of cheaper beer.

FEB legal advisor Birgit Ris argues that the Union should introduce a fair excise duty 'band' to iron out these differentials before companies go the wall.

She says brewers in the UK - particularly in the south east - have been hit by cheap beer available from northern French ports, and that the plight of Scandinavian firms is even worse because of EU moves to review their governments' right to restrict how much alcohol citizens can bring back with them from abroad.

“These derogations were negotiated when Denmark, Sweden and Finland joined the Union. But there is little chance that they will be renewed,” said Ris. The result, she argues, will be an opening of the floodgates to imports of foreign beer.

Ris said the huge differences in duties between member states were a powerful incentive for shoppers to cross EU borders, particularly those living close to a port or border.

Excise duties in the UK are six times the rate in France, and can double the wholesale price. The rate in Denmark is three time higher than in neighbouring Germany, and the levy in Finland is 15 times higher. “One member state should not be allowed to charge 15 times more than its neighbour - that is off the wall,” insisted Ris.

FEB, which has just launched a lobbying campaign to try to convince MEPs, Commission officials and governments of the need for a change in the rules, admits it will be far from easy to persuade high-duty countries to accept its arguments, given that they rake in billions of euro a year from excise duties.

But Ris said the industry was heartened by comments from new Single Market Commissioner Frits Bolkestein during his European Parliament 'audition' last month. Bolkestein told MEPs it was “in the best interests of the EU” for excise duties and value added tax to be harmonised.

Swedish Liberal MEP Gunilla Carlson organised a hearing on the issue with Commission officials and industry groups earlier this month. “High duties do not help the consumer. They just give a very good market to the smugglers,” she said.