Beer chief: French tax will hit all European brewers

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Beer sold in France is set to see a 120% tax hike.  The secretary-general of the Brewers of Europe says the move threatens thousands of French bars, and will have a knock-on effect for brewers across Europe.

Pierre-Olivier Bergeron is secretary-general of the Brewers of Europe. He spoke to EurActiv’s Jeremy Fleming.

What impact will the tax measure have on, say, a person entering a Paris bar and ordering a beer? When are the proposals due to take effect?

Very simply, a consumer entering a bar will find a small beer is suddenly around 30 to 40 cents more expensive. Whilst the brewers will try to absorb this tax as much as they can, the ones that survive this measure – and let’s remember we are talking about a government proposal for a 160% tax rise on beer – these brewers will have to pass some of the costs onto the consumer. The proposals are due to take effect from January 2013 but last week [15 November] the French Senate took a fresh look at this proposal and, realising that it would kill off thousands of jobs across France and probably even generate less government revenues in the long term, proposed rather a 120% increase, still a massive hike of course. The proposal is therefore now going back to the National Assembly to consider the changes, so the battle continues.

Has the French bar trade suffered to the same extent as the pub scene in the UK, are there significant closures?

Twelve thousand bars, cafés and restaurants have closed in France since just 2007. Whilst there are a number of factors that may have contributed to this – the general economic crisis being an obvious one – the beer market in France has also declined by a third in the last three decades. With beer consumption in France at just 30 litres per head per year, the second lowest in the EU, and beer representing over a third of the revenues for French cafés and brasseries, it is sure that extreme tax hikes can only further accelerate the decline of the beer market and the closure of yet more pubs and bars.

What action will you and your members take to try and avert the tax?

We are trying, with the support of robust data, to demonstrate that an extreme tax hike on beer is a disproportionate and discriminatory measure completely incompatible with François Hollande’s goals to promote growth and jobs. It is a measure that would hit hard all brewers, small and large, but also brewers outside the French borders. Thirty percent of French beer consumption is imported beers, mostly from other European countries, and these brewers will also have to pay the tax hike. We are thus mobilising all concerned parties – from brewers to cafés to consumers – to stand up for a key European sector.

Are there parallels with attempts in Scotland to introduce minimum pricing rules, also being examined elsewhere? What are the parallels?

There are parallels in the sense that both government proposals are completely ill-conceived and guaranteed not to have the intended results. Secondly, both proposals would certainly have a major impact on exports to the country. However, a crucial difference is that this French government proposal is intended to be a revenue generator whilst the Scottish plan is proposed as a public health measure. Interestingly, health arguments have come up in the French debate, but these are pretty spurious when non-alcoholic beer will also be hit with a tax rise and beer, with an average ABV of just 4.2% in France, is being singled out amongst the different drinks categories.

Is it difficult to co-ordinate action when other drinks sectors – such as wines and spirits – are not included in the new taxes?

This measure stigmatises and focuses on beer. Wine and spirits will not face a tax increase. So obviously, and logically, this is the brewers’ battle to fight. However, this is a measure that will affect all brewers, big and small, French and foreign. It will also have a huge knock-on effect on the whole beer supply chain – from the farmers growing the barley and hops to the cafés and shops that ultimately sell the beer. There are thus existing coalitions that are motivated together to fight the government’s outrageous proposal to kill off the beer sector and French café culture.

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