Parliament rejects increase of alcohol excise duties

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The Parliament has rejected the Commission’s proposal to increase the EU-wide minimum levels of excise duty on alcoholic drinks, referring back to the Parliament’s Economic Affairs Committee.

The Parliament was set to vote on 23 May 2007 on a report calling for the abolition of minimum rates of excise duty on alcoholic beverages, but after a series of close votes on several amendments, the MEPs decided to vote against the whole Commission proposal (355 against, 198 for, 39 abstentions). According to Parliament’s rules, the issue is therefore now referred back to the Economic Affairs Committee. 

Parliament’s position on taxation matters is consultative only and member states in the Council can choose to maintain the current rates or increase them as they wish. However, according to EU rules, as long as the Parliament has not officially given its opinion, the dossier cannot move forward. 

The Commission proposed, in September 2006, to increase the current minimum excise rates for alcohol (beer and spirits only, as excise rate for wine would remain at zero) by 31% in order to keep up with inflation. The plans are strongly opposed by the spirits industry. 

“Minimum rates don’t apply to wine because of French lobbying, but they do apply to beer and spirits. This is especially unfair to Scotch whisky drinkers, who pay the highest minimum rates,” said Conservatice MEP John Purvis.  

The rapporteur, MEP Astrid Lulling, who proposed to scrap the minimum levels of duty altogether, wants member states to lay down a Code of Conduct under which member states with duties above the EU average would take steps to gradually decrease them, and those with duties below the average would consider raising them by an appropriate amount. These changes could then be done “depending on the status of their economic cycles”. 

Amendments from the Socialist group aimed at increasing the levels of duty by less (4.5% instead of 31%) than the Commission originally proposed – in line with inflation since 2004 and not since 1992 as proposed by the Commission. The Socialist group amendments are in line with Council’s position on the issue – increasing the duties, bu referring to inflation since 2004.

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