The Commission proposes to increase the minimum excise rates on alcohol by 31% in order to keep up with inflation. The spirits industry strongly opposes such plans.
The Commission has adopted a proposal to increase of the minimum rates of excise duty applied to alcohol and alcoholic beverages by 31%. The purpose of the proposal, adopted on 8 September 2006, is to take into account the inflation since 1992 and restore the real value of the alcohol duties. The Commission believes that more convergence of the rates of excise duty is necessary to ensure the proper functioning of the internal market and to reduce distortions of competition and fraud.
According to the new proposal, the minimum rate of excise rate for wine, per hectolitre, remains at zero. It would increase from €0.748 up to €2.45 for beer, from €45 to €59 for intermediate products and from €550 to €720 for spirits.
According to the Commission, a minority of the member states are concerned by the proposal and, in case of difficulties to transpose the new rates immediately, are entitled to transition periods up to 2010. Most of the EU-25’s national rates already exceed the proposed new minimum rates.
European spirits industry states that the prposal disproportionately raises the tax burden on spirits and will only increase illicit production and fraud in those countries where current rates are lower with potentially harmful health consequences for consumers.