In the review of Directive 92/83, which sets out excise tax structures for alcoholic beverages, a number of policy options have been considered, some of which would provide tax advantages to beer, wine and cider, but not spirits. However, all of these other sectors already enjoy massive fiscal advantages in comparison to spirits in every EU Member State. spiritsEUROPE therefore does not believe the review should provide them with even further benefits.
In our discussions with officials, we provided ample argumentation to demonstrate the extent of the discrimination against spirits, both in the structures and the applied rates, and showed that while spirits consumption accounts for just 25% of the EU alcoholic beverage market, taxes on spirits make up 45% of all tax revenues. The consequence is that spirits are denied an opportunity to compete fairly with other alcoholic beverages.
The spirits sector is already struggling to maintain sales values in an unfair but highly competitive market. Over the past decade our real value growth has been less than 1% a year. And that is despite ‘premiumisation’, in which consumers are trading up to higher value products. Since 1980, consumption of spirits in the EU has fallen by 36%, whereas the decline for beer and wine have been, respectively, 11% and 15%. If non-discriminatory excise rates were applied to alcoholic beverages and thus the competitive advantages given to the wine and beer sector removed, spirits producers would be in a much better situation.
The spirits sector has been consistent since the start of the discussions on the review of Directive 92/83: the review fails to target the real problem of tax discrimination; and the proposed policy measures appear capable of worsening the current discrimination. Spirits producers therefore do not believe there should be any changes to the Directive that would provide further tax advantages to the other categories which already enjoy massive tax benefits compared to spirits.
