Spirits trade slams Belgium’s 40% tax hike

Spirits industry representatives have said there is “no reasonable justification” for the Belgian government’s recent decision to ramp up spirits excise tax by 40%.

Belgium has recently implemented a 40% tax hike on spirits

Effective from 1 November, consumers in Belgium will pay an additional €2.60 on a bottle of spirits, €0.13 on a bottle of wine and €0.01 on a bottle of beer.

Since 1 January 2013, Belgium has increased taxation on spirits by 70%.

Trade body Spirits Europe has hit out at the move and the discrepancy of increases between the different alcoholic drinks categories, claiming that from a health perspective “a unit of alcohol is the same whether it comes from beer, wine or spirits”.

“There can be no reasonable justification for such an imbalanced tax increase,” said Spirits Europe in a statement. “More than 30% of the spirits consumed is produced locally by SMEs which will suffer and yet they fully contribute to the social and economic fabric of their region.”

“We can already wager – as already witnessed in several other EU countries – that expected revenues from the tax increase will not occur because the increase will drive consumers to shift consumption to other product categories, to non-commercial alcohol and to cross border shopping, especially considering that more than 50% of the Belgian population lives within 50km of a border.”

The organisation has also urged the European Commission to “issue a strong message” in opposition to a proposed new tax system in Angola, which would impose a 70% tax on imported spirits and 45% tax on domestic spirits.

Calling the move a “blatant violation” of international trade laws, Spirits Europe said Angola is a “priority market” for spirits producers. Since 2004, EU spirits exports to Angola have increased from €6m to €41m in 2014.

In addition, the organisation has sent a letter to the Brazilian government urging lawmakers to establish a tax structure where imported and domestically produced spirits, such as Cachaça, are similarly taxed.

“These are only two examples but there are many more tariff and non tariff barriers we fight on a daily basis which prevent us from competing effectively with local producers of countries having nonetheless agreed to international trade rules,” said Spirits Europe.

Last month, Spirits Europe welcomed an “ambitious” EU Trade Strategy adopted by the European Commission, but called from more staff to be trained on trade-related matters.