Trade calls for ‘reduced discrimination’ in spirits tax

Spirits Europe has called for fairer taxation in drinks after the European Commission proposed reducing tax for beer and cider, but not spirits.

Amendments to the Excise Structures Directive offer unfair tax breaks for beer and cider, according to Spirits Europe

The European Commission recently published its proposed amendments to the Excise Structures Directive.

According to trade body Spirits Europe, the suggestions fail to address the “unfair distortion between alcoholic beverages in the EU”.

The European Commission has proposed reducing tax rates for breweries producing less than 20 million litres a year – said to be “1,000 times more generous” than taxation for small distilleries.

Current rules also allow reduced tax rates for beer up to 2.8% abv, with recent proposals suggesting this threshold could be increased to 3.5% abv. Meanwhile, there is no similar facility available for spirits.

Ulrich Adam, director general of Spirits Europe, said: “Micro and small distilleries are firmly rooted in the European landscape, with hundreds of new craft distilleries opening in recent years.

“They make a vital contribution to the rural community in providing jobs and supporting agriculture and tourism. We see no reason why tax benefits should be provided for beer, cider and perry but not spirits.”

According to Spirits Europe, spirits make up 25% of the EU’s alcoholic beverage market but contribute 45% of the tax collected. In contrast, beer makes up 42%, of the market, yet contributes 32% of tax revenues.

Adam said: “The proposals would mean that sectors which already enjoy massive tax benefits when compared to spirits would be handed out additional advantages.

“In light of the existing discrimination, such an approach would not only be extremely unfair, but would be a step in the wrong direction.”