The European Parliament has narrowly opposed proposals to allow EU member states to reduce value added tax on alcohol served in restaurants.

Under proposals from the European Commission, restaurant food will become a low-rate tax option for all countries in 2011.

An amendment in the European Parliament calling for alcoholic drinks in restaurants to be included in the proposal was this week rejected by MEPs, however.

EU taxation Commissioner László Kovács said that liberalising restaurant alcohol VAT was a bad idea "considering the global health policy of the EU."

Under the EU's complex national exemptions from EU VAT laws, Spain, Italy, Luxembourg and Portugal already apply reduced VAT rates on restaurant alcohol. Other countries cannot without special EU permission.