World Trade Organisation backs EU, US in Philippines spirits tax dispute

World Trade Organisation backs EU, US in Philippines spirits tax dispute

The World Trade Organisation has confirmed that it has sided with the US and European Union in their dispute with the Philippines over tax on imported spirits, but an appeal is expected.

Europe's spirits industry trade body, CEPS, said today (15 August) that it has received official notification from the World Trade Organisation (WTO) on the dispute. In it, CEPS said, the WTO agrees that the Philippines has been illegally taxing imported spirits at higher rates than alcohol produced domestically. 

Industry sources informed just-drinks of the WTO's decision back in June. The US has also emerged victorious in the case, which dealt with both EU and US complaints together.

Welcoming today's official announcement, CEPS' director of trade and economic affairs, Marie Auden, said: "We have been struggling with this issue for a long time. We trust the Philippines authorities will now take the necessary actions to remedy this situation and comply with international trade rules."

Tax on imported spirits in the Philippines can be up to 50 times higher than that applied to local brands, according to CEPS. Brandy de Jerez from Spain stands to gain most from a reduction in tax, due to its popularity with local consumers. 

However, distillers may have to shelve celebrations for the time being. The Philippines Government has already announced its intention to appeal the WTO decision.