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EU excise revision fails to address gap between spirits and beer - trade association

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Craft spirits companies in the European Union will be at a continued disadvantage to their brewing cousins, a trade organisation has warned, despite recently-proposed changes to excise duty legislation.

Brewers in the European Union can produce more pure alcohol than distillers before excise rates take effect

Brewers in the European Union can produce more pure alcohol than distillers before excise rates take effect

Late last week, the EU's Council of Ministers approved a revision of the rules on alcohol duty in the bloc. The proposals have been designed to promote lower-strength alcoholic drinks by offering reduced duty rates on drinks with an abv up to 3.5%, an increase on the current 2.8% ceiling.

Today, however, Drinks Ireland Spirits bemoaned the council's decision not to bring volume limits for spirits producers in line with brewers. The trade body highlighted that brewers can produce 1,000 times the amount of pure alcohol of distillers before they reach the full excise rate threshold.

"A craft brewer can produce 1m litres of beer before full excise applies, whereas craft distillers can only produce 1,000 litres before a (much higher) excise rate is charged," said DIS.

"Reduced tax rates can facilitate product innovation. It is illogical, however, that these reduced rates are not applied equally across all alcoholic beverages categories. Ireland's highly innovative SME distillers deserve better than the discriminatory treatment that has been outlined in this decision."

DIS complained that the current proposals would "increase distortion and discrimination" in the EU's Single Market.

The new rules are expected to come into effect at the start of 2022.

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Expert Analysis

Ireland Spirits - Market Assessment and Forecast to 2023

Ireland Spirits - Market Assessment and Forecast to 2023

The Irish spirits sector is led by the whiskey category in value terms, while gin & genever category is forecast to register the fastest value and volume growth during 2018-2023. On-trade transactions...

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