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European Union excise proposals "fail to address distortion" - SpiritsEurope

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The European Commission has announced its proposals for reforms of the rules on excise duty for alcohol in the European Union, drawing the ire of spirits producers in the region.

Under the proposals from the European Commission, the abv of lower-alcohol beer, which qualifies for reduced excise rates, will rise from 2.8% to 3.5%

Under the proposals from the European Commission, the abv of lower-alcohol beer, which qualifies for reduced excise rates, will rise from 2.8% to 3.5%

The proposals to amend the Excise Structures Directive, 92/83 were handed down by the commission late last week. Among them are an increase in the level of abv for reduced tax rates on beer, from 2.8% to 3.5%, and reduced excise rates for small cider and perry producers.

Under the changes, EU member states would be permitted to allow independent cider makers to charge up to 50% reduced national excise duty rates, where they produce less than 15,000 hectolitres per year.

Responding to the proposals, trade association Spirits Europe argued that tax discrimination between beer and spirits in the EU is "already excessive".

"The proposal fails to address unfair distortion between alcoholic beverages in the EU and risks increasing tax discrimination further, by proposing additional tax benefits for beer and cider, which already enjoy much lower tax rates than spirits," the trade body said.

SpiritsEurope director general Ulrich Adam added: "Sectors that already enjoy massive tax benefits when compared to spirits would be handed 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."

The proposal would also establish a uniform EU-wide certification system allowing manufacturers to confirm if they are independent, small alcohol producers who can sell their products at reduced excise duty rates. The aim is to reduce administrative and compliance costs for such small producers seeking these tax benefits.

The Council of Ministers will need to unanimously back the revised directive for it to come into effect.

The EU operates a part-harmonised system of imposing only minimum rates of excise duties that member states can charge for specific alcoholic products.

For full details on the proposed amendments to the directive, click here.


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