Europe: The Brewers of Europe outlined on March 2 the severe market distortions and dramatic impact beer excise duty rates have had on the economy, the environment, society and the industry using Sweden as a case study.
Although social and health concerns are cited as dictating tax policy, Sweden suffers increased alcohol abuse, increased social disorder and criminality, increased private importing, high levels of smuggling, and massive loss of Government revenue, the voice of European brewing said in a statement. Young men under 18 years of age drink 50% more alcohol per capita than the average male consumer. The brewing industry has lost 40% of its capacity in the last three years, and the loss of Government revenue due to legal and illegal imports is over €220 million.
The Brewers of Europe are concerned that the same situation could occur in Sweden’s neighbouring countries such as Denmark, Finland and Norway, where price differences have already resulted in beer imports of 30%, 10% and 14% respectively. Other effects of the high duty policies followed in these countries are also evident.
“The Swedish model sets out stark lessons for high taxing countries and allows only one conclusion to be drawn,” said Ebbe Dinesen, Chairman, The Brewers of Europe Fiscal Committee. "The only way to reach growth objectives and comply with Single Market principles is to reduce the excise duties in the high taxing countries.”
“The solution cannot be found in tax harmonisation,” continued Dinesen, “because of the differences in the purchasing power between different EU countries. Quite simply, the economies in other countries do not have the income levels to support escalating tax rates. Moreover, it has not been proven that high alcohol excise duties have effectively contributed in discouraging irresponsible consumption.”
“If we are to address issues of health and the environment, and defend economies, we need to let the single market genuinely work. Only that way will consumers really benefit.”
The Brewers of Europe is the voice of the European brewing industry to the European institutions and international organisations. Its current members are the national brewing associations of the 18 European Union member states, plus Norway, Switzerland and Turkey. The Brewers of Europe strongly advocate responsible consumption.
In 1993, the European Single market for goods was inaugurated for the greatest benefit of all citizens. However today in the Northern European countries the Governments still continue to promote policies which go against its principles. In May 2004, the European Commission published a Report on Rates on alcoholic beverages. It recognised the trade distortions due to the existence of excessive high duty rates in some Member countries.
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