"Beer Tax - The French Way "
                               Jean C.  Bellmore

France, the land of wine, is planning heavy taxes on beer, and that is not going down
well with brewers -- even in other nations.  President Francois Hollande is pushing
through legislation to increase taxes on beer by 160 percent to help fund struggling
social programs as France tries to contain a budget deficit hit hard by the economic

The tax would affect local brews and the 30 percent of imported beer the French
drink. The change means the price of a beer will increase by about 20 percent in
bars and supermarkets. The Brewers of Europe trade group called the measure a
`'kick in the teeth" especially since brewers have seen beer production plummet by 6
percent and consumption by 8 percent in the EU since the region's economic crisis
began in 2008.

The French beer  industry is centered in Alsace, hugging Germany and French
Flanders, which borders Belgium. There are complaints the measure could put some
out of business. Central and southern France are predominantly wine country, and
overall beer only represents 16 percent of the country's alcoholic drinks market. Still,
the Brewers of Europe said in a statement that beer is `'being singled out" compared
to wine.   Many opponents of the bill suggested that wine was exempted because the
industry has greater political clout, given that it is one of the country’s top three
exporters and employs 250,000 people. Wine is currently taxed around the same
rate as beer, per hectoliter, but unlike the rates for beer, its rates do not increase
with the degrees of alcohol.  

The loudest complaints outside of France have come from neighboring Belgium,  
Holland, and Germany, all major beer-producing nations. The tax hike will also be a
blow to smaller firms and microbreweries — which operate on a narrower margin than
large firms — and many may be forced out of business.

The new tax will greatly affect British firms as beer also represents a substantial part
of the U.K.'s food and drink exports. British companies export 28 million pints of beer
to France every year.  John Howard for the UK Brewers Association asked "How
would French vineyard owners react if Britain and Germany imposed a 160 percent
higher tax on wine? Their arguments — raising revenue and reducing consumption
of a supposedly harmful product — are just the same for wine as for beer."

The French president has stated that he hopes the new tax will raise €480 million to
help in medical services and in care for the aged. Jacqueline Lariven, a spokswoman
for French brewers, says that the estimates are wrong on how much money the tax
hike will bring in, and that the ultimate consequence will simply be higher prices for
consumers in France.  Richard Yung, a socialist legislator in France, insists that the
beer tax increase is intended to bring France in line with the tax rates on beer in
other European nations.  French beer taxes are among the lowest in the 27-state
European Union, he noted, and the scheduled increase would leave them only the
10th highest, lower than in Britain, Spain and the Netherlands.

Two dozen French actors, chefs and writers sent President Hollande a petition
denouncing the beer tax increase as a “morality tax” on one of the few pleasures still
affordable for many people. They asked: “After beer, which other ‘little weakness’ will
have to pay tribute to ‘morality’? Will we surtax chocolate? Encounters? Or, quite
simply, pleasure?”

Huge Beer Tax