E-Malt.com News article: EU: Germany and Czech Republic join forces in battle with European Commission over plans to raise minimum beer duties

The finance ministers of the beer-drinking nations of Germany and the Czech Republic announced on November 03 they would join forces to block the European Commission's plans to raise minimum duties on beer, Reuters communicated November 03.

"The position of the German government is that we will not approve it. We don't want any increase in beer duties. We don't want beer to become more expensive," German Finance Minister Peer Steinbrueck told reporters after a meeting with his Czech counterpart.

"Given that they have such excellent pilsner beer it is perhaps understandable that the Czechs have the same position as Germany," he added.

Last month, the European Union's executive arm proposed a 31 percent increase in the minimum EU duty on beer and spirits to reflect inflation since the tax was last set 14 years ago.

The rise, which needs the unanimous approval of the EU's 25 member states, would add a €0.1 (about 1.3 U.S. cents) to the price of a half liter of beer.

Czech Finance Minister Vlastimil Tlusty said Prague was prepared to veto the alcohol duty rise. He also rejected the argument that the Commission's move was necessary to combat alcoholism across the EU.

"This argument would be true if the proposal had been to raise consumption tax on all alcoholic beverages. But since it doesn't cover wine, this argument doesn't hold up," Tlusty said.

"In fact, I would go so far as to say that the point of this proposal is to give wine a favorable market position and that is precisely what we don't support," he said.

Tlusty said he and Steinbrueck would express their views at next week's regular meeting of EU finance ministers in Brussels.

Czechs are the world's top consumers of beer, drinking nearly 160 liters per person per year. The countries with next highest beer consumption are Ireland and Germany.

Germany, a country of 82.4 million, is also the world's third largest beer producer after the United States and China.

Europe's brewing industry employs 2.6 million people directly or indirectly in 3,000 breweries. Over a third of the breweries are in Germany, where they already face a 3 percentage point rise in value-added sales tax (VAT) from next year.


03 November, 2006