EU proposes new alcohol duties

Potentially divisive proposals to increase the minimum duty on alcoholic drinks have been unveiled by the European commission.

The current duty rates were set in 1992 and have not been increased since.

The commission fears the rates will become “meaningless” unless they are adjusted to take account of inflation.

Friday’s proposals would see the basic duty rates increase by the rate of inflation between 1993 and 2005 from January 1 2008.

Although member states have asked the commission to come forward with plans for increasing basic duty rates, national governments do not always see eye to eye on the issue.

While minimum rates are set at the EU level, national governments have the right to increase duty rates, which many do on the grounds of public health.

Scandinavian countries in particular have high rates, mainly on public health grounds, but this has led to an increase in cross-border bulk buying of alcohol in countries such as Estonia or Germany that have lower rates.

The commission has insisted its latest plans should not provide cause for concern because most member states already exceed the proposed minimum rates.

Official say any member states who experience difficulties in increasing their national rates will benefit from plans for transition periods that last up to 2010.

But wine-producing EU countries that have traditionally had very low duty rates for wine – zero in many cases – are set to respond negatively to the rise.

In the past countries like France and Spain have strongly resisted efforts to increase the basic duty rates amid fears that it would harm consumption.

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