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Alcohol Duty Rates: Treatment of different categories and EU law


Some suggest that beer must be treated the same as wine, for tax purposes.


Experience in other Member States shows this is not the case.


One of the alleged barriers to the Government freezing or cutting beer duty has been calls for the “equal” treatment of beer and wine, at Budget time.


This follows an ECJ ruling in 1983 that the UK Duty regime discriminated against wine (a largely imported product) in comparison with beer.


However, more recent and comprehensive ECJ judgements, along with the significantly increased average strength of wine since 1983, mean the UK Government can be confident it can adjust the beer/wine tax ratio without any objection from the European Commission.


Following these judgements, Ireland increased wine duty by 25 per cent whilst freezing beer duty and recently increased wine duty by 41 per cent, whilst increasing the beer duty rate by about half of this. In December 2011 Denmark increased wine by 30 per cent points more than beer. Both countries’ beer/wine duty ratios are now significantly higher than the UK’s.


There are now five EU countries that have significant brewing industries, but no recognised domestic wine industry (similar to Britain), that have duty regimes of this kind. Many other non-wine producing countries tax wine more heavily than they do in beer.


In general, Britain taxes beer at high levels in relation to wine, when compared with other EU countries.