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Wednesday, March 20, 2013

Is reducing the tax on beer but not wine legal under EU law?

Cheaper beer but is it legal?
Delivering the budget today Chancellor George Osborne announced the reduction in beer duty by 1p per pint. However he did not do the same for wine. We have been wondering if the Treasury has cleared this with their lawyers as this could potentially infringe EU law - a point raised by Geoffrey Clifton-Brown MP in the debate. Hopefully it is legal but we thought we might remind them of an old case.

Under EU law you can not discriminate against another state's products. As the UK does not produce (much) wine the EU could argue that this breaks EU law. They have done it once before.

In the  1983 case "European Communities v United Kingdom of Great Britain and Northern Ireland. - Tax arrangements applying to wine. - Case 170/78." The Court found that:
ON THOSE GROUNDS ,
THE COURT
HEREBY :
1 . DECLARES THAT , BY LEVYING EXCISE DUTY ON STILL LIGHT WINES MADE FROM FRESH GRAPES AT A HIGHER RATE , IN RELATIVE TERMS , THAN ON BEER , THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER THE SECOND PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY .
Before people get their spirits up (pun intended) we just hope the Treasury's lawyers were consulted.... And if it is legal then there is nothing stopping France putting up its tax on beer...

7 comments:

Anonymous said...

sounds fair if the French do put a tax on beer - it's not as if the UK exports much there.

OF course they'll probably block the tunnel and burn a few lorry loads of Lamb too.

Monima O'Connor said...

Hat tip Gentlemen. Let's watch and wait.

Anonymous said...

A beer tax was passed in France last year, to fund social security. http://alsace.france3.fr/2012/12/04/vote-de-la-taxe-sur-la-biere-consternation-des-brasseurs-157717.html

ukgoldbug said...

Why do we care? The EU ignores laws whenever it feels like. Like the one against bailing out member states and is trying to steal money from Cyprus bank accounts as I write this.
If it's against EU law then all the more reason to do it.

christina speight said...

Don't forget Cider which in the budget gets no relief along with wines and spirits. Cider is 100% British sourced from British farms and in the largest cider-making county - Herefordshire - is a major part of farm income. Indeed the acreage of orchards of cider apples amazes visitors especially at blossom time. (Other counties often use culinary apples and produce a bland uninteresting product.

Cider is almost entirely fermented apple-juice (no imported hops etc) and does wonders for the balance of payments!

Anonymous said...

This is a great example of EU interference in a sovereign state's own affairs. I cannot imagine who would put up with such interference.

Besides, I hear that the French government are ringing around Paris-based French banks and telling them not to trade with English bankers. If true, which I am sure this is, then this is an outrage and against every EU rule surely?

Who is going to look into this? Nobody.

Anonymous said...

ukgoldbug

I whole heartedly agree with you. If it is an EU rule then it is there to be broken.

The EU makes no rules for me. I refuse to acknowledge any organisation that willfully denies me my right to vote.

Down with the EU.