Belgian brewers protest against hike in excise
This is what France’s President Francois Hollande means by squeezing the rich. In his EUR 7 billion tax rise for the well-off and for firms he did not spare the brewers. On 1 October 2012 the French Government unveiled plans to hike beer excise by a staggering 160 percent. This would hit foreign-owned brewers most, as 90 percent of the beer market is controlled by AB-InBev, Heineken and Carlsberg. Beer production in France stood at 17 million hl in 2011.
However, excise duty on wine will remain unchanged as the French Government is obviously in awe of the country’s powerful and often cantankerous agricultural lobby.
The French Parliament will vote on this proposal on 20 December 2012. According to estimates, this measure alone is expected to flush EUR 480 million into the French Treasury’s coffers.
As could be expected, Belgian brewers cried murder most foul.
At present, the excise regime on beer is EUR 2.75 per hl and per degree alcohol. The Belgian Brewers’ Association says that for an ordinary lager (5% ABV) the excise hike translates into a duty of EUR 36 per hl instead of the current EUR 14 per hl.
In its letter of protest to the French Government of 4 October 2012, the Belgian Brewers’ Association pointed out that in 2010 almost 60 percent of all beer produced in Belgium was exported. Of those 10.6 million hl of beer sold abroad, 3.5 million hl were shipped to France. That equals 30 percent of Belgian beer exports.
In terms of turnover, exports to France represented more than EUR 360 million in revenues out of a total of EUR 1.8 billion in 2010.
In terms of direct employment, exports to France provided for about 1,000 jobs in Belgium alone. Many of these could be at risk, as well as many more both upstream (raw materials, energy, etc.) and downstream (transport, storage, etc).
AB-InBev would be affected most as one in four bottles of its beer brewed in Belgium is sold across the border in France. But not only the big brewers will be hit – many small Belgian brewers have increased their business in France in recent years.
What is more, most Belgian beers sent to France (over 60 percent) are high-alcohol beers with 6.4 or more percent ABV. Belgian brewers reckon that the excise increase will cost them about EUR 100 million more.
Apart from this, they fear that such a phenomenal tax increase in France will have incalculable, albeit thoroughly negative consequences for Belgian beer production and exports.
What irks them is that Belgium imports a lot of French wines. The market share of French wines in Belgium is 58 percent and has risen to 30 litres per capita from 25 litres over the past decade, compared to beer consumption which has dropped to 78 litres per capita. Moreover, Belgium is one of the major destinations for French champagnes.
The Belgian Brewers’ Association says that the discrimination between wine and other alcoholic beverages in France is not acceptable to them. Therefore, they have appealed to the Belgian Government to make every effort to stop the French Government from implementing such a protectionist measure.
