Tags: france | belgium | beer | taxes

France, Belgium Beer Battle Brewing to a Head

Wednesday, 05 Dec 2012 10:34 AM

By Bill Hoffmann

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A bitter dispute between France and Belgium over the price of a pint of beer is coming to a head, with the French parliament set to vote this month on whether to increase a tariff on imported beer by a whopping 160 percent — a threat that has infuriated Belgians, who produce 450 different types of beer.

Belgium says the tax is discriminatory and could potentially dampen sales and force pubs and restaurants to lay off workers.

So Belgium government officials are now hinting they’ll retaliate by slapping a sizeable excise tax on the price of imported French wine — a move that could devastate winemakers throughout France.

"The most remarkable aspect is the discriminatory, protectionist nature of this decision," the Belgian Brewers' Federation told London’s Guardian newspaper. "By contrast, there is almost no excise on wine and no increase is planned."

France’s bid to raise taxes on imported Belgium beer comes as President François Hollande accelerates his campaign to raise taxes.

Officials say the 160 percent increase would raise an estimated $627 million, which would be earmarked for the nation’s social services. The hike would also help reduce the country’s alcohol and tobacco use by young people, they say.

The French brewer’s federation — Brasseurs de France — said the tax hike would increase the price of beer on brands like Stella Artois and Hoegaarden by about 20 percent in bars and supermarkets.

The increase would also affect the rest of Europe, although Belgium is the first nation to hint at a possible retaliation.

“It obviously becomes a very big issue for the brewing sector. The measure will affect all brewers, including small entrepreneurs. This is a very short-sighted approach by penalizing one sector,’’ Pierre-Olivier Bergeron, head of the Brewers of Europe told TheDrinksBusiness.com.

Belgians say the tax hike will hike beer prices in France from about $5.25 a pint to $6.50 a pint, although the French insist it would be lower.

Even if an increase is passed, France’s beer tax would still be about one-fourth of what the United Kingdom levies.

French drinkers seem resigned to a tax increase.

“It will just be a few euros here and there, you won’t notice really, even if you drink too much!’’ Lea Rouge of Paris told BBC News. “I still don’t agree with the policy though. It is yet another regulation that we don’t need.”

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