Polish trade deal depresses EU spirits

- Last updated on GMT

Related tags: Eu, International trade

Poland has agreed to reduce the import duties levied on spirits
imported from the EU - but only up to a limit of 3,000 tons, a mere
fraction of the 20,000 tons exported there each year. The decision
is puzzling, to say the least, given Poland's imminent accession to
the EU.

A deal between the European Union and Poland which will allow the Central European country to set a quota for reduced-tariff spirit imports has been strongly criticised by producers in the west.

With Poland one of the 10 countries in Central and Eastern Europe set to join the EU in 2004, producers had not expected the country to be allowed to set quotas for EU products, but the proposed quota of 3,000 tons of EU spirits should come into force from 1 January 2003.

What is particularly galling for producers from the EU is that the quota set is far below the current levels of trade between Poland the 15 Member States - some 20,000 tons.

The European Confederation of Spirits Producers (CEPS), based in Brussels, said that it was amazed that the EU authorities had agreed to the introduction of a quota so close to Poland's accession to the EU, especially when there is no current limit on alcohol imports, except for vodka, which is the main spirit produced in Poland.

Tariffs are already high on imported spirits - 268 per cent for vodka and between 75 and 104 per cent for other spirits - and although these will be lowered by up to 30 per cent as a result of the new trade deal (except for vodka, which will retain its massive duty level), this reduction will only apply to the 3,000 ton quota. Beyond this limit, drinks will be subject to the existing tariffs.

The Polish vodka industry has been subjected to market forces for the first time in decades in recent years, with the state-owned Polmos distilleries being gradually sold off to major industry players, most of whom, ironically, are based within the EU. But the government is clearly determined to protect its domestic producers for as long as possible before they become subject to EU regulations in just over a year, and when no quotas or excessive duties will be allowed.

The EU spirits industry had been hoping for the duty cut, but limiting it to a small quota is not much of an improvement. The EU authorities were quick to defend the agreement, although the Commission's statement that it was an "improvement for European exporters compared with the status quo and a move towards enlargement where all duties should be removed"​ is likely to ring rather hollowly in the ears of most exporters, to say the least.

Related topics: Markets, Beer, Wine, Spirits, Cider

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