Swedish court victory fails to shift drink tax concerns, says V&S

By Neil Merrett

- Last updated on GMT

Related tags: European union, Sweden

Last week's ruling in favour of Sweden's alcohol taxation policy by
the European Court of Justice, will fail to address key industry
concerns over excise rates, according to a leading alcoholic drink
maker in the country.

The European Union had taken Sweden to court over allegations that its policy for taxing alcoholic products offered indirect protection to beer by leveraging higher taxes on wines, mainly imported from other countries. In its ruling, the court said that it found insufficient evidence that pricing would have any major impact on consumption, and therefore did not contravene trade laws. Tax fears​ Although, the court ruled in favour of the Swedish authorities, Vin & Sprit (V&S) spokesperson Peeter Luksep told BeverageDaily.com that the judgement would have minimal impact on the industry compared to resolving the issue of varying excise rates between neighbouring Northern EU countries. "The Swedish Government had already adjusted the excise tax rates for wine and beer so that alcohol is taxed at the same rate regardless of if it comes in the form of beer or wine,"​ he stated. "Before that adjustment, differences were of relatively limited importance.​ By comparison, Luksep said that V&S was extremely concerned about the different levels of tax put on its products within different markets of Northern Europe. He claimed that this had created a significant problem with cross border shopping for alcohol in the region, which was distorting trade in the individual countries. "It leads not only to legal private cross-border shopping but also to grey-zone and outright illegal operations, which are harmful for all serious businesses,"​ Luksep stated. "In comparison to the cross-border problem, differences between domestic rates for wine and beer are of marginal importance."​ While these concerns were mainly targeted towards spirits manufacturers, there were also fears for beer and wine makers operating in Northern Europe, V&S said. EC reaction ​ Despite the industry claims, the EC said it remained disappointed by the court's decision that its claims of a shift in wine consumption following duty changes imposed by Sweden in 1997 and 2001 was inconclusive. It claimed during the initial filing of the case that the tax was a clear attempt to provide undue protection to beer, which was produced domestically at much higher levels than wine. The verdict in not available for appeal, the EC said. V&S ​The government owned company is a major player in Swedish wine production, and was until last month, the owner of the Absolut premium spirit brand, before agreeing to sell it for €5.2bn to rival Pernod Ricard.

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