30/05/2004 00:00
TW
0
Staff Reporter ANTONI Mas, president of the Food and Beverage Association, part of the Confederation of Balearic Businesses (CAEB), gave a warning yesterday of a backlash against taxes on alcohol which both the European Union and the new Socialist government in Spain want to apply.

Mas believes the rise of 24 percent, that the European Union wants to impose on alcohol and alcoholic drinks, and those taxes which the new central government of José Luis Rodríguez Zapatero have in mind, will be a dangerous combination.

He declared that they will seriously affect the food and beverage industries of the Balearics, as it will cause a fall in consumer spending among those tourists who enjoy taking advantage of Spain's lower taxes on alcohol.

Tax on wine
The president drew attention to plans of the European Union to impose a minimal tax on wine of between 0.12 and 0.15 euros per litre, since it is the alcoholic drink most sought after by tourists from North and central Europe. He pointed out that this tax increase will mean that less will now be consumed in establishments (cafés, bars and restaurants) that provide a complementary service to hotels in tourist areas of the islands. This industry is already struggling to keep its prices competitive in the face of competition from the “all-inclusive” holiday package.

Mas, however, was not able to be precise about what economic sway wine consumption holds in Majorcan restaurants, although he did acknowledge that it is a product highly valued by visitors who come to the Island.

He explained that other countries such as Belgium, Denmark and Germany have a very high tax on the price of alcohol and creating a comparison, in his opinion, would deflate the “competitive advantage” of wine producing countries such as France, Italy and indeed, Spain itself which recently rejected the EU measure.

The European Commission, author of freely available information on special taxes which are applied within the European Union member states on alcohol and alcoholic drinks, determines whether or not to bring the duty paid by member states in line with one another. The aim is to combat contraband and fraudulent trading.

In the case of Italy and Spain, the tax would amount to 1.80 and 2.07 euros, while in countries such as Sweden or Finland, more than 14 euros would be applied on the final price of a bottle of alcohol.

With regard to wine, a special minimum tax is currently not demanded. This has resulted in the wine producing countries applying a “zero” tax or a token quantity, such as 0.02 euros on each litre, in the case of France.