Dispute over beer tax deepens as Belgium accuses France of protectionism

The price of a pint is causing a spat between Belgium and France to worsen, with Belgian brewers furious at French moves to slap big surcharges on beer excise. In retaliation, the Belgian government has hinted it will raise import duty on French wine.

Belgians lay claim to being the master brewers of Europe. Including the likes of corporate giants Stella Artois and independent outfits that produce beer as it was done in the Middle Ages, there are about 180 companies producing about 450 types of beer. That’s 18m hectolitres a year, with about a third of exports – 3.5m hectolitres – going to France, the biggest foreign market.

Tax increase

In the run up to Christmas, the French parliament is set to vote on government proposals to increase excise on beer by 160 per cent. The Belgians say the tax is discriminatory and protectionist, and is likely to have a devastating impact on sales and jobs.

Theo Vervloet, head of the Belgian Brewers Federation, said: “It will weigh heavily on employment, directly and indirectly, this price increase will have an impact on investment in the brewing sector, one of the three top investors in the food industry.”

Bad feeling has been growing between Brussels and Paris as a result of Hollande’s campaign to raise taxes and cut spending. It is feared that the French super-rich might flee across the border to Belgium to avoid a 75 per cent tax.

After being questioned on the beer tax by the Belgian leader, Hollande said: “We are just as attentive to all the fiscal rules which may apply in Belgium.”

The Belgian upper house, or senate, has insisted Belgian Prime Minister Elio Di Rupo push the issue with the French president. It has also called on the government to take the dispute to the European commission. It believes the aim of the French is to manipulate domestic consumers away from beer and towards its colossal wine industry.

Binge drinking

Di Rupo told Hollande Belgium had increased excise on wine by “only” 12 per cent, while France was increasing the tax on beer by 160 per cent. Hollande says the increased revenue from beer will raise €480m which will be spent on social services. Ministers also say that the decision has been taken to curb binge drinking in the young and to improve public health. The Belgians complain that about a fifth of that revenue to do that will accrue from their beer.

“The most remarkable aspect is the discriminatory, protectionist nature of this decision,” said the Belgian Brewers’ Federation. “By contrast, there is almost no excise on wine and no increase is planned.”

The French increase keeps excise on beer low, at about a quarter of that levied in Britain. While the Belgians argue that the price of a beer in France will rise by 20 per cent, from €4 to €5 a glass, French figures point to an increase of only about 25 cents for a standard bottle.