Beer tax dispute deepens between Belgium and France

Belgium and France are embroiled in a worsening feud over the price of beer, with brewers incensed at French moves to slap big surcharges on beer excise and the Belgian government hinting at tit-for-tat rises on French wine, writes The Guardian’s Ian Traynor. From giants such as Stella Artois to small traditionalist outfits making beer as it was produced in the Middle Ages, the Belgians lay fair claim to being the master brewers of Europe. There are roughly 180 firms producing about 450 types of beer to a volume of 18m hectolitres a year, with about a third of exports – 3.5m hectolitres – going to France, the biggest foreign market. Parliament in Paris is to vote before Christmas on government proposals to increase excise on beer by 160 percent, a tax the Belgians say is discriminatory and protectionist with a potentially calamitous impact on sales and jobs. "It will weigh heavily on employment, directly and indirectly," said Theo Vervloet, head of the Belgian Brewers Federation. "This price increase will have an impact on investment in the brewing sector, one of the three top investors in the food industry." 

The dispute turned political when Belgian prime minister, Elio Di Rupo, raised the issue with the French president, François Hollande, at the Élysée Palace but was given short shrift. Frictions between Brussels and Paris have grown as a result of Hollande's campaign to raise taxes and cut spending amid signs that French billionaires and celebrities might seek a fiscal haven across the border to avoid a 75 percent tax on the super-rich. After being pressed 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 urged the prime minister to raise the beer excise with the French president and also called on the government to take the dispute to the European commission, arguing that the French move was aimed at shifting alcohol consumption in France away from beer to its mighty domestic wine industry. Di Rupo told Hollande Belgium had increased excise on wine by "only" 12percent, while France was increasing the tax on beer by 160 percent. 

The French say the beer money will raise €480m in revenue to be spent on social services, with ministers contending that the decision has been taken on the grounds of  health concerns and to curb binge-drinking among youth. The Belgians complain that about one-fifth of that revenue 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 percent, from €4 to €5 a glass, French figures point to an increase of only about 25 cents for a standard bottle.