France To Slam Brewers With 160% Rise in Beer Tax

The French president, François Hollande, who defeated the incumbent Nicolas Sarkozy in the spring of this year, is attempting to impose an increase of 160% in beer taxes to help fund social programs.

France, along with Italy, Spain, Greece, Portugal, and many other European countries, are scrambling to control huge budget shortfalls from the economic crisis that continues to engulf the globe.

Hollande, who previously served as the First Secretary of the French Socialist Party from 1997 to 2008, said the policy would raise 480m euros to invest in social projects for young people and the elderly, and ministers say the move will help reduce alcohol and tobacco consumption.

Jacqueline Lariven, spokeswoman for the French brewer’s federation, Brasseurs de France, said the tax increase will push up the price of a beer by about 20% in bars and supermarkets, and will affect local brews and the 30% of imported beer the French drink.

The Brewers of Europe trade group described the measure as a “kick in the teeth”, as it follows a 6% fall in beer production and an 8% drop in consumption in the EU since the region’s debt crisis began in 2008.

Outside France, Belgium and Germany were likely to be hardest hit by the new legislation, said Pierre-Olivier Bergeron, head of the Brewers of Europe.

“This measure will affect all brewers, including small entrepreneurs,” he said. “This is a very shortsighted approach by penalizing one sector.”

Trade groups are understandably angered considering the 8% drop in consumption in the EU since the debt crisis began in 2008, and have argued that the rise could damage the beer industry in France and affect breweries across Europe.

At The Bowler, a British-themed pub in Paris, Richard Wilson, who works in the beer industry, told the BBC:

“The industry is already having problems. People are drinking at home more and the bar sector in France is diminishing quite considerably at the moment, so it’s going to affect us quite badly I think.”

The Bowler’s barman, Paul Plowman, said he believed that more bars and pubs could be forced to close if the new legislation was passed.

“I was working in England when taxes went up there at the height of the recession and you were hearing something stupid like 50 pubs a week being shut,” he said. “I do think this is a step towards something similar here.”

He has been in Paris for two months and says he finds it more expensive than many other European cities.

“If the price of beer goes up even more, I think people will think twice about coming here for a mini-break.”

Simon Spillane, a senior adviser for the Brewers of Europe organisation, says the added cost to a half-litre will be more like 30 euro cents, and comes at a tough time for brewers.

“This is a real blow for the beer industry,” he says. “Beer represents 10% of UK food and drink exports so it’s clearly a key to economic recovery there,” Spillane said.

The BBC notes the higher tax rate was agreed by France’s National Assembly but it stills need final approval from the country’s second chamber, the Senate, which is expected to vote on the policy soon.

But since the second chamber is made up of a majority of Socialist politicians who support President Hollande, any opposition is doubtful.

Thus far, increased taxes are unlikely to be extended to wine, the country’s signature beverage.