French Brewers Foaming Over 160 Percent Increase In Beer Tax

French beer brewers on Tuesday accused the government of “singling out” beer compared to wine, after President Francois Hollande announced plans to increasing taxes on beer by 160 percent to help fund struggling social programs.

French beer brewers on Tuesday accused the government of “singling out” beer compared to wine, after President Francois Hollande announced plans to increasing taxes on beer by 160 percent to help fund struggling social programs.

According to French brewer’s federation Brasseurs de France spokeswoman Jacqueline Lariven in an interview with the Associated Press, the new tax is likely to affect all local and imported brews; and will raise the price of beer by about 20 percent in bars and supermarkets.

Pierre-Olivier Bergeron, head of the Brewers of Europe trade group, added that the move was a “kick in the teeth” for brewers across Europe, especially since beer production and consumption had fallen by 6 and 8 percent respectively, in the aftermath of the economic crisis.

[quote]”Immediately, it obviously becomes a very big issue for the brewing sector,” said Bergeron, while expressing fears that other EU nations may begin implementing similar regulations. [/quote]

The French government, on its part, claims that some 480 million euros in additional revenue can be raised from the increase in beer taxation – boosting social benefits such as medical insurance and elderly care in the process.

But Bergeron questioned why Hollande would be reluctant to raise the tax on wine as well, given that wine accounted for a far larger proportion of the nation’s alcoholic consumption (62 percent).

Outside of France, Belgian and German brewers will be the worst affected by the new legislation once they kick in. 30 percent of all beer sold in France are imported from neighbouring countries, while France’s own local industry is primarily based in Alsace, hugging Germany and French Flanders, which borders Belgium.

[quote]”This measure will affect all brewers, including small entrepreneurs…this is a very short-sighted approach by penalising one sector,” Bergeron said.[/quote]

Recently, the French government has also come under heavy criticism from business leaders for imposing tax hikes in order to fulfil social pledges made by Hollande during his campaign.

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In August, France’s national auditor, the Cour des Comptes, told the president that he would need “unprecedented” savings of about 33 billion euros in order to meet budget targets for next year.