On Wednesday 24 June, Member States’ ambassadors to the EU (Coreper) are expected to confirm their agreement on the proposal for a directive amending directive 92/83/EEC, which harmonises the structures of excise duties on alcohol and alcoholic beverages.
The aim of the directive, which was presented in May 2018, is to update the rules governing excise duties on alcohol in the EU and reduce costs for small alcohol-producing businesses. It also establishes a uniform certification system for confirming the status of small independent producers that will be recognised in all EU countries.
Negotiations have been difficult and brought a range of vested interests to light. Initially, the proposal was hijacked for a lengthy period by Romania during its Presidency of the Council of the EU; Romania wanted an exemption for its ‘home-made’ alcohol (see EUROPE 12257/1).
However, against all expectations, it was not Romania, but Bulgaria and the Czech Republic that were responsible for the directive’s failure at the Ecofin Council in November 2019 (see EUROPE 12366/2).
Provisions on ‘home-made’ fruit spirits
The final issue to be resolved involved the annual quantity limit that needed to be set before an exemption from excise duty could be issued or reduced rates of excise duty could be applied for ethyl alcohol distilled from fruit by private individuals for personal use.
The latest compromise proposal, dated 19 June, a copy of which has been provided to EUROPE, reverts to the solution proposed by Romania, i.e. a maximum limit of 50 litres of alcohol per year.
The proposal grants Bulgaria, the Czech Republic and Poland special dispensation to apply a reduced rate of excise duty - which must not be less than 50% of the standard national excise duty rate on ethyl alcohol - to ethyl alcohol produced by fruit producers who produce more than 10 hectolitres of alcohol per year.
Application of the reduced rate in these three countries is limited to 30 litres of alcohol per fruit-producing household per year, all of which must be intended for personal consumption.
Provisions on wine
The proposals also includes provision for Member States not to apply reduced rates of excise duty to wine produced by small independent producers who produce an average of more than 1,000 hectolitres.
Malta has been granted special dispensations, as the proposal stipulates that the island may not apply reduced rates of excise duty to wine produced by small independent producers who produce an average of more than 20,000 hectolitres of wine per year.
In a statement attached to the text, the Commission expresses its disagreement with the introduction of an increased wine threshold for Malta because of the possible risks of market distortion and the difficulty in justifying a figure of this size, given that the average annual EU wine production for each operation is 70 hectolitres.
The proposal also makes provision for the possibility of applying an optional alternative method for fixing the excise duty on wine, other fermented beverages and intermediate products, by reference to the number of hectolitres/degrees, with the alcoholic strength of the finished product taken into account (see EUROPE 12211/15).
This provision also worries the Commission, which says in a statement attached to the text that it will analyse the impact of this alternative method as part of the first review of the directive.
Provisions on beer
The proposal also raises the alcoholic strength by volume (ASV) of low-alcohol beer that is eligible for reduced rates, from 2.8% to 3.5%, in order to encourage brewers to create new low-alcohol products.
The directive also aims to standardise the conditions for setting excise duties on beer. The proposal stipulates that all beer ingredients, including those added after fermentation, will be taken into account when the beer’s ‘Plato gravity’ is measured.
Some Member States that do not currently use this method objected to the proposal and so the compromise text makes provision for a transitional period during which Member States that do not take beer ingredients added after fermentation into account when measuring the ‘Plato gravity’ to continue with their current practice until 31 December 2030.
According to the compromise text, Member States will have until 31 December 2021 to transpose the directive into national law. (Original version in French by Marion Fontana)