Brussels, 13/06/2001 (Agence Europe) - As previously indicated on Tuesday, the European Commission decided to send a motivated opinion to Sweden calling upon it to put an end to the discrimination hitting wine to the benefit of Swedish beers. According to the European executive, the price of wine on the Swedish market is artificially inflated by a system of taxation taking into account the volume of alcohol and the basic price of the product, two criteria that disqualify wine, whose basic tax free price and alcohol content are higher than beer. This system involves taxation four times higher for wine, when one compares the two drinks with their most common alcohol content on the market. Commissioner Frits Bolkestein, responsible for the Internal Market and Taxation, feels that "imposing higher taxes on wine, that comes for other Member States, compared to beer, mainly produced in Sweden, may be a more subtle way to defend domestic production than import quotas or tariffs, but the effect is the same - illegal protection".
Article 90 of the Treaty bans the Member States from taxing more heavily the products from another Member State than their own national production, a practice considered discriminatory. Moreover, the jurisprudence from the Court of Justice recognises that: 1) beer and wine are competing products, in the rulings concerning the United Kingdom (case 170/78) and Belgium (case 376/85); 2) Article 90 EC extends to discriminations having as effect to reduce the potential consumption of imported products, in the rulings relating to the Benelux (cases 376/93 and 376/99).
In this case, the Commission notes that in Sweden, for wines presenting a alcohol volume of between 8.5 and 15%, the tax is around four times higher than the rate applied to beer with an alcohol content of between 3 and 5%, while it only contains around three time more alcohol. Moreover, this divergence is amplified by the fact that the final price for the consumption of beer and wine includes a 25% VAT rate applied to the net price before tax, raised by an excise duty. Sweden has a two month period to answer the formal warning from the Commission made in the form of a "motivate opinion", the second stage of the infringement procedure foreseen by Article 226 EC.