Strasbourg, 27/09/2007 (Agence Europe) - On Tuesday 25 September, the European Parliament approved without amendment the proposal authorising France to extend application of a reduced rate of excise duty on “traditional” rum from the overseas departments until the end of 2012. The measure aims to make up for the lack of competitiveness of traditional rum on the European market. In the three French overseas departments most affected - Réunion, Guadeloupe and Martinique - the sugarcane/rum sector provides some 40,000 jobs (including 22,000 in direct employment).
The proposal, which dates from 27 June this year, aims to authorise France to apply, from 1 January 2007 to 31 December 2012, a reduced rate of excise on traditional rum for an annual quota of 108,000 hectolitres (hl) pure alcohol. The reduced rate cannot be more than 50% lower than the normal national excise rate on alcohol.
The French authorities consider that disappearance of the tax advantage would entail a 50% loss of trade outlets (mainly in metropolitan France) and hence the closure of 75% of the distilleries. The tax regime has allowed 11 distilleries to be maintained in Guadeloupe, 9 in Martinique and 3 in Réunion as well as one distillery in Guyana. Only one distillery stopped all activity over the period 2002-2005.
Margie Sudre (EPP-ED, France), Réunion Regional Councillor, welcomes approval of the text. The competitiveness of traditional rum from the French overseas departments has “worsened since 2001” and support for the sugar cane/rum sector is essential for the economic and social balance of these regions, she states. Ms Sudre goes on to point out that the aid will allow outlets for rum from French overseas departments by resisting competition from ACP producers, to the benefit of local producers who have been anxious to receive an encouraging sign.