Brussels, 10/12/2007 (Agence Europe) - On 6 December, the European Commission adopted a proposal authorising Portugal to apply a reduced rate of excise duty on locally produced beer in the autonomous region of Madeira. The beer must be made by independent local brewers, whose total annual production does not exceed 300,000 hectolitres. This derogation will remain in force until 31 December 2013.
Under the terms of the proposal, the reduced rate can only apply to production in excess of 200,000 if it is consumed locally in Madeira. The reduced rate of excise duty, which can be lower than the minimum rate, must not be less than 50% of the standard national excise duty rate for Portugal.
Portugal requested on 30 May 2007 that such a derogation be kept in place. Portugal believes that it is essential if the local brewing industry is to survive. The main causes of the problems facing the industry are its remote location, the number islands and the size of local markets. These problems are further exacerbated by strong competition from beers from other member states. The retail selling price of beer produced in Madeira (€128 per hectolitre) is currently some 7.5% higher than the retail selling price of beer brewed in Portugal and sold on the market in Madeira (€119 per hectolitre). Consequently, if these breweries were to lose the benefits of the reduced rate, the difference in retail sales price would increase by at least 15%, with the retail selling price of beer produced in Madeira rising to €137 per hectolitre. (L.C.)