Despite the best and combined efforts of brewers, bar-owners, consumers, politicians, citizens and celebrities over the last six weeks, the French Parliament last approved a bill to hike French beer tax by a massive 160% earlier this week. Despite the best efforts of the French Senate, twice sending the law back to the Parliament with a modest amendment – proposing a still substantial 120% tax increase – the law was passed without further modifications.
Following the adoption, Pierre-Olivier Bergeron, Secretary General of The Brewers of Europe, commented: “What makes this even more galling is that beer has been singled out amongst the other alcoholic beverages – despite beer only representing 16% of the French drink market and per capita beer consumption in France already being the second lowest in the EU.” The measure will hit all brewers and all beers, with only a slightly lower increase for some medium-sized breweries. Bergeron said: “One of the few rays of light for the French beer sector during the economic crisis has been the growth in micro-breweries, but these small businesses will also be hit with a 160% hike. And as for any health arguments that have entered the debate, one only has to note that it is the lowest strength alcoholic beverage that is being singled out here and even non-alcoholic beers will be hit by the top rate of 160%.”
The measure will hit not just French brewers but all brewers exporting to France. Bergeron commented: “30% of French beer consumption is imported beer, coming mostly from Belgium, Germany, Netherlands and the UK. Simply put this tax increase destroys the business model of many of these brewers and may indeed lead to a number of brewery closures.”
The hospitality sector has been fighting the measure hand in hand with the brewers throughout the autumn. In total around 65 thousand jobs are generated by beer in France, of which 70% in the hospitality sector – beer representing over a third of the revenues for cafés and brasseries. Referring to the contradictory nature of this supposedly growth-stimulating measure of the French government, Bergeron stated: “The beer market in France is forecast to decline by up to 15% as a result of this measure and jobs in the 35 thousand hospitality establishments in France would be particularly hard hit. With the tax expected to lead to a 25 to 40 cent increase in the price of a small beer, this will further accelerate the existing trend from café to home consumption, which has already contributed to the closure of 12 thousand establishments since 2007.”
The French opposition party has already signalled its intention to refer the case in the coming days to the French Constitutional Court as a potential discriminatory measure between beers on the one side and wine and cider on the other.