EU requests WTO probe into Philippines alcohol tax

29 July, 2009

The EU has requested World Trade Organisation (WTO) consultations with the Philippines following a series of failed attempts to address the country’s discriminatory taxation system for imported spirits.

A statement from the European Spirits Organisation said: “EU spirits producers are unable to compete in the Philippine market due to the high taxes imposed on their products. This is a clear violation of WTO rules and, as a result, the European Spirits Industry strongly supports the EU’s decision to take the matter to the WTO.

"The problem was intensified in 2004 when new legislation was introduced by the Philippine government. The new rules saw excise tax increase by 30% for locally-produced spirits and by 50% for imported spirits. A further implementing regulation was introduced in 2006, extending the discrimination even further. As a consequence EU exports experienced a dramatic fall with their value plummeting by almost €30 million; from €48 million in 2003 to €18 million in 2007."

 Jamie Fortescue, director general of the European Spirits Organisation said: “Our members have been struggling with the situation in the Philippines for some years now.  Depending on the net retail price of the imported product, the tax charged on it can be up to 50 times more than the tax applied to local brands.  

“The industry hopes the situation can be resolved at the first stage of the WTO dispute settlement process and that the Philippine government will take this opportunity to reform their excise tax regime so that it becomes fully non-discriminatory and in line with its WTO obligations.”


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