Europe: Smuggling beer down to huge tax differences

28 November, 2008
Smuggling beer across European borders could be down to huge differences in beer tax, according to a new report.

Smuggling beer across European borders could be down to huge differences in beer tax, according to a new report.

Global drinks research company Canadean highlighted massive differences in beer tax throughout Europe.

‘Beer Pricing in Europe – a taxing question’ is an in-depth study of the tax weight on beer, by individual markets and compared to other member states. The report reveals the wide variation in tax burdens across the European Union.

Key findings show that Europe remains divided between high taxation markets in Scandinavia and the UK and low taxation markets in Central and Eastern Europe.

Tax weight on a litre of mainstream beer varies from as low as €0.21 in Bulgaria to as high as €1.59 in Finland.

The report suggests that broad variations lead to wide price differences that encourage consumers and smugglers to cross borders to capitalise cheaper prices.

The report reads: “In the member states affected by high levels of personal imports, there is considerable hardship put on their domestic brewers, reduced tax revenues and the undermining of their public health policy. Not only this, but it is a contradiction of the principle of a single market, a situation underlined by the fact that Swedish and Danish brewers are producing beers to be traded over the border to their own domestic consumers at a lower price.”

16 years ago, the EU declared its intention to ‘harmonise the structure for excise duties on alcoholic beverages and alcohol contained in other products to ensure the internal market.’

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