When the French government announced its intention to increase taxes on certain alcoholic beverages, a heated controversy erupted in the country. Wine producers and alcohol lobbies immediately expressed their displeasure, while some public health experts applauded the move. As the debate continues to rage, it is essential to understand the issues surrounding this question and assess the possible consequences for the soft drinks market.
Alcohol taxes in France: a complex system
The tax system for alcoholic beverages in France is complex and based on several indirect taxes. In addition to the 20% VAT, alcohol and alcoholic beverages are subject to excise duties, which vary depending on the type of product. For example, still wines are taxed at 3.98 euros per hectoliter, while sparkling wines are taxed at 9.85 euros per hectoliter. Excise duties on beer vary depending on its alcohol content and the size of the brewery. As for spirits, they are subject to a higher tax, calculated based on the hectoliter of pure alcohol.
The evolution of alcohol taxes: a controversial measure
According to available information, the government is considering indexing excise duties to inflation from the previous year, instead of inflation from two years ago as is currently the case. This measure aims to ensure that the prices of products subject to the tax evolve at the same pace as everyday consumer products. However, the exact details of this reform are not yet known, which raises many questions and concerns.
Reactions from professionals and the alcohol industry
The announcement of this potential increase in alcohol taxes provoked a strong reaction from industry professionals. Some believe that this measure constitutes a “double penalty” for them, while they are already facing increases in charges, in particular due to the increase in the price of glass. Alcohol lobbies have also expressed concern about the economic impact of this decision on the sector.
The case for increasing alcohol taxes
Proponents of increasing taxes on alcohol put forward several arguments in favor of this measure. First of all, they highlight the importance of funding prevention and care related to excessive alcohol consumption. They also believe that higher taxes could help reduce alcohol consumption, particularly among young people. Finally, some public health experts argue that this measure is necessary to combat the harmful effects of alcohol on society, given the number of deaths and illnesses linked to its consumption.
The consequences for the non-alcoholic drinks market
While taxes on alcohol could increase, it is worth considering whether this could benefit the growth of non-alcoholic drinks. Indeed, the non-alcoholic beverage market is often at a disadvantage compared to that of alcohol in terms of price and social perception. An increase in alcohol taxes could encourage consumers to turn more towards alcohol-free alternatives, thus offering new opportunities for producers of these drinks.
Towards European harmonization of alcohol taxes?
Another aspect to take into account is the question of the harmonization of alcohol taxes within the European Union. Currently, each country has the freedom to set its own tax rates on alcohol, which creates significant disparities between member states. Some countries, such as Spain, apply lower taxes on alcohol, which can lead to distortions of competition. A harmonization of taxes on alcohol could therefore be considered in order to guarantee fair competition between the countries of the European Union.
What to remember?
The increase in taxes on alcohol in France is a controversial subject which provokes strong reactions from industry professionals and alcohol lobbies. As the government seeks to balance the need to fund public health with economic concerns, it is essential to consider the possible consequences of this decision, particularly on the soft drinks market. Whatever the outcome of this debate, it is clear that alcohol will continue to play an important role in our society, but it is also important to promote healthy and responsible alternatives for those who wish to avoid or reduce their alcohol consumption.
The opinion of Sanzalc on alcohol taxes in France
This will surely make people cringe but we are not here to please everyone... at Sanzalc we state loud and clear that the hypocrisy that reigns at government level on the subject of alcohol does not encourage optimism about the real motivations at the top of the State regarding the health of the French.
This TVA mic-mac once again betrays the desire to make arrangements between friends and here we are clearly talking about the collusion at the highest levels of the State of certain decision-makers with the alcohol lobbies.
Beyond that, we can also add that the majority of bar and restaurant owners do not play the game at all with the cost of non-alcoholic drinks.
As a reminder:
- VAT on alcoholic drinks (equal to or greater than 1.2%): 20%
- VAT non-alcoholic drink / open container (equal to or less than 1.2%): 10%
- VAT non-alcoholic drink / closed container (equal to or less than 1.2%): 5.5%
Knowing this, how can we explain that the majority of non-alcoholic drinks are as (or even more) expensive than their alcoholic counterparts if not by saying that the owners are making money off the backs of non-alcoholic consumers or even clearly favoring the choice towards alcoholic drinks!
