10. 9. 90 Official Journal of the European Communities No C 225/51 
Opinion on the amended proposal for a Council Directive on the approximation of the rates of 
excise duty on alcoholic beverages and on the alcohol contained in other products (*) 
(90/C 225/18) 
On 22 January 1990 the Council decided to consult the Economic and Social Committee, under 
Article 198 of the Treaty establishing the European Economic Community, on the abovementioned 
proposal. 
The Section for Economic, Financial and Monetary Questions, which was responsible for 
preparing the Committee's work on the subject, adopted is opinion on 21 June 1990. (Rapporteur: 
Mr Delia Croce). 
At its 278th plenary session (meeting of 5 July 1990) the Economic and Social Committee adopted 
the following opinion by a large majority, with six dissenting votes and three abstentions. 
1. The Commission proposal 1.5. The proposed rates are as follows: 
1.1. The Commission has made significant changes to 
its draft Directive of 21 August 1987 [doc. COM(87) 328 
final], which prescribed Community-wide rates of excise 
duty for all products. 
1.2. In the explanatory memorandum to its new 
proposal, the Commission admits that its original 
approach to harmonization was too rigid and it therefore 
introduces flexibility. 
1.3. However, the Commission stresses that this more 
flexible approach must on no account jeopardize the 
fundamental principle involved, i.e. abolition of customs 
and tax frontiers so as to avoid creating excessive 
distortions of competition, diversions in the flow of trade 
and loss of revenue. 
1.4. The mainstay of the proposal is the fixing of 
minimum rates for all product categories as of 1 January 
1993. It also sets higher 'target' rates which Member States 
are expected to move towards after 1 January 1993. 
Subsequent amendments to rates will only be authorized if 
they are conducive to the process of convergence on the 
target rates. 
Ar two-yearly intervals, the Council will review both 
minimum and target rates and make the necessary 
adjustments. Beer 
Still wine 
Sparkling wine 
Potable alcohol 
Intermediate products Minimum 
rate 
ECU 0,748 
per hl-degree 
Plato 
9,35 hi 
16,5 hi 
1 118,5 hi 
74,8 hi Target 
rate 
1,496 
18,7 
33 
1 398,1 
93,5 Previously 
proposed 
rate 
1,32 
17 
30 
1271 
85 
1.6. The Commission has dropped its proposal to 
impose excise duties on alcohol contained in perfume and 
cosmetics (in 1987 it had proposed an excise duty of 
ECU 424 per hi). 
2. General comments 
2.1. The Committee opinion on the original Commis­
sion proposal (CES 746/88) (2) remains valid, subject to the 
comments made in this opinion. 
2.2. In particular it is worth remembering that the 
Committee found the Commission's proposal to set 
common rates too rigid, and advocated some degree of 
flexibility. 
(!) OJ No C 12, 18. 1. 1990, p. 12. (2) OJ No C 237, 12. 9. 1988, p. 36. 
No C 225/52 Official Journal of the European Communities 10. 9. 90 
More precisely, the Committee put the case for allowing a 
limited number of disparities to continue within a narrow 
band of rates. It also accepted the possibility of introducing 
a system of provisions and derogations which would allow 
rates to be standardized after 31 December 1992, provided 
the process of convergence was unquestionably under way. 
2.3. Now, however, the Commission is proposing so 
much flexibility that it could defeat the purpose of the 
whole exercise, which is to standardize excise duties so as 
to ensure that they have a neutral effect on the movement of 
goods. 
2.4. The introduction of a compulsory minimum rate is 
obviously a step in the right direction, but rates will 
continue to vary enormously given the heavy excise duties 
imposed on alcoholic beverages and alcohol products in 
some Member States. 
It should however be remembered that the aim of 
standardization is to: 
— abolish tax frontiers, 
— avoid significant distortions in competition, 
— prevent fraud and tax evasion. 
There must be a real link between the proposals and these 
objectives. 
2.5. The differences between the minimum rates 
proposed by the Commission and the highest rate currently 
applied in the Member States are as follows: 
Beer 
Still wine 
Sparkling wine 
Potable alcohol 
Intermediate products 1-13,17 
1 - 27,42 
1-31 
1-2,23 
1-4,97 Irl 
Irl 
Irl 
Irl 
Irl 
Although the highest rates are levied in Ireland, there are 
substantial differences between the proposed minimum 
levels and the rates applied in other Member States. 
These disparities would have a drastic effect on consumer 
prices, particularly for beer, wine and sparkling wine. 
2.6. Maximum rates will also have to be set if we are to 
achieve harmonization. Maximum and minimum rates will 
have to be as close as possible. Moreover, if minimum limits only were imposed, this could 
lead to higher average limits, thereby increasing revenue 
and making the ultimate abolition of excise duties an even 
remoter prospect. The Committee's comments on the 
Commission's general communication also apply here 
(CES 831/90). 
2.7. Member States should recognize the need to reduce 
VAT for competition reasons, the sole obstacle here being 
the impact on budget revenue. But there are additional 
complications in the case of excise duties, such as differing 
traditions and the desire to curb consumption of various 
products. 
2.8. The target rates now recommended by the Commis­
sion are about 10 % higher than the standard rates 
envisaged in its previous proposal. 
The Commission claims that this increase is justified on 
health grounds. It seems strange that the Commission did 
not take health considerations into account in its initial 
proposal, and in any case there is nothing to indicate that a 
difference of 10 % will be enough to influence consumer 
trends. 
In the case of wine, for example, the Commission argues 
that the increase of ECU 0,17 per litre will have a 
significant effect on alcohol abuse. 
However, the health issues should be dealt with quite 
differently and more carefully. 
2.9. Alcohol abuse is still a major problem in our society 
and adequate resources must be deployed to combat it. 
Alcohol is normally consumed in moderate quantities as 
part of the everyday diet, and thus gives no cause for 
concern. 
However, excessive consumption can result in alcohol 
abuse, with health and pathological effects. This is a 
problem which must be tackled in full knowledge of the 
fact, rather than in response to preconceived ideas. 
2.10. Rigorous statistical surveys on consumer trends, 
the development of disease, the social classes concerned 
and the environments in which alcohol abuse is particularly 
common, should therefore be carried out and acted on. 
At present it is impossible for the Committee to discuss 
these issues in any detail. 
2.11. It will therefore confine itself to a few, inevitably 
general, remarks. 
10. 9. 90 Official Journal of the European Communities No C 225/53 
Consumption of wine is decreasing in countries where it is 
not taxed and increasing in countries where heavy excise 
duties are imposed. 
Consumption of high quality, expensive wines is increas­
ing, whereas consumption of low and medium quality, i.e. 
cheaper, wines is declining. 
2.12. In the of liqueurs, i.e. beverages with a high 
alcohol content, consumer trends again bear no relation to 
prices and taxes. In fact demand for the expensive products 
is increasing significantly, while the market for the cheaper 
ones is contracting, regardless of long-standing social 
customs. 
2.13. Generally speaking, consumption of non-alco­
holic beverages is steadily increasing, even though they are 
disproportionately expensive considering the ingredients 
used. 
2.14. Thus it can be seen that prices have little impact on 
overall consumer trends, and none whatsoever on alcohol 
abuse. Other means, in addition to fiscal ones, must 
therefore play a leading role in action to combat 
alcoholism. 
3. Specific comments on each product 
3.1. Beer. The minimum rate proposed by the Commis­
sion is significantly lower than the standard rate proposed 
in 1987, whilst the target rate, as with other products, has 
increased by over 10 %. 
The Commission admittedly sets a low figure for the 
minimum rate, but it would seem reasonable to propose 
that excise duty on beer be phased out altogether as soon as 
possible. 
It also has to be recognized that there are certain parallels 
between beer and wine consumption, although competi­
tion and substitution between the two products are 
probably not a problem. 
3.2. Still wine. This should not be subject to excise duty 
as it is an item of everyday consumption. 
It is worth remembering that in five Member States wine is 
not taxed at all, and in France taxes are negligible (for 
reasons which are not revenue-related). Thus at the present 
time about 90 % of all wine consumed in the Community is 
not liable to excise duty. 
The minimum rate of excise duty proposed for wine 
(ECU 9,35 per hi) would not even cover the administrative costs — evasion would be easy and widespread in countries 
which do not at present charge excise duty, making it 
harder to collect VAT dues as well. 
3.3. Sparkling wine. The Commission is proposing a 
much higher rate of duty for sparkling wine than for still 
wine because, it claims, sparkling wine is generally more 
expensive than still wine and represents a different segment 
of the market. There is no justification whatsoever for this. 
Sparkling wine almost always has a lower alcohol content 
and costs no more than good quality still wine. The only 
real difference is the presence of carbon dioxide. From an 
economic point of view, the value-added of sparkling wine 
is higher (labour and technology). 
3.4. Potable alcohol. The Commission advocates a very 
high rate of duty on potable alcohol. The obligatory 
minimum rate is to be 80 % of the target rate (as against 
50 % for other products). This is unacceptable: liqueurs 
would be beyond the means of consumers in many 
countries, and the traditionally less expensive products 
(such as brandy) would be priced right out of the market. 
The Commission proposals are lacking in logic in that they 
do nothing to address present problems in the market 
arising from differences in taxation. They require funda­
mental revision as far as potable alcohol is concerned. 
3.4.1. It would be ill-advised to charge excise duty on 
solid foods which contain alcohol (chocolates, sweets, 
mustard, etc.). They do not pose any health risks and 
making them dutiable would only have a harmful effect on 
competition. 
It should also be remembered that these products are 
currently duty-free in three Member States. 
3.5. Intermediate products. Once again, the Commis­
sion is proposing particularly heavy excise duties, with the 
minimum rate fixed at 80 % of the target rate. Intermediate 
products deserve special attention, and all the comments 
made in the previous Committee opinion apply here. The 
definition of intermediate products also needs to be 
sufficiently precise and narrow. 
Beverages with a moderate alcohol content (certain 
aperitifs in particular) should also be given favourable 
rates. 
No C 225/54 Official Journal of the European Communities 10. 9. 90 
4. Conclusions 
4.1. The proposals to merely fix minimum rates and 
recommend target rates, without any obligation to 
converge, are not commensurate with the aim of harmoniz­
ation. 
4.2. All the points raised in the previous Committee 
opinion (CES 746/88) hold true for this opinion. 
4.3. Rules on customs warehouses, methods of collect­
ing taxes, transport, monitoring and prevention of fraud 
and tax evasion are extremely important. It is very difficult 
to make a detailed assessment of the proposal without 
knowing the Commission's views on these questions. 
1. Commission proposal 
1.1. The Commission's August 1987 proposal on 
mineral oils is also being made more flexible. 
1.2. By analogy with its proposals for other products on 
which excise duty is levied, the Commission is proposing to 
lay down only a minimum rate, to be applied from 1 
January 1993 onwards, for petrol (leaded and unleaded), 
LPG, methane and kerosene used as engine fuel. 
1.3. On the other hand, bands of rates (with maxima 
and minima) are proposed for diesel, heating gas oil and 
heavy fuel oil. 
1.4. The reason given by the Commission for this 
different treatment is that it is necessary to distinguish 
between products which are essentially destined for final 
private consumption and those whose consumption is 
mainly commercial. 4.4. The explanatory memorandum is inadequate, 
particularly as it fails to consider the implications fo 
Member State budgets, consumption and inflation. 
Done at Brussels, 5 July 1990. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
1.5. The proposed minimum rates are as follows: 
— Leaded petrol: ECU 337 per 1 000 litres 
— Unleaded petrol: ECU 287 per 1 000 litres 
— LPG and methane: ECU 84,5 per 1 000 litres 
— Kerosene (propellant): ECU 337 per 1 000 litres. 
1.6. The proposed bands of rates are as follows: 
— Diesel: ECU 195 to 205 per 1 000 litres 
— Heating gas oil: ECU 47 to 53 per 1 000 litres 
— Heavy fuel oil: ECU 16 to 18 per 1 000 kg 
— Kerosene used as fuel for other purposes: ECU 47 to 53 
per 1 000 litres. 
1.7. The Commission is deferring its proposal on the 
benchmark values on which all rates will have to be 
aligned. 
2. Comments Opinion on the amended proposal for a Council Directive on the approximation of the rates of 
excise duty on mineral oils 0) 
(90/C 225/19) 
On 22 January 1990, the Council decided to consult the Economic and Social Committee, under 
Article 198 of the Treaty establishing the European Economic Community, on the abovementioned 
proposal. 
The Section for Economic, Financial and Monetary Questions, which was responsible for 
preparing the Committee's work on the subject, adopted its opinion on 21 June 1990. The 
rapporteur was Mr Delia Croce. 
At its 278th plenary session (meeting of 5 July 1990) the Economic and Social Committee adopted 
the following opinion by a large majority, with seven votes against and two abstentions. 
(!) OJ No C 16, 23. 1. 1990, p. 10. 2.1. The comments on the previous proposal made in 
Committee opinion CES 745/88 (rapporteur: Mr Broicher)