Proposal for a Council Decision authorising Portugal to apply a reduced rate of excise duty in the autonomous region of Madeira on locally produced and consumed rum and liqueurs and in the autonomous region of the Azores on locally produced and consumed liqueurs and eaux-de-vie
Date: 2001-07-27
Institutions: European Commission
Subjects: Azores, Madeira, Portugal, consumption, excise duty, liqueur, production, spirits

C 304 E/210

EN

Official Journal of the European Communities

30.10.2001

Proposal for a Council Decision authorising Portugal to apply a reduced rate of excise duty in the
autonomous region of Madeira on locally produced and consumed rum and liqueurs and in the
autonomous region of the Azores on locally produced and consumed liqueurs and eaux-de-vie

(2001/C 304 E/13)

COM(2001) 442 final (cid:151) 2001/0169(CNS)

(Submitted by the Commission on 27 July 2001)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 299(2) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas:

firms

(small

limited

producing

and eaux-de-vie, was

fragmented terrain and tight

(1) In its requests dated 15 June 2000 and 28 February 2001
concerning the measures to implement Article 299(2) of
the EC Treaty relating to the outermost regions, Portugal
stated that the application of a reduced rate of excise duty
in Madeira, on locally produced and consumed rums and
liqueurs, and in the Azores, on locally produced and
consumed liqueurs
considered
essential for the survival of the local industry producing
and marketing the beverages in question. Given the high
cost of those activities arising mainly from geographical
quantities,
factors
local markets)
remoteness,
only a reduction of the tax on rum,
liqueurs and eaux-
de-vie produced on the islands and sold almost exclusively
on their local markets can enable the products to continue
competing against similar spirits imported or supplied from
other parts of the Community and thus ensure the survival
the industry. To redress the competitive balance, a
of
the tax should therefore be introduced to
reduction of
help offset
the competitive disadvantage which spirits
produced in the autonomous regions of Madeira and the
the higher production and
Azores face as a result of
marketing costs there. Analysis of
the
price of spirits sold in the regions concerned suggests
that a reduction in the rate of excise duty of about 75 %
of the normal national rate applied in Portugal on ethyl
alcohol would help align the price of spirits produced in
Madeira and the Azores to that of similar spirits imported
or supplied from other parts of the Community. Such a
measure should help the current industry to survive or
locally-produced spirits in
even expand. Current sales of
total approximately 360 000
Madeira and the Azores
litres per annum and provide 130 direct jobs,
including
70 on a seasonal basis.

the figures for

produced and consumed rum and liqueurs, and in the
the Azores on locally produced
autonomous region of
and consumed liqueurs and eaux-de-vie,
therefore
warranted and necessary to ensure that the development
of these regions is not jeopardised.

is

importance of giving local
security

economic
(3) Weighing the
operators
they need to develop their
the
commercial activities against the need to set a time limit
on tax derogations, the derogation is granted for a period
of seven years.

(4) The granting of a seven-year derogation must be subject to
the condition that a mid-term report is produced so that
the Commission can assess whether the reasons which
justify the granting of the tax derogation still exist.

(5) This proposal for a decision shall not prejudice the possible

application of Articles 87 and 88 of the Treaty,

HAS ADOPTED THIS DECISION:

Article 1

By way of derogation from Article 90 of the Treaty, Portugal is
authorised to apply a rate of excise duty lower than the full
rate on alcohol provided for by Article 3 of Council Directive
92/84/EEC (1) in the autonomous region of Madeira to locally
produced and consumed rum and liqueurs, and in the
autonomous region of the Azores, to locally produced and
consumed liqueurs and eaux-de-vie.

Article 2

The derogation provided for in Article 1 is restricted:

(a)

in Madeira

(cid:151) to rum as defined in Article 1(4)(a) of Regulation (EEC)
1576/89 (2) having the geographical characteristic (cid:145)Rum
da Madeira(cid:146) provided for in Article 5(3) and Annex II,
point 1 of that Regulation,

(2) The application by Portugal, by way of derogation from
Article 90 of
the excise
duty rate in the autonomous region of Madeira on locally

the Treaty, of a reduction of

(1) OJ L 316, 31.10.1992.
(2) OJ L 160, 12.6.1989, p. 1, Regulation last amended by Regulation

(EC) No 3378/94 (OJ L 366, 31.12.1994, p. 1).

30.10.2001

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Official Journal of the European Communities

C 304 E/211

(cid:151) to liqueurs as defined in Article 1(4)(r) of Regulation
fruit or

(EEC) No 1576/89, produced from regional
plants.

excise duty rate on alcohol fixed by Directive 92/84/EEC, but
may not be set more than 75 % below the standard national
excise duty rate on alcohol.

(b) in the Azores

(cid:151) to liqueurs as defined in Article 1(4)(r) of Regulation
(EEC) No 1576/89, produced from regional fruit or raw
materials,

(cid:151) to eau-de-vie made from wine or grape marc having the
characteristics and qualities defined in Article 1(4)(d)
and (f) of Regulation (EEC) No 1576/89.

Article 4

This decision shall be applicable from 1 January 2002 until
31 December 2008. By 31 December 2005 at
the latest,
Portugal shall send the Commission a report to enable it to
assess whether the reasons which justified the granting of the
reduced rate still exist.

Article 3

The reduced excise duty rates applicable to the products
provided for in Article 1 may be lower than the minimum

Article 5

This Decision is addressed to Portugal.