WRITTEN QUESTION P-1835/03 by Jean-Thomas Nordmann (ELDR) to the Commission. Tax on spirits in Ireland.
Date: 2003-05-26
Institutions: European Parliament, Provisional data
Subjects: Ireland, alcoholic beverage, competition, excise duty, tax harmonisation

C 11 E/234

Official Journal of the European Union

EN

15.1.2004

(2004/C 11 E/261)

WRITTEN QUESTION P-1835/03

by Jean-Thomas Nordmann (ELDR) to the Commission

(26 May 2003)

Subject: Tax on spirits in Ireland

Last December, in connection with Ireland’s 2003 budget, the Irish Government decided to increase duty
and taxes on spirits by 42 %.

Irish duty and taxes on spirits currently amount to EUR 39,25 per litre of pure alcohol, which is double
the rate for beer and cider (EUR 19,87 per litre of pure alcohol).

Close to 90 % of beer and cider consumed in Ireland is produced locally, whereas a considerable
proportion of spirits is imported, in particular brandy, for which Ireland represents a major export market
amounting to some 2 million litres.

What is the basis for this discriminatory measure against spirits consumed in Ireland, in particular brandy,
while spirits exported from Ireland, in particular Irish whiskey, benefit from markedly lower levels of
taxation in most other European countries?

Answer given by Mr Bolkestein on behalf of the Commission

(20 June 2003)

The rates of excise duty that Member States apply to alcohol and alcoholic beverages must respect the
minimum rates laid down in Directive 92/84/EEC (1) on the approximation of the rates of excise duties on
alcohol and alcoholic beverages. Above those minimum levels, Member States are in principle free to
determine the excise duty rates that they apply to each of the categories of alcoholic beverages. Thus, this
directive does not require Member States to fix these rates at comparable levels per degree of alcohol.

Furthermore, the rates fixed by Member States must respect the provisions of Article 90 of the EC Treaty.
This means that no Member State shall impose, directly or indirectly, on the products of other Member
States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic
products. Furthermore, no Member State shall impose on the products of other Member States any internal
taxation of such a nature as to afford indirect protection to other products.

The decision of the Ireland to apply to spirits a much higher rate of duty per degree of alcohol than to
beer or cider would not appear to infringe Article 90 of the EC Treaty, as interpreted by the Court of
Justice (2). The new rate applies equally to spirits produced in Ireland and to spirits imported into Ireland
from other Member States. Furthermore, as Ireland is itself an important producer of spirits, the higher rate
applied on spirits would not appear to afford unlawful protection to other alcoholic beverages produced in
Ireland, such as beer and cider.

The Commission intends to present in the near future a report on the rates of excise duty applied on
alcohol and alcoholic beverages. This report, to be submitted pursuant to Article 8 of Directive 92/84/EEC,
will consider, amongst others, the competition between different categories of alcoholic beverages.

(1) Council Directive 92/84/EEC of 19 October 1992, OJ L 316, 31.10.1992.
(2) See, in particular, the judgements of the ECJ in cases C-170/78 and C-166/98.