COMMISSION STAFF WORKING DOCUMENT Evaluation Accompanying the document REPORT FROM THE COMMISSION TO THE COUNCIL on the evaluation of Council Directive 92/83/EEC on the structures of excise duties on alcohol and alcoholic beverages
Date: 2016-10-28
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: EU Member State, alcoholic beverage, approximation of laws, chemical alcohol, ethanol, excise duty, single market, tax exemption, tax harmonisation, tax relief

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 28.10.2016  SWD(2016) 336 final   COMMISSION STAFF WORKING DOCUMENT Evaluation Accompanying the document REPORT FROM THE COMMISSION TO THE COUNCIL on the evaluation of Council Directive 92/83/EEC on the structures of excise duties on alcohol and alcoholic beverages  {COM(2016) 676 final} {SWD(2016) 337 final}  
 
 
TABLE OF CONTENTS 

Contents 

1. INTRODUCTION .................................................................................................................. 3 

2.1 

2.2 

Purpose of the evaluation ............................................................................................. 3 

Scope of the evaluation ................................................................................................ 4 

3. BACKGROUND .................................................................................................................... 4 

4. EVALUATION QUESTIONS ............................................................................................... 7 

5. METHODOLOGY ................................................................................................................. 7 

6. IMPLEMENTATION STATE OF PLAY ............................................................................. 8 

7. ANSWERS TO THE EVALUATION QUESTIONS ........................................................... 9 

7.1 

7.2  

7.3 

7.4 

7.5 

7.6 

To  what  extent  do  the  provisions  of  Directive  92/83/EEC  ensure  the  proper 
functioning of the internal market? .............................................................................. 9 

Do the provisions of Directive 92/83/EEC safeguard the budgetary interests in terms 
of taxation of the Member States? ............................................................................. 10 

Is there scope for reducing the cost of compliance and administrative burdens? ...... 11 

What  are  the  added  benefits  for  the  stakeholders  of  achieving  the  Directive’s 
objectives at the EU level? ......................................................................................... 12 

 To what extent do the provisions of Directive 92/83/EEC respond to the needs of the 
Member States and economic operators? ................................................................... 12 

To  what  extent  are  the  provisions  of  Directive  92/83/EEC  coherent  with  EU  and 
international legislation on excise duties on alcohol and alcoholic beverages? ........ 13 

8. RESULTS OF THE THEMATIC CASE STUDIES ........................................................... 14 

8.1 

8.2 

8.3 

8.4 

Definitions and classification of alcoholic products .................................................. 14 

Reduced rates for small producers ............................................................................. 14 

Reduced rates for alcoholic beverages below a certain alcoholic strength ................ 15 

Exemptions  and  reduced  rates  for  products  for  private  production  of  regional  or 
traditional nature for own consumption. .................................................................... 16 

8.5 

The current system for the management of the exemptions for denatured alcohol ... 16 

9. OVERALL CONCLUSIONS .............................................................................................. 18 

APPENDIX I    PROCEDURAL INFORMATION ............................................................. 19 

APPENDIX 2  

 SYNOPSIS REPORT AND CONSULTATION STRATEGY ................. 21 

2 

 
 
 
 
 
 
1. INTRODUCTION  

The EU’s right to act in the area of excise duties is established in Article 113 of the Treaty on 
the Functioning of the European Union, which specifies that “the Council shall adopt 
provisions for the harmonisation of legislation concerning turnover taxes, excise duties and 
other forms of indirect taxation to the extent that such harmonisation is necessary to ensure 
the establishment and the functioning of the internal market and to avoid distortion of 
competition”. 

The basic principles applicable to all products that are subject to excise duties were first laid 
down in 1992 in Directive 92/12/EEC. The legislative act currently in force is Directive 
2008/118/EC1.  

The specific arrangements for the taxation of alcohol products were introduced on 1 January 
1993 in the run-up to the completion of the internal market: 

• 

• 

Directive 92/83/EEC2 deals with the structure of excise duties on alcohol and 
alcoholic beverages. Inter alia, it establishes the basis for the calculation of excise 
duties by defining applicable excise categories, and sets out the scope for applying 
reduced rates and lists applicable exemptions. 
Directive 92/84/EEC3 fixes minimum rates for the excise duties on alcohol and 
alcoholic beverages. 

The subject of this retrospective evaluation was the functioning of Directive 92/83/EEC under 
the current legal framework.  

In order to evaluate the functioning of the Directive, the Directorate-General for Taxation and 
the  Customs  Union  (DG  TAXUD)  commissioned  an  external  evaluation  from  a  consortium 
established  by  Ramboll  Management  Consulting  AS,  Coffey  and  Europe  Economics.  The 
present  Staff  Working  Document  (SWD)  is  largely  based  on  the  results  and  conclusions  of 
that evaluation study, which assessed the Directive from all angles. 

2.1 Purpose of the evaluation 

Directive  92/83/EEC  has  been  identified  for  a  retrospective  evaluation.  The  Directive  is  24 
years in existence, little has been changed, and the alcohol sector and the beverages available 
now are very different from in  1992 when the Directive was  drawn up. The evaluation was 
proposed in order to assess whether the Directive is still fit for purpose, and meets the Better 
Regulation criteria of effectiveness, efficiency, relevance, EU-added value and coherence4.  

The evaluation specifically sought to: 

1 Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and 
repealing Directive 92/12/EEC 
2  Council  Directive  92/83/EEC of  19  October  1992  on  the  harmonisation  of  the  structures  of  excise duties  on 
alcohol and alcoholic beverages 
3 Council Directive 92/84/EEC of 19 October 1992 on the approximation of  rates of excise duties on alcohol and 
alcoholic beverages 
4  http://ec.europa.eu/smart-regulation/guidelines/docs/swd_br_guidelines_en.pdf 

3 

 
 
 
 
 
 
 
 
 
 
 
                                                            
  assess the extent to which Directive 92/83/EEC meets the objectives it sought to 

 

 

achieve;  
identify weaknesses in and assesses the quality of the legislative environment which 
result in negative consequences for stakeholders (e.g. internal market, competitive 
disruptions, administrative and compliance costs, etc.); 
formulate recommendations, based on the collected evidence, on how best to address 
identified issues. 

Following consultation with Member States, it was agreed that the objective of the evaluation 
should  be  to  assess  whether  the  legislation  leads  to  unnecessary  administrative  costs  and 
burdens  for  both  national  administrations  and  economic  operators  and  to  identify  elements 
which could be further assessed as part of an impact assessment on the level of compliance 
and security in collecting excise duties on alcohol and alcoholic beverages.  

The  Staff  Working  Document  will  be  used  to  accompany  the  Commission  Report  to  the  
Council to allow for a  decision  whether to  analyse  further and pursue the recommendations 
made with a view to correcting the areas of weakness by a proposal to amend the Directive. 

2.2 Scope of the evaluation 

The scope of the study is a retrospective evaluation of the Directive and its functioning under 
the existing, general, legal framework. It covers all provisions, beginning with the definitions 
of different categories of alcoholic beverages for excise purposes, reduced rates, exemptions 
and other legislative provisions. 

Furthermore, according to Article 22 (7), the Commission is required, during 2015, to review 
an  arrangement  contained  within  the  Directive  and  report  to  the  Council  on  possible 
modifications5.  

The  report  concentrates  exclusively  on  structures  of  excise  duties  on  alcohol  and  alcoholic 
beverages,  and  does  not  discuss  or  combine  the  findings  in  any  way  with  the  Directive 
92/84/EEC, the "rates Directive". 

3. BACKGROUND  

Directive 92/83/EEC sets out the rules on the structures of excise duty applied to alcohol and 
alcoholic beverages. In particular, it defines and classifies the different types of alcohol and 
alcoholic beverages, and provides a legal framework for reduced rates in some sectors, 
exemptions and certain derogations. 

The Directive aims to ensure both the proper functioning of the internal market, reduce 
distortion of competition and guarantee the free movement of products in this sector. Figure 1 
below presents the agreed intervention logic for Directive 92/83/EEC, laying down the 

5 Article 22(7) Hungary, Romania and Slovakia may apply a reduced rate of excise duty applied  to ethyl alcohol 
produced  by  fruit  growers'  distilleries  producing  more  than  10HL  p.a.  from  fruit  supplied  to  them  by  fruit 
growers'  households,  limited  per  household  to  50  L  of  fruit  spirit  p.a.  and  destined  exclusively  for  their  own 
consumption. 

4 

 
 
 
 
 
 
 
 
                                                            
assumed links between the provisions of the Directive and the practical outputs as well as 
overarching aims of this legal act.  

5 

 
 
6 

 
 
 
 
 
4. EVALUATION QUESTIONS 
The following table lists the key evaluation questions6: 

EQ 
No. 

1 

2 

3 

Evaluation Question 

Evaluation Criteria/ 
Perspective 

To what extent do the provisions of Directive 92/83/EEC 
ensure the proper functioning of the internal market?   

Effectiveness  

To what extent do the provisions of Directive 92/83/EEC 
safeguard the budgetary interests of the Member States?   

Effectiveness 

To what extent is there scope for compliance cost and 
administrative burden reduction? 

Efficiency 

4  What are the added benefits for the stakeholders of 

EU added value 

achieving the Directive’s objectives at the EU level? 

5 

6 

To what extent do the provisions of Directive 92/83/EEC 
respond to the needs of the Member States and economic 
operators? 

Relevance 

To what extent are the provisions of Directive 92/83/EEC 
coherent with EU and international legislation on excise 
duties on alcohol and alcoholic beverages? 

Coherence 

7  Which of the problems identified could be solved through 
additional EU or national action and thus deserve further 
consideration? 

Recommendations 

5. METHODOLOGY 

The  evaluation  was  supported  by  an  external  comprehensive  study.  The  contractors  were 
given the task of (1) collecting data and evidence in order to answer the evaluation questions 
and (2) based on the responses to the questionnaires, they then carried out a broad stakeholder 
consultation. Alongside desk research, the contractors conducted targeted surveys to Member 
States  administrations  (tax/customs/finance  and  health  authorities)  and  economic  operators 
active in the alcohol market and/or associations representing their interest. The conclusions of 
the study are based on the triangulation of data using multiple analytical methods and present 
the views of the external contractors.  

Member  States  were  consulted  on  the  functioning  of  all  provisions  of  the  Directive.  All  28 
Member States submitted responses to the questionnaire. Economic operators were consulted 
via a web-based questionnaire, which was promoted by the European Commission on various 

6 http://ec.europa.eu/smart-regulation/guidelines/ug_chap6_en.htm 

7 

 
 
 
                                                            
web platforms through a press release, social media and via the YourVoice in Europe website. 
A  total  of  323  answers  were  received  (of  which  76  partially  completed).  The  respondents 
cover the five different product categories provided for in the Directive (i.e. beer, wine, other 
fermented beverages, intermediate products  and spirits),  producers,  distributors  and users of 
denatured  alcohol  as  well  as  trade  associations  and  federations  of  the  above  mentioned 
sectors.  The  survey  reached  economic  operators  from  all  EU  Member  States  and  was 
considered to present a relatively balanced representation in terms of number of respondents 
compared to the size of the Member State.  

A  relative  majority  of  the  responding  economic  operators  represented  large  and  very  large 
firms of more than 250 employees. At the same time, almost half the economic operators were 
rather small with 50 employees or less. The conclusions drawn were that the survey samples 
were both balanced and representative. 

In parallel to this data collection, the contractors prepared together with the Commission the 
open  public  consultation,  in  accordance  with  the  requirements  of  the  Better  Regulation 
Guidelines.  The  public  consultation  was  open  to  responses  between  August  and  November 
2015. In total, 328 participants to the survey provided partial or complete responses.  

The high level information collected through consultation at EU-28 level was complemented 
with data collected in the context of 5 thematic case studies, involving in-depth interviews of 
personnel  of  Member  States  administrations,  (customs  and  excise  administrations;  customs 
laboratories) and selected economic operators. The case study themes covered: classification 
for tax purposes of alcoholic beverages, application of reduced rates for small producers, the 
functioning  of  the  exemptions  for  denatured  alcohol,  exemptions  applicable  to  provide 
production for own consumption and coherence of the Directive with health aspects.  

A  more  detailed  insight  into  the  conceptual  design,  the  analytical  strategy  and  consultation 
strategy can be found in Appendix 2 - Consultation strategy synopsis report. 

There were several shortcomings emanating from the evaluation: 

1.  A  quantitative  approach  was  not  used  when  assessing  whether  the  Directive  is 

efficient is protecting the budgetary safeguards of the Member States 

2.  In  the  area  of  linking  the  exemption  applied  to  denatured  alcohol  to  fraud,  Member 
States,  in  many  instances,  could  not  or  would  not  provide  the  granularity  of  data 
required to make a sound judgement, and some that did assess the level of fraud at a 
significant degree did not provide evidence to support their considerations. 

3.  Data relating to cost categories and provisions that may lead to administrative burden 

were not quantified during the study. 

6. IMPLEMENTATION STATE OF PLAY 

Since  the  specific  arrangements  for  the  taxation  of  alcohol  products  were  introduced  on  1 
January  1993  by  the  Directive  92/83/EEC  in  the  run-up  to  the  completion  of  the  internal 
market,  the  substance  of  the  Directive  has  not  materially  changed  (apart  from  specific 
provisions addressed to Member States that subsequently joined the EU since 1993). At the 

8 

 
 
 
same time the market for alcohol products and the alcohol products themselves have changed 
significantly.  

The  reduced  rates  for  small  producers  only  apply  to  the  production  of  beer  and  of  ethyl 
alcohol, and do not extend to fermented beverages, intermediate products and wine. This is in 
part  due  to  the  fact  that  there  was  a  minimum  rate  of  zero  set  for  wine  and  fermented 
beverages.  

There is an area of ambiguity in the way alcohol produced for own consumption is taxed. The 
Directive allows all Member States to exempt excise duty on beer, wine and other fermented 
beverages when it is produced by a private individual and consumed by them or members of 
their  family  or  guests,  but  this  does  not  apply  to  spirits  and  intermediate  products.  There  is 
also a specific derogation granted to Bulgaria / Czech Republic and Hungary / Romania and 
Slovakia  to  apply  a  reduced  rate  of  50%  (of  the  standard  national  rate  of  excise)  to  spirits 
produced by fruit growers' distilleries for their own consumption. 

There have also been a number of infringement cases / legal challenges mostly in the area of 
classification (for example the Siebrands ruling7) and in the application of the reduced rates 
for the production of ethyl alcohol (for example Palinka8) since the Directive was introduced. 
This includes reduced rates / exemptions applied for small producers and private production / 
own consumption and also several high profile classification cases. 

7. ANSWERS TO THE EVALUATION QUESTIONS 

7.1 To  what  extent  do  the  provisions  of  Directive  92/83/EEC  ensure  the  proper 
functioning of the internal market? 

The proper functioning of the internal market in the context of the excise structures on alcohol 
and alcoholic beverages, is understood to include three core components: 

i) 

ii) 
iii) 

clear and consistent framework for excise duties to be paid on alcohol and alcoholic 
beverages; 
“level playing field” in terms of competition between economic operators; 
reduces the risk of circumvention of excise duty. 

Overall, the Directive was found to be effective in achieving these three objectives. Through 
the harmonisation of structures, the approximation of rates and the definition of the scope of 
application of excise duty, at a general level, the Directive allows intra-EU trade to take place 
free  of  significant  tax-related  trade  barriers,  or  major  competitive  disruptions  between 
economic  operators  operating  in  the  same  sector  of  activity.  Volumes  of  trade  were  not 
analysed as part of the evaluation. 

The  Directive  successfully  structures  the  taxation  of  alcoholic  beverages  in  the  categories 
specified in Directive 92/84/EEC which, in turn, sets minimum excise rates, and in Directive 
2008/118/EU concerning the general arrangements for excise duty. There are clear rules with 
regard to the possibility of setting reduced rates for small producers or low-strength alcohol 
products. This provides a consistent framework for the taxation of alcohol.  

7 http://curia.europa.eu/juris/liste.jsf?language=en&num=C-150/08 
8 http://europa.eu/rapid/press-release_IP-13-138_en.htm 

9 

 
 
                                                            
Despite this overall positive conclusion, there are several points where the Directive does not 
provide the necessary legal clarity, and the issues  this creates have  an adverse effect on the 
functioning of the internal market.  

The classification of certain products remains unclear because they could fall into any one of 
several  categories,  resulting  in  different  treatment  in  different  Member  States  and 
complications  when  these  products  have  to  be  transported  cross-border.  Similarly,  the 
difficulties  encountered  with  the  interpretation  of  the  provisions  for  exempting  denatured 
alcohol  hinder  the  proper  functioning  of  the  internal  market,  as  the  conditions  for  such 
exemptions vary considerably across the Member States. 

Where  the  Directive  does  sets  clear  rules,  it  also  ensures  similar  conditions  for  economic 
operators across the EU. Their products are taxed on the basis of principles that apply in all 
the Member States. However, the absence of clarity regarding the exemptions for denatured 
alcohol permits excessive room for interpretation by the Member States. In turn, this leads to 
strong  imbalances  in  competition,  because  the  producers  and  users  of  denatured  alcohol 
located  in  some  Member  States  have  a  much  wider  choice  of  denaturing  formulations  than 
those in other Member States. 

Furthermore,  the  Member  States  are  unable  to  consistently  apply  reduced  rates  to  small 
producers in respect of all the categories of alcoholic beverage. This unnecessarily limits the 
ability  of  the  Member  States  to  correct  potential  market  imbalances  where  such  a  policy 
objective might be worth pursuing. 

7.2 Do the provisions of Directive 92/83/EEC safeguard the budgetary interests in terms 
of taxation of the Member States?   

Concerning the potential loss of excise duties for Member States, this evaluation considered: 

i) 

fraud  involving alcohol and alcoholic beverages, and specifically the extent to which 
fraud involving denatured alcohol is taking place;  

The  Directive’s  provisions  for  ensuring  the  denaturation  of  alcohol  intended  for  industrial 
purposes aim to protect the integrity of the exemption, and prevent such alcohol from being 
converted  back  into  consumable  alcohol.  Overall,  the  available  data  on  fraud  showed  that 
misuse  of  the  exemption  for  denatured  alcohol  represents  a  very  low  proportion  of  total 
alcohol-related  fraud.  One  caveat  should  be  entered  here,  however,  due  to  the  fact  that  15 
Member States either did not know or did not submit an answer to the question of what duty 
loss  due  to  fraud  could  be  linked  to  the  abuse  of  denatured  alcohol.  However,  in  a  few 
Member States the findings suggest that fraud involving the use of denatured alcohol is non-
trivial  e.g.  Spain  and  Latvia  estimated  that  61-80%  of  the  total  losses  due  to  fraud  were 
related to abuse of denatured alcohol (on spirits – which is where the denatured alcohol fraud 
is most prevalent); losses in Estonia and Poland is estimated at 41-60%. Further investigation 
would  be  needed  to  identify  whether  this  fraud  can  be  traced  back  to  a  deficiency  in  the 
Directive and the necessity as a result of that investigation, to define denatured alcohol, how it 
is  manufactured  and  used  in  order  to  qualify  for  the  exemption,  and  require  economic 
operators to use  denaturing formulations which cannot easily and cheaply  be removed from 
the product.  

ii) 

the  potential  misclassification  of  alcoholic  beverages  into  a  tax  category  lower  in 
terms of taxation than was intended by the Member States. 

This  analysis  was  also  limited  to  5  Member  States  during  the  case  study  phase.  Several 
different product types were identified whose classification is not straightforward, and which 

10 

 
could  arguably  be  assigned  to  two  or  more  different  tax  categories.  Problems  primarily 
concern  the  category  of  “other  fermented  beverages”  (thereby  benefiting  from  a  beneficial 
taxation regime) which is where the majority of disputes occur, and which products should be 
covered by the categories of “intermediate products” or “ethyl alcohol” with a higher excise 
duty  rate.  It  is  a  message  which  is,  arguably,  better  conveyed,  understood  and  (mainly) 
accepted  in  relation  to  the  categories  of  “beer”  and  “wine”.  Specifically,  products  causing 
concern are: 

“Ready-to-drink” products (also known as “alcopops) 

Medium strength fermented beverages between 10-15% ABV16 

Fermented alcohol with an alcoholic strength between 15 and 18% reached through industrial 
processes, bottled and sold to look like its equivalent, higher rate spirit. 

Some  of  these  products  have  been  regarded  as  attempts  to  abuse  a  favourable  tax  category. 
Besides  creating  competitive  distortions,  the  failure  to  provide  unambiguous  classificatory 
definitions may result in the Member States losing revenue. Quantification across the EU 28 
has not yet been performed. 

7.3 Is there scope for reducing the cost of compliance and administrative burdens? 

Directive  92/83/EEC  does  not  directly  impose  compliance  costs  on  economic  operators.  By 
including  certain  products  in  the scope  of  excise  duty,  it indirectly subjects those  sectors  to 
the provisions of Directive 2008/118/EC, which sets out the rules and conditions for holding 
and moving excise duty goods. 

However,  the  evaluation  of  Directive  92/83/EEC  has  identified  multiple  areas  in  which  the 
application  of  the  provisions  of  the  Directive  are  resulting  in  increased  costs  for  both 
economic operators and Member States for example: 

 

increased guarantees for movements of denatured alcohol depending on treatment and 
application of the rules in a particular Member State; 

  cost  burdens  for  administrations  in  the  customs  laboratories  who  perform  scientific 
checks on other Member States denaturing formulations compared to those who apply 
mutual recognition more flexibly; 

  costs of legal challenge in cases of dispute over classification problems 

These increased administrative and compliance costs identified result not from the application 
of  systematic  obligations  inscribed  in  legislation;  rather,  they  are  the  result  of  the 
complications,  disputes  and  the  inconsistent  application  of  the  Directive’s  provisions  that 
arise  from  situations  in  which  stakeholders  disagree  on  their  interpretation.  The  number  of 
examples  supporting  this  assessment,  plus  their  geographical  extent,  indicates  that  these 
complications  are  the  result  of  a  failure  of  the  Directive  to  provide  sufficient  clarity  to 
stakeholders9. 

In summary, issues surrounding the classification of products which have been identified as 
‘difficult to classify’ and the management of exemptions for denatured alcohol are resulting in 
increased  costs  for  all  the  stakeholders  concerned  (including  the  Member  States’  tax 
authorities  as  well  as  the  economic  operators).  It  cannot  therefore  be  concluded  that  the 
Directive is efficient. 

9 Chapter 2. Classification of alcohol and alcoholic beverages – Evaluation of Council Directive 92/83/EEC 

11 

 
 
                                                            
7.4 What  are  the  added  benefits  for  the  stakeholders  of  achieving  the  Directive’s 
objectives at the EU level? 

The evaluation has assessed the added value of establishing common rules at the EU level for 
the  classification  of  alcoholic  beverages,  the  granting  of  reduced  rates  for  small  producers, 
and the exemption of denatured alcohol from the scope of excise duty.  

The  findings  of  this  study  clearly  show  that  only  an  EU-wide  system  can  provide  the 
uniformity and harmonised conditions that are necessary to ensure the proper functioning of 
the internal market. Based on the evidence supplied from the questionnaires, the majority of 
the  tax  administrations  in  the  Member  States  agree  that  it  would  not  have  been  possible  to 
achieve  the  same  results  in  terms  of  effectiveness  and  efficiency  –  let  alone  more  positive 
ones – via an alternative, bilateral or international approach. 

Moreover,  the  stakeholders’  divergent  interpretations  of  the  Directive  show  that  its 
effectiveness could be improved by expanding the EU-level approach. Greater engagement by 
the  Commission  in  the  future  could  be  the  response  that  would  sustain  and  enhance  the 
uniform application of the Directive’s provisions across the EU.  

Overall,  the  evidence  collected  shows  that  all  types  of  stakeholder  strongly  support  an  EU-
level approach regarding the excise duty levied on alcohol and alcoholic beverages, which in 
turn,  facilitates  trade,  prevents  competitive  distortions,  reduces  administrative  costs  and 
prevents fraud. 

7.5  To what extent do the provisions of Directive 92/83/EEC respond to the needs of the 
Member States and economic operators? 

This question sought to understand whether the provisions of the Directive as formulated are 
still  fulfilling  the  needs  of  Member  States  and  economic  operators.  As  a  result,  it  was 
assessed:  

whether the needs that the Directive sought to address still exist;  
(i) 
to what extent those needs have evolved, and how;  
(ii) 
(iii)  whether the arrangements meet the current needs.  

While important progress has been made in the past twenty years towards the establishment of 
the  common  market,  the  Directive’s  objectives  of  providing  a  clear  and  consistent  legal 
framework, ensuring fair competition and reducing the risk of excise duty being circumvented 
continue to be highly relevant. In this context, the provision of common rules regarding the 
levying of excise duty on alcohol and alcoholic beverages has continued to be important. 

Consideration was given to whether the needs of the Member States have evolved in relation 
to  the  imposition  of  excise  duty  on  alcohol,  in  so  far  as  they  might  today  also  include  the 
objective of influencing alcohol consumption habits  via adjustments in  excise  duty  rates.  In 
practice, only a few Member States mentioned any health policy objectives in connection with 
the overall relevance of the provisions; accordingly, no definitive conclusions can be drawn in 
this area. Public health considerations need to be included in the further process. 

Overall, the specific provisions of the Directive were reported to correspond to the needs of 
the administrations in the Member States and industry. The study report further analyses the 
needs  of  industry  in  terms  of  size  and  geographical  location.  The  assigning  of  alcohol  and 
alcoholic beverages to different categories for excise duty purposes continues to be relevant. 
Although  some  Member  States  (and  spirits  producers  in  particular)  argued  in  favour  of 
taxation based on alcohol strength but without specific product categories, the evidence shows 
that  the  maintenance  of  different  categories  is  important  for  preserving  socio-cultural 
12 

 
 
traditions (e.g. the continuous production and consumption of traditional products often made 
from  natural  ingredients  grown  in  a  particular  location),  and  for  supporting  the  creation  or 
preservation of jobs, practices and traditional crafts. 

The findings reveal that there are a few provisions that no longer seem to be needed, such as 
Article 28 regarding rules specifically for the United Kingdom which that Member State no 
longer applies. In addition, as several Member States have introduced positive rates of excise 
duties  on  wine,  the  fact  that  there  is  no  provision  for  a  reduced  rate  for  small  producers  of 
wine and other fermented beverages may no longer be justified. 

Finally, the relevance of reduced rates for products of low alcoholic strength was questioned. 
Further analysis at the impact assessment stage would be needed to draw any conclusion as to 
whether  these  reduced  rates  correspond  to  national  practices  linked  to  health  policy 
objectives, and whether they correspond to any of the overall objectives that are stated in the 
Directive and identified in the evaluation criteria. Specifically, reduced rates for intermediate 
products and ethyl alcohol are rarely used by the Member States, and they might actually be 
undermining  the  objectives  of  the  provision  in  the  first  place,  as  they  could  unintentionally 
increase  the  consumption  of  a  product  benefiting  from  the  reduced  rate  in  its  own  duty 
category  despite  its  alcohol  strength  actually  being  higher  than  that  of  a  similar  product 
belonging to a different duty category.   

7.6 To  what  extent  are  the  provisions  of  Directive  92/83/EEC  coherent  with  EU  and 
international legislation on excise duties on alcohol and alcoholic beverages? 

The evaluation has assessed the external coherence of the Directive with EU legislation and 
international  agreements.  Because  the  Directive was  adopted  more  than 20  years  ago,  some 
changes  have  been  made  to  ancillary  legislation.  However,  these  changes  are  not  damaging 
the  coherence  of  the  provisions.  While  there  are  a  number  of  references  in  the  Directive  to 
other EU legislation and to CN codes that need to be updated, the inconsistencies identified 
were not reported to be causing any significant practical problems.  

Two  points  with  regard to  coherence  are  creating  problems  for  economic  operators,  namely 
the CN codes for denatured alcohol, and the treatment of wine precursors: 

  Member  States  are  not  using  the  CN  codes  for  denatured  alcohol  in  a  consistent 
manner. While there is a CN code for denatured alcohol (2207 20), a number of other 
codes are being used for particular products that may contain denatured alcohol. This 
can have an impact on the conditions applying to the movement of these products, as 
well on the ability of the Member States to monitor and control the movements. This 
is  a  significant  issue  which  has  a  detrimental  effect  on  the  operation  of  the  regime 
creating additional costs and burdens for authorities in the Member States and industry 
  Two Member States reported issues with the treatment of wine precursors (i.e. must and 
juices  that  are  due  to  be  turned  into  wine).  The  Directive  does  not  define  them  as 
excisable  goods,  but  (in  those  Member  States)  the  practice  is  that  they  can  be  moved 
under  the  Excise  Movement  and  Control  System  (EMCS).  There  is  currently  no  legal 
requirement to do this. This is not a material issue, is limited in impact to 2 Member 
States, and as it is not an excise product, it is not a tax issue. 

No inconsistencies between the Directive and international agreements were found.   

13 

 
 
 
 
 
8. RESULTS OF THE THEMATIC CASE STUDIES 

The rationale for the detailed case studies and selection of the Member States chosen, was to 
enable the evaluation to prioritise those Member States and subject areas where the feedback 
from the questionnaires and desk research indicated there were the most significant problems. 
In order to balance the views, equal numbers of economic operators were invited to 
participate in interviews on the same topics.  

8.1 Definitions and classification of alcoholic products 

Since entry into force of Directive 92/83/EEC, the definitions and classification of alcohol 
and alcoholic beverages have not been amended and have therefore not taken in account 
Regulation (EC) No. 110/200810 on the definition, description, presentation, labelling and the 
protection of spirit drinks. This therefore can lead to a significant amount of subjective 
interpretation.  

The following conclusions are drawn: 

  Different interpretations of the meaning of “entirely of fermented origin” concerns the 
treatment of the same product in different Member States and can therefore negatively 
affect the functioning of the internal market when Member States have a different 
understanding of what constitutes a product of entirely of fermented origin. 

  The existence of tax incentives of having ones product classified within one excise 
category over another has resulted in the development and marketing of products 
which seek to comply with the requirements of a more beneficial tax category while 
arguably circumventing the intention of the legislator of what should fall within the 
more favourable category. Drawing from this that the development of such products 
would perhaps not have been so extensive without the tax break. 

  The issue of classification of these types of products is a significant one in terms of the 
potential revenue loss, with potentially hundreds of millions of Euros of tax revenue at 
stake per annum.  

  Disputes related to the classification of certain alcoholic beverages show that the 
intention of the legislator is not being interpreted coherently across the EU with 
potential consequences in terms of excise revenue, legal clarity and consistency of 
taxation across Member States as well as on fair competition for economic operators. 
  Attempts to resolve the lack of understanding of what constitutes an “other-fermented 
beverage” for excise purposes within the current legislative context, which have 
focused on the legal interpretation of CN code 2206 have failed to provide an 
acceptable, coherent and unequivocal resolution to the reported issues and are not 
expected to do so fully in the future.  

  The addition of flavours with alcoholic content to a wine base product is possible 

without the loss of the excise classification11 of the EMCS code for still wine and still 
fermented beverages other than wine and beer of "W200".   

8.2 Reduced rates for small producers 

10 Regulation (EC) No. 110/2008 of the European Parliament and of the Council of 15 January 2008 
11 EMCS: W200 = wine based product under Annex II, Table 11 (Excise Product) of Regulation 684/2009 

14 

 
 
 
 
 
 
                                                            
A number of Member States would like to have the possibility to introduce reduced rates for 
small producers within certain product categories which are currently not covered by the 
provisions on reduced rates for small producers inscribed in the Directive. 

Based on the analysis of competition, it seems unlikely that the presence of reduced rates for 
small brewers and small distilleries have caused any negative competitive distortions within 
their markets (nor in the markets of other product categories). To the extent that the rationale 
for the introduction of reduced rates holds for small brewers and distillers (i.e. to level the 
playing field and allow small producers of these products to compete more effectively against 
larger producers), it is therefore appropriate to further examine whether this could be 
extended to producers of other beverages too, because the evidence is clear that economies of 
scale are likely to be present in those sectors too. However, public health considerations 
should be taken into account when the rates are set. 

8.3 Reduced rates for alcoholic beverages below a certain alcoholic strength 

The evaluation has found several weaknesses in relation to each individual provision: 

 

 

 

the threshold for application of reduced rates for low strength beer (alcohol by volume 
(ABV) of 2.5%) is too low for the modern brewing of traditional beer and the rate is 
more suited to the type of beers mixed with lemonade. 
the widespread use of the zero rates for wine, together with the rigid EU and 
international agricultural and commercial standards which are applicable in the wine 
industry, render the 8.5% threshold for wine largely irrelevant to all but a few wine 
products in special circumstances, although several Member States (who tax wine) do 
apply such a provision. 
in light of the classification issues reported in detail in section 4.3.1, and in particular, 
the findings related to the perceived abuse of the “other fermented beverages” 
category, the current threshold (8.5%) of this category may, in addition to the intended 
support for low-strength other fermented beverages, inadvertently give further support 
to products which, in the opinion of some, abuse the already lower rates of this excise 
category.  

  Additional research on this topic (especially in the context where the 

recommendations on classification are taken up) would be necessary to determine the 
extent to which the provision is appropriate in light of re-established objectives. Such 
an analysis should not neglect to take into account similarities between this category 
and wine. 

  Despite general support by Member States regarding the appropriateness of the 

provisions for low strength alcohol, only one applies such a rate, and does so only for 
products below 2.8%. As a result, individually, this provision seems to have become 
irrelevant. 

As the full extent of these weaknesses could not be analysed in the context of this evaluation 
(in the context of a lack of common understanding, by stakeholders, of the core policy 
purpose of these provisions), further investigation is recommended. Such an in-depth analysis 
could be performed in the context of a future impact assessment which may investigate the 
impact of several policy options. 

This investigation must be taken up in dialogue with Member States tax and health 
authorities. 

15 

 
 
 
 
 
 
 
 
8.4 Exemptions  and  reduced  rates  for  products  for  private  production  of  regional  or 
traditional nature for own consumption. 

Most Member States apply the current exemptions on beer, wine and fermented beverages 
and have not stated any severely negative experiences from applying these provisions. 
However, when it comes to the possibility of extending exemptions to cover intermediate 
products and ethyl alcohol, opinions are more divided, with most Member States having a 
strong view on whether such exemptions should be allowed: 

 

In favour - because of the important role that traditional home-made spirits and 
production methods play in their country’s culture, or because they believe that such 
exemptions would legalise alcohol production which would otherwise take place 
illegally.  

  Against - the perceived increased risk of (cross-border) fraud, higher administrative 

costs and burden, as well as perceived health risks. 

8.5 The current system for the management of the exemptions for denatured alcohol  

8.5.1 There are (still) too many national denaturing formulations in existence in the 
EU28, both for completely denatured alcohol (CDA) under Article 27.1 (a) and 
denatured alcohol which is exempted under Article 27.1 (b). All Member States 
should apply the same interpretation regarding the conditions under which the CDA 
formulations listed in Regulation (EU) 162/2013 can be used. And the principle of 
mutual recognition should also be clarified within the context of Article 27(1) (b). 

8.5.2 There is little common agreement about what the qualifying criteria is to 
determine which products can be exempted under Article 27.1 (b). In addition, the 
scope of the Article should be clarified in order to unambiguously specify those 
products that can be exempted under Article 27.1 (a) and the consequences that flow 
from the distinction (e.g. in terms of the requirements for monitoring and control).  

8.5.3 The term “not for human consumption” is not interpreted in the same way by the 
Member States when applying the rules to products that qualify for exemption under 
Article 27.1 (b). The requirements for movements of denatured alcohol used in the 
manufacture of products which are then moved in bulk are not consistent across the 
Member States.  

8.5.4 Economic operators face uncertainty because there is no common understanding 
of what constitutes a CDA movement among the Member States, nor whether a given 
national formulation under Article 27.1 (b) is considered sufficient for securing an 
exemption in cases of intra-EU movements. However, the economic operators 
underlined their need for flexibility in using different denaturing formulations which 
can be adapted to their particular products and sectors.  

8.5.5 The mechanism provided for conflict resolution to notify cases of fraud, evasion 
and abuse in Article 27.5 is under-used. The evidence on the magnitude of fraudulent 
use of denatured alcohol is limited. This is to be expected given the inherent 
uncertainty in measuring illicit activity.  

However, some Member States were able to provide estimates of the magnitude of this 
type of fraud, and there is evidence from other sources on this type of fraud. The 
analysis suggests that fraudulent use of denatured alcohol does occur and is non-trivial 
in certain Member States. Therefore, collection of better statistics could be justified to 

16 

 
 
 
help understand whether additional policy action to prevent this type of fraud is 
warranted. 

17 

 
9. OVERALL CONCLUSIONS 

The evaluation of the Directive has proven it to be generally appropriate for enabling 
adequate collection of excise duties for the large majority of stakeholders. 

Overall, the evaluation found that the general principles which define the current structures of 
alcohol and alcoholic beverages allow for neutral conditions of competition. At the same time, 
the  evaluation  findings  show  that  there  are  some  distortions  within  the  internal  market,  and 
that they are significantly detrimental that the Commission must act upon them. 

The evaluation does not quantify administrative and compliance costs for tax administrations 
and  economic  operators.  However,  the  evidence  collected  shows  that  the  lack  of  clarity  of 
certain  provisions  (e.g.  in  the  area  of  classification)  can  lead  to  legal  uncertainty  over  the 
treatment of specific products, which in turn, can result in additional costs to businesses. The 
results of the evaluation also show that the existing ambiguity may lead to a revenue loss to 
Member States. The policy in these areas can therefore be considered not fully fit for purpose 
and further consideration could be given to possible simplification and / or clarification of the 
legislation. 

18 

 
 
 
 
 
 
APPENDIX I   

PROCEDURAL INFORMATION 

• 

• 

• 

LEAD DG – DG TAXUD, UNIT C2 ALCOHOL AND TOBACCO SECTOR (B) 

WORK PROGRAMME REFERENCE – 2015/TAXUD/034 

ORGANISATION AND TIMING 

• 

CHRONOLOGY OF THE EVALUATION 

Activity 

Signature of the contract 

Inter-Service Steering Group (1) – kick-off meeting 

Inception report 

Inter-Service Steering Group (2) 

Inter-Service Steering Group (3) 

Fiscalis Seminar (Latvia) 

Questionnaires (public, Member States, industry) 

Inter-Service Steering Group (4) 

Progress report 

19 

19/12/14 

21/1/2015 

29/1/2015 

2/3/2015 

13/4/2015 

19-
21/5/2015 

27/8 - 
27/11/2015 

22/10/2015 

29/1/2016 

 
 
 
 
 
Activity 

Inter-Service Steering Group (5) 

Targeted case studies  

Triangulation and analysis 

Draft final report 

Inter-Service Steering Group (6) 

Final report  

15/2/2016 

8/3/2016 – 
18/4/2016 

18/4 – 
16/5/2016 

20/5/2016 

2/6/2016 

9/6/2016 

• 

QUALITY ASSURANCE 

The Commission has carefully examined the  external evaluation and has also taken 
account  of  the  feedback  received  from  stakeholders.  The  work  carried  out  by  the 
evaluation team was judged to be in accordance with the better regulation standards 
of the Commission12. 

The  judgements  and  conclusions  in  the  evaluation  were  derived  directly  from 
findings  based  on  the  evidence  collected.  To  ensure  the  robustness  of  the  findings, 
the  evaluation  used  several  data  collection  methods,  including  surveys,  interviews, 
desk  research and  case studies.  This methodological mix  was overall considered as 
sufficient by the Commission. 

• 

EXTERNAL EXPERTISE 

There  was  a  Fiscalis  workshop  held  to  prepare  the  Member  States  for  the 
questionnaires and case studies in Latvia over 19-21 May 2015. 

Throughout  the  period  of  the  evaluation,  there  have  been  regular  meetings  of  the 
Fiscalis Project Group (013), covering specifically the area of the exemptions applied 
to denatured alcohol. This consists of policy experts from the tax administrations and 
also  the  technical  resource  from  the  customs  laboratories  in  the  Member  States. 
Working alongside them, the scientific resource of the Joint Research Centre (JRC) 
in the Commission through an Administrative Agreement between the 2 DGs. 

An  industry  Round  Table  has  also  been  established  at  the  start  of  the  denaturant 
project (in 2011) and this has continued to meet to discuss the developments in that 
area  as  part  of  the  evaluation.  A  stakeholder  network  of  the  various  alcohol 
beverages sectors has also been developed, and regular progress meetings have been 
held  with  each  of  them,  aside  from  their  feedback  through  the  questionnaires  and 
case studies. 

12 http://ec.europa.eu/smart-regulation/evaluation/docs/standards_c_2002_5267_final_en.pdf 

20 

 
 
 
 
 
                                                            
 
APPENDIX 2  

 SYNOPSIS REPORT AND CONSULTATION STRATEGY 

21 

 
 
 
1.  CONSULTATION STRATEGY 

 Appendix 2 – Consultation Strategy 

The evaluation of Council Directive 92/83/EEC has relied, at all stages of its 
implementation, on a comprehensive consultation of all stakeholders impacted by the 
functioning of the legislative act.  

Stakeholders were consulted at each step of the process involving the following 
activities: 
 
 
 
 
 
 

Exploratory interviews 
Fiscalis Seminar with Member States 
Survey to Member States administrations (tax and health authorities) 
Survey to economic operators (and organisations representing their interests) 
Open public consultation 
In-depth interviews in the context of the case studies. 

Although not foreseen as a source of data for the evaluation, a set of ad-hoc 
contributions were also submitted to the study team. In the interest of transparency, 
these are presented in this Appendix. 

This document sets out to describe the consultation strategy employed by this 
evaluation, the stakeholders which have participated, the interests that were 
represented and how they have supported the development of the evidence base for 
this evaluation. In addition, limitations inherent to the consultation are presented.  

1.1  Exploratory interviews 

With the aim to get a first understanding of the different issues linked to the Directive, 
an exploratory interview was conducted with Heather Jones from DG Taxation and 
Customs Union, Unit C2 Indirect taxes.  

The consultants also took part in a Fiscalis Project Group meeting on screen wash, de-
icers and anti-freeze in February 2015. Meetings with relevant economic operators and 
Member State representatives were also conducted. This helped forming a first 
understanding of the issues surrounding the exemption of denatured alcohol from 
different points of view of legitimate stakeholders.  

1.2  Fiscalis Seminar with Member States 

The study team has participated, along with representatives from the Member States in 
a Fiscalis Seminar13 organised in Latvia between the 19 and 21 May 2015. During this 
seminar,  all  provisions  of  the  Directive  which  were  going  to  be  the  subject  of  this 
evaluation  were  discussed  among  the  Member  States  and  have  further  reinforced  the 
study’s direction towards the evaluation of the most pressing issues.   

1.3  Survey to Member States’ Administrations (Tax and Health authorities) 
The methodology of delivery of the questionnaire to Member States has utilised a single 
contact person within each Member State. In most cases, the contact persons (which 

13 Fiscalis 2020  - Workshop on Legal, technical and operational issues related  to the taxation, classification 
and exemption from excise duty on alcohol products - JŪRMALA (LV), 19TH - 21ST MAY 2015 

May, 2016 

  22 

 
 
 
 
 
 
 
 
 
 
 
                                                            
 Appendix 2 – Consultation Strategy 

were assigned by the Member States) are members of the tax administrations, customs 
authorities or ministries of finance of the Member States.  

The contact person within each Member State was asked by the study team to 
coordinate with all relevant departments (including on matters related to health) within 
his/her own Member State when preparing answers to the questionnaire. In order to 
ensure a coherent approach, health authorities of all Member States were informed of 
the on-going consultation and asked to coordinate responses with the tax authorities of 
their own Member State on questions which are pertinent to them.14 

Member States were consulted on the functioning of all provisions and were allowed to 
provide answers in EN, FR and DE. A copy of the questionnaire can be found in 
Appendix 3 – Questionnaire to Member States (EN).  

All 28 Member States have submitted responses to the questionnaire associated 
with the study.  

1.4  Survey to economic operators (and organisations representing their 

interests) 
The survey to economic operators was made accessible on a web-based platform. The 
link to the survey questionnaire was available on the DG Taxud website. It was 
promoted by the EU Commission through a press release, social media and via the 
YourVoice in Europe website. Additionally, an invitation to participate in the survey was 
sent out to a number of stakeholders. In particular, relevant trade associations were 
targeted which then were invited to distribute the survey as widely as possible to their 
members. 

The invitation to the survey included a distribution link guiding respondents to a web-
page where they were invited to enter their e-mail address. Upon completing this step, 
they received, by e-mail, a unique, individual link which could be accessed at any time 
until the entire questionnaire had been completed. Intermediary answers were 
automatically saved, allowing respondents to close and re-open the questionnaire if 
they were unable to complete it in one sitting.  

Through the online survey distributed to economic operators, a total of 323 answers 
(247 complete and 76 partially complete) have been received.  

This section describes and analyses the types of respondents and their coverage of the 
EU Member States. The data has been cleaned and all irrelevant or duplicate entries 
have been excluded from the dataset. 

14 To guarantee that views of health authorities are adequately taken into account, an additional 
questionnaire was sent directly to health authorities who were given an additional opportunity to provide 
individual answers to specific questions pertinent to them, in case they did not have a chance to coordinate 
responses with their tax authorities. 

May, 2016 

  23 

 
 
 
 
 
 
 
 
 
 
                                                            
1.4.1  Sectors of activity 

 Appendix 2 – Consultation Strategy 

General Overview 
The respondents cover the five different product categories provided for in the Directive 
(i.e. “beer”, “wine”, “other fermented beverages”, “intermediate products” and 
“spirits15”),  “producers, distributors and users of denatured alcohol” as well as trade 
associations and federations of the above mentioned sectors. The respondent’s main 
sector(s) of activity is presented in Figure 1 below.  

Figure 1: Respondent’s main sectors of activity (MCQ, N=313) 

0%

10%

20%

30%

40%

50%

Producer of beer

39,0% 

(cid:9)Producer of wine / winegrower

13,4% 

Producer of other fermented beverages

8,6% 

Producer of intermediate products

5,8% 

Producer of spirits

12,8% 

(cid:9)Producer, distributor or user of denatured
alcohol

8,9% 

(cid:9)Trade association / federation

24,6% 

Other

9,3% 

Note: Respondents may select multiple answers and therefore, the percentages shown in the figure exceed 
100%. Source: Survey to economic operators, August-November 2015. 

As the graph indicates, the share of “beer producers” among the participants was 
comparably high, giving the beer sector a strong representation in the survey.  The 
share of “producers of intermediate products” and “producers of other fermented 
beverages”, as well as the share of “producers, distributors and users of denatured 
alcohol” was comparably lower.  

The 29 respondents from the “other” category indicated that they were consultants 
and/or other associations. They were active in different stages of the production chain 
(such as warehouse owners, distributors etc.). Further respondents were producers of 
denaturants or aromas containing alcohol. 

15 Ethyl Alcohol 

May, 2016 

  24 

 
 
 
 
 
 
 
                                                            
Denatured Alcohol Industry 
Economic operators who indicated that they produce, distribute or use denatured 
alcohol were asked to further specify their industry. 

 Appendix 2 – Consultation Strategy 

Figure  2:  Industry  sector  of  producers,  distributors  and  users  of  denatured 
alcohol (MCQ, N=28)16 

0% 10% 20% 30% 40% 50% 60% 70% 80%

Cosmetics, perfumes, and personal hygiene
products

75,0% 

Screen wash, anti-freeze, de-icer products

35,7% 

Bio-fuels

14,3% 

(cid:9)Printing inks, paints and other solvents

21,4% 

Denatured alcohol

Other

35,7% 

35,7% 

Note: Respondents may select multiple answers and therefore, the percentages shown in the figure exceed 
100%. Source: Survey to economic operators, August-November 2015. 

Most economic operators who indicated to produce, distribute or use denatured alcohol 
activate in the sector of “cosmetics, perfumes and personal hygiene products”. 
Relatively fewer respondents have said to be activating in the sectors of “bio-fuels” and 
“printing inks, paints and other solvents”. The ten respondents from the “other” 
category indicated that they were working with “detergents”, “other chemical products” 
and “maintenance products”. 

A number of respondents (11) reported to be active in several fields where denatured 
alcohol is used. The majority of these operated in more than three of the indicated 
sectors. 

All respondents who have indicated to be active within the sectors of “screen wash 
etc.”, “bio-fuels” or “printing inks etc.” also reported to be active either in “cosmetics 
etc.”, “denatured alcohol” or “other”, or they represented a combination of these, being 
active in one or more sectors. 

In sum, the cosmetics industry is strongly overrepresented among the denatured 
alcohol industry which has been taken into consideration in the analysis of the survey 
responses.  

16  This  figure  does  not  include  trade  associations  representing  producers  /  distributors  and  users  of 
denatured alcohol 

May, 2016 

  25 

 
 
 
  
 
                                                            
Trade Associations 
In total, 77 respondents accessed the survey as trade associations or federations. 
Organisations from all relevant sectors replied to the questionnaire.  

 Appendix 2 – Consultation Strategy 

Figure 3: Sector of activity of trade associations (N=77) 

0%

5%

10% 15%

20% 25%

30% 35%

Beer

32,5% 

(cid:9)Wine / winegrower

22,1% 

Fermented beverages other than wine or beer

14,3% 

(cid:9)Spirits

Producers, distributors or users of denatured
alcohol

Other

6,5% 

28,6% 

29,9% 

Note: Respondents may select multiple answers and therefore, the percentages shown 
in the figure may exceed 100%. Source: Survey to economic operators, August-
November 2015. 

The number of participating trade associations for “beer”, “spirits” and “denatured 
alcohol” was comparably higher than the number of associations representing “wine 
producers or growers” and “producers of other fermented beverages”. This is likely due 
to the organisation of trade associations within each sector and the representativeness 
of their respective memberships. 

Some associations (16) indicated that they represented several sectors, including four 
associations of “wine and spirits producers” responded to the questionnaire, and three 
associations of “beer, wine, other fermented beverages and sprits producers”. Other 
combinations were also reported. 

1.4.2  Geographical coverage 

The survey reached economic operators from all EU Member States and presents a 
relatively balanced representation in terms of number of respondents compared to the 
size of the Member State.  

May, 2016 

  26 

 
 
 
 
 
 
 
 
 
Figure 4: Geographical coverage (N=312) 

 Appendix 2 – Consultation Strategy 

Austria
Belgium
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom
Other

0%

5%

10%

15%

20%

25%

9,3% 

13,5% 

7,4% 
7,1% 

4,8% 

9,0% 

8,3% 

5,4% 

7,4% 

6,1% 

6,7% 

9,0% 

5,8% 
5,8% 
6,1% 

4,5% 

21,5% 
21,5% 

13,5% 

13,8% 

18,6% 

8,7% 

7,4% 

11,2% 

10,9% 

7,1% 

14,7% 

2,9% 

22,1% 

Note: Respondents may select multiple answers and therefore, the percentages shown in the figure exceed 
100%. Source: Survey to economic operators, August-November 2015. 

Respondents  who  participated  in  the  survey  and  indicated  to  be  active  in  countries 
other than the EU Member States (“other”) came mostly from other European countries 
such as Norway and Serbia.  

A  majority  of  the  respondents  indicated  to  be  only  active  in  one  Member  State  while 
14.1% were active in two or more Member States. Half of these were operating in ten 
or  more  Member States.  For  every  EU  Member State  the  survey managed  to  reach  at 
least one economic operator of each relevant sector as presented in Figure 5 below.  

May, 2016 

  27 

 
 
 
 
 
 
 
Figure 5: Main sector of activity per Member State (N=312) 

 Appendix 2 – Consultation Strategy 

0%

20%

40%

60%

80%

100%

22% 

6% 

6% 

8% 

17% 

28% 

3% 

11% 

27% 

27% 

8% 

8% 

8% 

12% 

18% 

12% 

8% 

3% 

13% 

3% 

17% 

23% 

10% 

3% 

31% 

3% 

17% 

3% 

10% 

28% 

6% 

6% 

6% 

17% 

24% 

33% 

3% 

7% 

6% 

0% 

Producer of beer

Austria

Belgium

Bulgaria

Croatia

Cyprus

Czech Republic

23% 

13% 

10% 

13% 

13% 

20% 

5% 

5% 

Denmark

15% 

9% 

6% 

9% 

12% 

24% 

15% 

9% 

Estonia

Finland

France

Germany

Greece

Hungary

23% 

5% 

9% 

5% 

14% 

20% 

7% 

10% 

7% 

17% 

36% 

27% 

5% 

5% 

7% 

7% 

28% 

27% 

13% 

4% 

6% 

8% 

16% 

13% 

14% 

11% 

4% 

5% 

12% 

17% 

14% 

11% 

25% 

4% 

13% 

4% 

17% 

29% 

4% 

4% 

27% 

4% 

12% 

4% 

12% 

27% 

8% 

8% 

Producer of wine /
winegrower

Producer of other
fermented beverages

Producer of
intermediate products
(e.g. port; sherry, etc.)

Ireland

14% 

6% 

11% 

8% 

19% 

22% 

8% 

11% 

Producer of spirits

Italy

Latvia

25% 

13% 

6% 

6% 

17% 

17% 

9% 

8% 

22% 

9% 

9% 

4% 

13% 

Lithuania

26% 

4% 

9% 

4% 

13% 

Luxembourg

17% 

13% 

4% 

8% 

17% 

35% 

30% 

29% 

4% 

4% 

9% 

4% 

4% 

8% 

Malta

Netherlands

Poland

22% 

21% 

22% 

11% 

6% 

11% 

11% 

33% 

6% 

0% 

10% 

6% 

6% 

19% 

21% 

10% 

8% 

10% 

10% 

7% 

13% 

16% 

11% 

12% 

Portugal

13% 

22% 

7% 

13% 

16% 

18% 

9% 

2% 

Romania

Slovakia

Slovenia

23% 

6% 

11% 

6% 

17% 

23% 

9% 

6% 

25% 

9% 

13% 

9% 

9% 

22% 

6% 

6% 

28% 

8% 

5% 

3% 

21% 

23% 

5% 

8% 

Spain

12% 

19% 

3% 

10% 

17% 

14% 

15% 

10% 

Sweden

21% 

7% 

7% 

7% 

14% 

29% 

7% 

7% 

United Kingdom

29% 

9% 

14% 

8% 

14% 

8% 

9% 

10% 

Other

25% 

8% 

8% 

0% 

8% 

17% 

25% 

8% 

Producer, distributor
or user of denatured
alcohol

(cid:9)Trade association /
federation

(cid:9)Other

Source: Survey to economic operators, August-November 2015. 

1.4.3  Economic size 

The economic size of the operators in the survey is measured in terms of turnover and 
number of employees. First, average annual turnover of the respondents is shown in 
the figure below. 

May, 2016 

  28 

 
 
 
 
 
 
Figure 6: Average annual turnover (excluding trade associations) (N=232) 

 Appendix 2 – Consultation Strategy 

31,0% 

18,5% 

16,8% 

11,6% 

6,9% 

6,5% 

8,6% 

35%

30%

25%

20%

15%

10%

5%

0%

Below EUR
500 000

(cid:9)Between
EUR 500
000 and
EUR 2m

(cid:9)Between
EUR 2m
and EUR
10m

Between
EUR 10m
and EUR
50m

(cid:9)Between
EUR 50m
and EUR
100m

Above EUR
100m

Don’t 
know / not 
applicable 

Source: Survey to economic operators, August-November 2015. 

Almost one third of the respondents have an average annual turnover of more than 
EUR 100m but also an important number of small producers with a turnover of less 
than EUR 500,000 per year participated in the survey.  

A comparison of average annual turnover of economic operators between the different 
industry sectors is presented in Figure 7. For all categories of alcoholic beverages 
producers on the low, medium and high end of annual turnover participated in the 
survey. The producers, users and distributors of denatured alcohol are represented by 
companies with higher annual turnovers.   

May, 2016 

  29 

 
 
 
 
 
 
Figure 7: Average annual turnover per industry sector (excluding trade 
associations) (N=232) 

0%

20%

40%

60%

80%

100%

 Appendix 2 – Consultation Strategy 

Below EUR 500 000

18% 

26% 

12% 

20% 

14% 

0% 

22% 

Producer of beer

Between EUR 500 000 and EUR 2m

7% 

10% 

12% 

0% 

8% 

0% 

4% 

Between EUR 2m and EUR 10m

10% 

8% 

0% 

13% 

14% 

11% 

15% 

Between EUR 10m and EUR 50m

13% 

18% 

24% 

33% 

25% 

19% 

22% 

(cid:9)Producer of wine /
winegrower

Producer of other
fermented beverages

Producer of
intermediate products

Between EUR 50m and EUR 100m

8% 

3% 

8% 

7% 

11% 

11% 

4% 

Producer of spirits

Above EUR 100m

38% 

28% 

40% 

27% 

25% 

30% 

19% 

Don’t know / not applicable 

6% 

8% 

4% 

3% 
0% 

30% 

15% 

Source: Survey to economic operators, August-November 2015. 

The average number of employees per firm is shown in the graph below. The 
respondents were asked to focus on direct employment within the EU. 

Figure 8: Average number of employees within the EU (excluding trade 
associations) (N=231) 

0% 5% 10% 15% 20% 25% 30% 35% 40%

Between 1 and 9

23,4% 

Between 10 and 50

19,0% 

Between 51 and 250

16,5% 

Over 250

37,2% 

Don’t know / not applicable 

3,9% 

Source: Survey to economic operators, August-November 2015. 

May, 2016 

  30 

 
 
 
 
 
 
 
 
A relative majority of the responding economic operators had very large firms of more 
than 250 employees. At the same time, almost half the economic operators were rather 
small with 50 employees or less.  

 Appendix 2 – Consultation Strategy 

Figure 9: Average number of employees within the EU per industry sector 
(excluding trade associations) (N=231) 

0%

20%

40%

60%

80%

100%

Producer of beer

24% 

13% 

11% 

47% 

4% 

(cid:9)Producer of wine / winegrower

26% 

18% 

29% 

26% 

0% 

Between 1 and 9

Between 10 and 50

Producer of other fermented
beverages

16% 

8% 

16% 

56% 

4% 

Between 51 and 250

Producer of intermediate products

7% 

33% 

33% 

27% 

0% 

Producer of spirits

25% 

22% 

28% 

25% 

0% 

(cid:9)Producer, distributor or user of
denatured alcohol

4% 

19% 

26% 

37% 

15% 

Other

33% 

30% 

11% 

26% 

0% 

Source: Survey to economic operators, August-November 2015. 

(cid:9)Over 250

Don’t know / not 
applicable 

Figure 9 provides a picture similar to the comparison of average annual income per 
industry sector. The producers of different alcoholic beverages covered in the survey 
come from very small firms of less than ten employees as well as from large firms of 
over 250 employees. Also medium sized companies are represented from all beverage 
sectors. The sector of denatured alcohol is represented with companies with low, 
medium and large numbers of employees.  

1.4.4  Consequences for the analysis 

We fully recognise the risk that opinions, views and positions taken in this survey are 
highly subjective. Our approach for analysis, rooted strongly in triangulation (which 
we understand to mean both in terms of sources as well as methods) has taken this 
risk into account. 

The data collected on the background of economic operators has allowed filtering 
answers to the survey based on the industry sector of operators, their size and the 
Member State(s) in which they are active.  

1.4.5  Representativeness of survey sample   

Taking into account the risks presented above, overall the sample size and 
composition is considered rather representative. The respondents cover well the 
May, 2016 

  31 

 
 
 
 
 
 
 
 
 
 Appendix 2 – Consultation Strategy 

different product categories, all countries and the coverage also included a good 
distribution between small and large operators. In this context, we believe that analysis 
performed at EU level and for each sector can be considered sufficiently accurate. 

A main concern is linked to the sector of denatured alcohol, where operators from the 
cosmetic sector are strongly overrepresented. As a consequence it has been decided 
that answers to some questions affected by this cannot be viewed as representative of 
the entire industry of “producers and users of denatured alcohol”. The in-depth case 
study on the exemption of denatured alcohol has collected additional data from a 
balanced sample of interviewees in order to ensure that all different sectors of 
producers and users of denatured alcohol are included.  

1.5  Open Public Consultation 

In parallel to the survey to economic operators, an open public consultation has been 
conducted. Everybody accessing the survey to economic operators was also informed of 
the open public consultation. Consumers and other types of stakeholders not covered 
by the targeted survey to economic operators were re-directed to the open, public 
consultation. 

The  public  consultation  was  promoted by  the Commission  through  a press  release,  on 
the  Commission’s  “Your  voice  in  Europe”  website  as  well  as  through  online  media 
platforms (Twitter and Facebook).  

A  link  to  the  questionnaire  was  available  on  a  dedicated  page  on  the  website  of  DG 
TAXUD.  In  addition,  while  promoting  the  survey  to  economic  operators  and  the 
questionnaire to Member States, reference was made to the public consultation.  

The public consultation was open to responses between August and November 2015. In 
total, the questionnaire was accessed 759 times (simple access to the survey is 
indicated as “distributed” in Figure 10 below). Out of these, 328 participants provided 
partial or complete responses.  

Figure 10: Participation to the public consultation (N=759) 

0%

10%

20%

30%

40%

50%

60%

Distributed

56,8% 

Partially Complete

23,1% 

Complete

20,2% 

Source: Public consultation, August-November 2015. 

May, 2016 

  32 

 
 
 
 
 
 
 
 
 
 
 
Access to the public consultation was provided through a direct link. Participants were 
not required to indicate their e-mail address. They were asked about their status17, 
about their Member State and were asked to name their organisation/ entity/ company. 
The results to these questions are presented in the following.   

 Appendix 2 – Consultation Strategy 

1.5.1  Types of participants 

Half of the participants to the consultation were citizens and consumers. Further groups 
of participants included SMEs and national organisations.  

Figure 11: Types of participants to the public consultation (N=328) 

0%

10%

20%

30%

40%

50%

60%

Citizen / Consumer

Multinational enterprise

Large company

3,7% 

4,0% 

49,4% 

Small and medium sized enterprise (SMEs)

National Association

European Association

3,4% 

12,8% 

11,3% 

Non-Governmental organisation (NGO)

6,7% 

Tax advisor or tax practitioner

2,1% 

Academic

2,1% 

Others, please specify

4,6% 

Source: Public consultation, August-November 2015. 

1.5.2  Geographic coverage 

Responses to the public consultation were received from all Member States except for 
Hungary and Estonia. However, from many Member States less than ten responses 
were received. With almost 20% of the responses, Belgium has a particularly high 
participation (this may be due to the concentration of relevant associations in the 
Brussels region). Together, the six Member States with the highest participation unite 
almost 70% of the responses.  

17 Citizen / Consumer, Multinational enterprise, Large company, Small and medium sized enterprise (SMEs), 
National  Association,  European  Association,  Non-Governmental  organisation  (NGO),  Tax  advisor  or  tax 
practitioner, Academic 

May, 2016 

  33 

 
 
 
 
 
 
 
 
                                                            
Figure 12: Geographic coverage in the public consultation (N=328) 

0%

5%

10%

15%

20%

25%

 Appendix 2 – Consultation Strategy 

19,5% 

13,1% 

7,0% 

10,4% 

0,6% 

1,8% 

0,9% 

0,3% 

0,3% 

0,6% 

0,0% 

1,5% 

Austria

Belgium

Bulgaria

Croatia

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

0,9% 

Hungary

0,0% 

Ireland

Italy

Latvia

Lithuania

Luxembourg

1,5% 

0,6% 

1,2% 

0,9% 

Malta

0,3% 

Netherlands

2,1% 

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

7,9% 

3,4% 

0,3% 

0,9% 

2,4% 

2,7% 

5,8% 

United Kingdom

11,0% 

Other, please specify

1,8% 

Source: Public consultation, August-November 2015. 

1.5.3  Consequences for the analysis 

Analysis  of  the  answers  to  the  public  consultation  and  treatment  of  data  has  followed 
the  Commission  Rules  on  public  consultation,  as  inscribed  in  the  better  Regulation 
Guidelines18. 
The analysis took into consideration the type of respondents and/or the country of 
origin in order to make a judgment whether any patterns (or diverging views) can be 

18  SWD(2015)  111  final,  Better  Regulation  Guidelines,  Commission  Staff  Working  Document,  Strasbourg, 
19.5.2015; See http://ec.europa.eu/smart-regulation/guidelines/ug_chap7_en.htm for additional information 

May, 2016 

  34 

 
 
 
 
 
                                                            
 Appendix 2 – Consultation Strategy 

observed. Any views diverging strongly from the 'mainstream' views have been clearly 
identified. 

The results of the public consultation are also presented, in full, in an appendix to the 
main report (summary report) and the answers of those respondents who have given 
their consent to do so are published in full.  

The results of the public consultation are used as an additional source of data, distinct 
from all other sources as input to the evaluation in strict accordance with the 
triangulation principle.  

1.6  Ad-hoc contributions 

In  the  context  of  the  survey  to  economic  operators  and  the  public  consultation  a 
number of stakeholders decided to send additional written input to the study team. In 
total, 19 written contributions were received.  

Of  these,  16  referred  to  the  survey  to  economic  operators:  associations  of  the 
different industry sectors sent these contributions:  

 
 
 
 
 

Two contributions from the “Brewers of Europe” (beer) 
“Campaign for Real Ale”, (CAMRA) (beer) 
“Polish Council for Winemakers” (wine) 
“Rola” – a wine and liquor distillery (wine and spirits) 
“Comité National du Pineau des Charentes” (intermediate product) 

The others were from associations from the denatured alcohol sector:  

“Bulgarian  National  Association  of  Perfumery  and  Cosmetics  and  Essential  oils” 

“Cosmetica Italia” (cosmetics) 
“ 
“ 
“ 

Cosmetics Europe” (cosmetics) 
Fédération des Entreprises de la Beauté” (FEBEA), (cosmetics) 
Irish  Cosmetics,  Detergent  and  Allied  products  Association”,  (ICDA) 

 
(cosmetics) 
 
 
 
 
(cosmetics) 
 
 
 
“RUCODEM” (cosmetics) 
“Federal  association  of  the  German  bioethanol  producers”  (“Bundesverband  der 

“ 
“IKW Schoenheitspflege” (cosmetics) 
“ 

International Fragrance Association”, (IFRA) (cosmetics) 

Johnson and Johnson” (cosmetics) 

deutschen Bioethanolwirtschaft”) (bioethanol) 

The  three  written  contributions  to  the public  consultation  came  from  associations 
of doctors and dentists: 

 
 
 

British Medical Association” (BMA) 

“ 
“Council of European Dentists” (CED) 
“ 

Standing Committee of European Doctors” (CPME)  

May, 2016 

  35 

 
 
 
 
 
 
 
 
 
 Appendix 2 – Consultation Strategy 

1.7  In-depth interviews in the context of the case studies 

In the context of three of the case studies (i.e. classification, denatured alcohol and 
exemptions for private consumption)19, the methodology has foreseen the completion 
of in-depth interviews. This has entailed the following:  

1.7.1  Case study on classification 

All Member States who have reported difficulties in classification have been invited to 
participate (invitations to 18 Member States were sent). In order to balance this view, 
we have invited an equal number of economic operators to participate in interviews on 
the same topic. Economic operators participating at this stage were chosen at random 
from those operators which have answered “yes” to the following questions in the 
survey: “Have you encountered any difficulties with the classification of your products” 
and “Have you ever come across products which were packaged to look like their 
equivalent higher strength spirits but otherwise were characterised by lower strength 
and/or lower price than the equivalent products in the higher tax band?”  

A full list of respondents is included in the final version of the case study report. 

1.7.2  Case study on denatured alcohol 

In the context of the case study, a total number of twelve interviews were conducted 
with producers and users of denatured alcohol. Interviewees were identified among the 
participants to the survey with the aim to cover all different sectors of the industry (i.e. 
producers of denatured alcohol, cosmetics, screen-wash, biofuels and printing inks). As 
not all of these sectors were covered in the survey, additional interviewees were 
identified through desk research and referral of other interviewees.  

A full list of respondents is included in the final version of the case study report. 

1.7.3  Case study on exemptions for private consumption 

In  the  context  of  this  case  study,  stakeholders  from  five  Member  States  were 
interviewed: Romania, Hungary, Sweden, Austria and United Kingdom. Tax and health 
authorities,  industry  representatives,  as  well  as  academics  in  the  field  of  alcohol  and 
drugs research were interviewed.    

A full list of respondents is included in the final version of the case study report (to be 
submitted with the final report). 

19 The case study on reduced rates entailed only an analysis of economic data. 

May, 2016 

  36