UK booze prices could be slashed

EC tax changes may harmonise duty levels across the continent

Beer and wine prices could be slashed in Britain if tax changes being planned in Brussels are given the go-ahead.

The plans, which are being drawn up by the European Commission, are part of recommendations intended to stamp out alcohol smuggling.

Britain has some of the highest excise rates for beer, wine and spirits in the European Union, but the plans being finalised by commissioner Frits Bolkestein could cut them dramatically.

The proposals are due to be made public in the next few weeks but already insiders are hinting that the commissioner wants to harmonise tax by lowering duty levels in high-tax countries such as Britain and Sweden, and increasing the duty in low-tax countries such as France and Spain.

However, chancellor Gordon Brown and the UK Government are expected to fight the plans.

A spokesman for the Treasury said: "We are opposed to the harmonisation of taxes."

In July, Customs and Excise minister Paul Boateng (pictured) told thePublican.com that the Government had no intention of cutting duty.

He said high taxes did not cause smuggling and announced extra government spending to clamp down on smugglers at Channel ports.

However, the new approach to smuggling, which led to about 250 vehicles being confiscated every day at the height of summer, ran into unforeseen trouble when an EU investigation pronounced it "heavy-handed".

The EU has now written to the British Government about its approach to alcohol and tobacco imports (EC takes legal steps against Custons (26 October 2001))

Smuggling is estimated to cost the pub trade £150m every year and research suggests high duty rates, compared with those in nearby France and Spain, are to blame.

The industry has welcomed news of the EU's involvement. Georgina Wald, spokeswoman for the British Institute of Innkeeping, said the EU action could force the Treasury to rethink its policy on duty.

She said: "The Government is going to have to look at the wider issue, because the situation is becoming farcical."

Related news:​

Bootlegging clampdown hit by legal block (04 October 2001)

EU plans to close duty gap (27 September 2001)

Customs hits trade in Calais (30 August 2001)

Customs continues to clamp down on "booze cruisers" (31 July 2001)

Boateng rules out cut in duty (6 July 2001)

New strategy to tackle bootlegging (29 June 2001)