French senator seeks support for wine tax increase

French Senator Yves Daudigny is looking for support for a new tax on wine sold in France.

Daudigny (pictured) caused international protest last October for his championing of a 300% tax increase on palm oil, known as the Nutella Tax.

The wine tax would be the latest in a series of taxes aimed at the drinks industry. Spirits have been taxed in France since October 2011, and a beer tax was introduced in October 2012.

The wine tax would be brought in during the annual tax reforms, aimed at raising funds for social welfare programmes and targeting health-related products, from tobacco to saturated fats to alcohol, so would be expected in October 2013.

The health lobby, in agreement with Daudigny, points out that levels of alcohol in drinks should be taxed, rather than specifically targeting either spirits or beer.

Wine is the most consumed alcohol in France, accounting for 59% of alcohol consumption, compared to 16% for beer and 25% on spirits.

Audrey Bourolleau, director general of lobbying group Vins et Société, told Decanter.com the wine industry in France contributed €7.6bn to the French economy in 2012, and is responsible for over 500,000 jobs both directly and indirectly.

‘There is no evidence that the taxes raised on spirits has had any impact on consumption. What happens instead is that vulnerable drinkers go to cheaper brands of worse quality, and there is a corresponding rise in cross-border smuggling from countries with lower taxes.

‘It is too early to see the effect with beer, but we expect the same findings. But we absolutely refute the idea of raising a tax on wine by linking it to health issues. It is unthinkable in the land of the French Paradox, and would have an extremely negative impact on the image of French wine abroad.’

The proposed tax is modest, with figures of €0.30-€0.60 per bottle of wine being discussed, compared to €1.90 per bottle for spirits.

Wine is currently taxed at €0.04 per bottle. Beer is currently taxed at around €0.36 per bottle. If wine was taxed in line with beer, it would raise between €1.3 and €2.7bn annually for the state.

‘There are other ways to raise taxes, such as VAT, that could be discussed separately,’ said Bourolleau. ‘What we refute is the link with health. It is simply inadmissible.’

A spokesman for the Senate said, ‘Senator Daudigny does not wish to respond to interviews. No decision has yet been taken on this tax, and a period of evaluation is under way.’

If a vote is approved it would then be considered by the lower house, the National Assembly, before passing into law.

Written by Jane Anson in Bordeaux