Brewers are struggling to swallow proposals to increase taxes on alcoholic and sweetened drinks under France's latest budget, currently being debated by parliament. While supporters say the measures would raise much-needed funds for the French health system, beer makers warn they could end up penalising independent breweries already finding it tough to survive.
Under pressure to reduce France’s mammoth deficit, the new government is looking for ways to save billions of euros on social security – and raising duties on potentially unhealthy food and drink looks set to be part of the plan.
Members of parliament have proposed amendments to the funding bill that would target alcohol and processed sugar, and specifically high-strength, sweetened beers.
The farthest-reaching proposal would expand the “social security contribution” levied on certain products and allocated to funding national health insurance. Currently applied only to drinks with an alcohol content of 18 percent or more, the revised tax would be collected on all alcohols, including wine and beer.
Another amendment would see a new duty introduced on beers stronger than 5.5 percent, while a further proposal seeks to tax flavoured, sweetened beers containing the equivalent of at least 20 grams of sugar per litre.
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Brewing backlash
Parliament’s social affairs committee has already approved the proposals, which MPs are now debating before a vote on the budget bill next week.
Proponents argue they would help prevent excessive alcohol consumption – especially among young people drawn to sweet, strong drinks – as well as financing the health system that treats the fallout.
Health Minister Geneviève Darrieussecq has expressed support for a sugar tax, telling La Tribune that manufacturers have “a collective responsibility, and I would like to see them find solutions to change their recipes”.
She stressed, however, that “it’s not about penalising craftspeople”.
The brewing industry disagrees, with unions warning that extra taxes could drive up costs and put hundreds of companies out of business.
Jérôme Gervais, who runs micro-brewery Brewbaix in the northern city of Roubaix, estimated that the extra levies would add 70 cents to the retail price of its bottled lager, taking it to 6 euros for 75cl.
Speaking to BFMTV, he questioned: “Will consumers be prepared to pay that much to enjoy their beer?”
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Industry protests
A levy on stronger beers would “protect and promote industrial beers” at the expense of craft brews, which tend to contain more alcohol, said Jean-François Drouin, president of the National Union of Independent Breweries (SNBI).
Industry association Brewers of France argued the combined new taxes would “definitively compromise the economic viability of breweries” throughout the country.
In an industry already struggling to absorb higher energy prices and raw material costs, one brewery shuts down every week on average, the group said, and added tax “would amplify this phenomenon”.
If the lower house of parliament approves the proposals, they will next be reviewed by the Senate. Some brewers told the press they were urging their local MPs to vote against them, warning of the impact on local jobs.
Makers of non-alcoholic energy drinks, chocolate, ice cream and other products that risk being affected by any new levies on processed sugar have also protested, while Agriculture Minister Annie Genevard cautioned against placing extra burdens on French companies competing in global markets.
