Czech Republic says 'No' to beer tax hike

The Czech Republic has blocked an EU Commission proposal that would have seen a 4.5 percent hike on taxes on alcohol including beer. That is something that would no doubt have a major impact on the Czech Republic as a major producer and consumer: here, beer is considered a national product. On Tuesday, Finance Minister Vlastimil Tlusty indicated the decision to veto wasn't just about raising taxes alone but overall fairness since, for example, wine producers' products are largely exempt. He said that the proposed hike left beer brewers at a disadvantage.

Jan Vesely
Earlier I spoke to Jan Vesely the director of the Czech Beer and Malt Association to get his view on the matter.

"We are very glad it has happened. First of all, it is not only about excise taxes on beer itself, it's a question of 'distortion' in excise taxes that has existed for decades. The distortion between beer and wine has finally been put on the table and the answer was: when part of the project does not include excise taxes for wine, no increase in taxes for will be agreed."

You could argue that the 4.5 - compared to the original 31 percent suggested by the European Commission - wouldn't really have affected on the Czech Republic anyway.

"Yes, 4.5 percent is very small but as I said the purpose of all the disputation is distortion and by that count any increase, if it's not connected with wine, is wrong. Even a small increase.

"Also, bear in mind that the proposal was complex: that means a 4.5 percent increase now, but an automatic increase every three years, which in accumulation would be more than the proposed 31 percent."

Would you agree with the finance minister's words that beer truly is a national product?

"You know, as France is automatically connected with wine, it's their national pride and part of their national history and heritage, the same position is held by beer in our culture."