Vol. 500 No. 1
195 Mr. Lawlor asked the Minister for Finance if he will consider the case for reviewing excise duties on beer production with a view to basing these duties on levels of production by each brewery thereby providing the new microbrewers with a more equitable basis for competition with the major players in the industry (details supplied). [3254/99]
Irish excise duties do not discriminate between large and small breweries and the tax system is not a source of competitive distortion. In addition, the excise duty on beer was last increased in the January 1994 budget. So, in effect, the industry has been advantaged by a relative decline in the share of its price which is attributed to tax.
Under Article 4.1 of Council Directive 92/83/EEC, member states may apply reduced rates of duty, which may be differentiated in accordance with the annual production of the breweries concerned, to beer brewed by independent small breweries within the following limits: the reduced rates shall not be applied to undertakings producing more than 200,000 hectolitres of beer per year; and, the reduced rates, which may fall below the minimum rate, shall not be set more than 50 per cent below the standard national rate of excise duty. A few member states with traditional small artisan brewing sectors avail of this provision.
Any proposed low or staggered regime would also have to apply to imports of beer produced in small brewereis in other member states in accordance with the provision Article 4.3 of Council Directive 92/83/EEC. Beer excise duty is a specific tax which does not increase in relation to the value of the product. Thus a higher priced premium "craft" beer bears the same amount of duty as a mass produced product of the same strength and, accordingly, a lower tax share of price than that of a mass produced project. The share of price represented by total tax, including VAT, has declined from 37.6 per cent in 1994 to 35.6 per cent in 1998.
