This is a definitions section and it seems to define everything except brewers droop. Perhaps the Minister would tell a knowledgeable beer man like myself what spruce beer is, and if we ordered it tonight would we be likely to get it?
SECTION 84.
Question proposed: "That section 84 stand part of the Bill."
It is a current definition of an old beer. It is not commonly used any more but it is there from the old times. It is brewed legally but out of action nowadays.
Is it available?
It is part of a comprehensive definition of beer that is there over a time.
Are there any recognised commodities available?
It is not in consumption nowadays, it is part of the old comprehensive definition of beer.
On line 37, page 116, does the definition of "package" include plastic bottles or is a bottle, by definition, glass?
Yes, it does.
On the definition of worts, does this mean the liquid which is fermented to produce a beer? There is a whole chapter in the Bill about putting the excise duty on beer rather than on worts, is that the key to it?
It is a change in the process of charging excise duty at the pre-fermentation stage rather than the post-fermentation stage. That is what the whole section is about, changing the traditional structure from pre-fermentation to post-fermentation. The entire mechanism has changed and the taxation process is now on a post-fermentation basis.
In so far as it is drafted, is it neutral as to the level of excise? Will the change be made in a manner which will apply the present rate of excise pro rata on beer to what it is on worts at present?
That is a budgetary matter for consideration later.
Has the Minister made any change to this year's budget?
No.
But, obviously, it can be varied in subsequent budgets?
It will apply from a specific date under ministerial order. Discussions at EC level are taking place in regard to how this process will work. While it is not agreed, as this is a budgetary matter, but presumably the date on which we apply that order will be when the matter is resolved at EC level.
It is clear from the Explanatory Memorandum that it is because of harmonisation in respect of the Internal Market that the Minister proposes to change the system; but if we have been operating a system dating from 1880, which presumably is the same as the system operating in the UK and, perhaps, in some other member states, what is the logic of moving to this system and what countries currently operate it in the Community?
The purpose of the Chapter is to provide for a system for the charging of excise duty on beer by reference to the finished product. At present, duty is charged at an early stage in the production process on the quantity and gravity of the unfinished beer, worts; this system dates from 1880. The change is necessary to comply with EC Internal Market proposals in this area. While the EC Directive providing for the new regime is still to be adopted, no disagreement remains on those elements relating to the form of duty charged for beer. Early enactment of the framework legislation is considered necessary to enable trade interests to plan for the new system. Discussions are taking place between the Revenue Commissioners and the trade with a view to agreeing the detail of the system. This will be set out in regulations to be made later and the new regime will not take effect until activated by ministerial order. In relation to whether other countries are using the system at present, the UK have already a law in place but have not activated it.
Is this a prevailing continental system that operates in other parts of the Community to which we are harmonising, because obviously the taxation of beer is something of historic duration in all member states, or is it some new format that is being applied to all countries for purposes that relate to its production?
Some member states already apply this system.
What member states?
Countries that have got the worts system at present are Belgium, Italy, Luxembourg, and the Netherlands; the UK and this country must implement an order to his effect. Under the Internal Market arrangements, all countries must move to this system in due course.
I am probably being over cautious, but because we are changing to a system that currently prevails elsewhere in the Community are we putting our own domestic producers at any disadvantage as a result? Is it simply a different point in the process at which the excise duty becomes payable, after fermentation rather than before?
That is correct but, because it is a traditional method that has much historic importance in St. James's Gate, it is important to negotiate with them. I know, as does Deputy Noonan from his experience as a good beer drinker — and I am not sure about Deputy Quinn — there were old practices involved in his. The wastage in a barrel of beer, what was known in the old days in this city as "the slops", was all part of the system. I do not know how that will be dealt with in the negotiations. A supplier allowed a certain number of pints per barrel as wastage because of that system. That is my knowledge from St. James's Gate, not necessarily my knowledge from this section, but I do not think there have been any developments as yet. I am sure it will be considered as part of the discussions because that allowance has decreased significantly in recent years. There was far more wastage with the old gas system than with the more modern day freezer gas system. I do not believe the same wastage per barrel is permissible at present, but I am sure the new system will have some effect.
As I come from a Border county, I am particularly interested as to what might happen if we introduce this Directive now. If the UK do not introduce if for some time, will that encourage smuggling across the Border? I take the point about the internal markets being dismantled, but is there some implication that would cause problems at a later stage?
The proposed target date for the changeover to end-product taxation on beer is 1 January next and, although the relevant directive has yet to be adopted, we are working towards that date. A number of other member states are currently operating that system of beer taxation. In preparing for the changeover, the Revenue Commissioners will continue discussions with the breweries. The transition date will, naturally depend on the adoption of the directive on resolving the many technical issues about which we just talked and one is the problem the change will pose for the breweries. We must keep the competitiveness of Irish breweries in mind in this process. It was agreed that by the end of June or early July we would try to resolve all these internal matters because they will have to be ready for the second Finance Bill. It was agreed at the ECOFIN Council that we will try to resolve these issues so that the preparatory work will be ready for the autumn. A great number of issues still have to be dealt with. My concern about them is that the sooner we signal them the better because if they are to be effective from 1 January 1993 it is important that the industry knows about them as quickly as possible. The transition date is likely to be late July. The idea is that the ECOFIN Council would meet as soon as the national parliaments have gone into recess and continue until the work is finished. It is not something we can adjourn until after the holiday period in August.
What way is it shaping up at present? There was a point in the debate where the northern beer countries were in conflict with the southern wine drinking countries. The northern countries wanted to preserve the yield to the Exchequer and argued to harmonise up and the southern wine drinking countries argued that we should harmonise down. What is the general indication at present?
That is still a live issue. The aim is to move towards a minimum rate basis, but I do not think there will be harmonisation. As the beer industries are important in the northern countries, the wine industry becomes panic stricken if anything is mentioned regarding the sale of wine in the southern states. I would be even more concerned about discussing that in mid-July, I would prefer to discuss it in January. I believe there will be a move towards a minimum rate basis rather than harmonisation.
Minimum rates with top-ups at the discretion of individual countries, is that correct?
A number of countries are still arguing that they should have an input.
Will there still be volume restrictions on free movement?
No, the volume restrictions will be gone.
Can one bring in 20 cases of wine?
If one wanted to bring in 20 cases of wine and four kegs of beer, once one can prove it is for one's own consumption there should be no difficulty. That is the point. After 1 January, if you come back from your holidays with your car loaded down with drink——
You will have to conceal it from your doctor.
We should not have interfered with the cooperatives this morning, there is obviously potential there for people to get together.
I see a great future for cohesion.
The duty free allowance will be 800 cigarettes, 200 cigars, one kilogram of tobacco, ten litres of spirits, and 20 litres the intermediate products. The allowance for wines will be 45 litres and 55 litres for beer. Once it can be proved to Revenue that it is for private consumption, there should be no problem.
Question put and agreed to.
Section 85 agreed to.