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Oct 25, 2014

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French tax threatens Belgian brewers

Duty on high alcohol Trappist beers adds $1.60 per 750ml bottle

Jan 22, 2003 - The Belgian government has rallied behind its brewers, who are threatened with lower sales because of a tax on higher alcohol beers imposed by by French officials.

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"The French are playing tricks on us," said Father Omer, a monk who brews the popular Chimay Trappist ale. "But, of course, we still love them."

The French government instituted the steep tax on beers with over 8.5% of alcohol content beginning Jan. 1. The higher tax has reduced sales in Belgian brewers' prime export market and jeopardized the future of several microbreweries.

"I see nothing good coming from this kind of trade war," said Belgian Foreign Trade Minister Annemie Neyts, arguing France was trying to curb the growth of Belgian specialty beers on its market at the expense of local beverages. "Too bad they have gone down this road." The Belgian government has approached the European Union to check if the tax complies with EU fair trading rules.

France said the tax plan of adding two euros ($2.10) in taxes per liter of strong beer is an attempt to counter alcoholism, but Neyts sees it as protectionist since France itself does not produce beer as potent. "Why does the measure only apply to strong beer and not on wine which has a much higher alcohol content and consumption?" she asked. "It is a piece of French logic which will need some explaining."

The Belgian say some microbrewers surviving on narrow profit margins could be pushed into bankruptcy. More than two dozen brewers across Belgium are directly affected by the tax plan. "For the small brewers, it is a catastrophe," said Father Omer.

The tax could cost Chimay, the biggest exporter of the strong beer, about 125,000 euros ($130,000) a month — with far-reaching effects. To be labeled Trappist a) beer needs to be brewed at the abbey, b) production must be overseen by monks, and c) a majority of all profits go to good causes. Father Omer said Chimay's profits go to projects as scattered as India, Congo and the poor in Belgium's southern Hainault province, where the abbey is based.


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