Europe’s Brewers Call For Level Playing Field in EU-US Trade Talks
Having been tabled during the 3rd round, Europe’s brewers are calling for a level playing field on tax relief for small brewers to be included in negotiations at the 4th round of TTIP talks between the EU and the US this week. Currently small US brewers exporting to the EU are eligible for the reduced tax rate both in the US and the EU, whilst a European brewer exporting to the US gets no such break.
Just as small brewers from the US can receive significant discounts when exporting to the EU, the ambition is that small brewers from the EU benefit from the same discount in the US as the domestic brewers. In theUS, whilst the larger breweries pay a federal excise tax of $18 per barrel, small brewers pay just $7 per barrel on the first 60,000 barrels they brew.
Research from Ernst & Young and Regioplan published in February 2014 showed that the $100 billion US market is the largest export market forEurope’s brewers, with 26 out of 28 EU countries exporting there. Based upon the 2 million US barrel threshold, the majority of Europe’s 4500 breweries could be eligible for the same level of discount as domestic US brewers.
The discriminatory excise duty system in the United States, whereby only domestic breweries can benefit, currently disadvantages the 250 or so small European breweries that already export to the US. And it also discourages hundreds more European beer brands from entering the market, the higher excise duty for imported beers damaging European brands’ export potential.
A levelling of the playing field is likely to be of particular benefit to low-volume, high value exports and make a major difference in the viability of European exports, which already sell at a premium. The move is likely to give a boost to EU exports, be relatively low cost to theUS, enhance consumer choice for American beer drinkers and encourage greater collaboration between trade partners on both sides of theAtlantic.
Furthermore, with 2 million jobs already created by beer in Europe and over €50 billion in value added to the EU economy annually, and with the European Commission expecting the TTIP to result in more jobs and growth, bringing down non-tariff barriers such as this can help Europe’s brewing sector play a key role in Europe’s recovery.
The call has received strong backing from brewers across Europe, especially in Belgium, the Czech Republic, Italy and the United Kingdom.
