Protest brews over hefty EC alcohol tax
A hefty tax hike on certain fruit-based spirits is spawning a revolt among local officials in wine-rich southwestern France. The levy is also developing into a showdown between the powerful alcohol industry and the central government, which plans to use some of the revenues from the levy to combat rampant alcoholism.
The impending tussle is likely to be watched by other nations around the world plagued with similar drinking problems.
The nearly 50 percent tax boost raises the domestic price of fruit-based spirits such as cognac and Armagnac. It was imposed at the insistence of the European Community.
Already it has provoked an "administrative" strike by 330 mayors in the sundrenched southwest, home of the fruity spirits. But an even greater battle is shaping up between the French government and the alcohol industry. One out of every 10 Frenchman is financially dependent on the industry, which generates a national income of $10 billion a year.
Yet the administration has accepted a 10-year program aimed at sobering up the nation. With an average annual pure alcohol consumption of 16 liters per adult, the French drink twice as much as the British and a fifth more than the West Germans and the Italians.
Alcohol plays an important part in most acts of violent crime in the country and in a quarter of its traffic accidents and suicides.
Drunkenness costs the national economy over $4 billion a year in lost industrial production as well as in medical expenses and its claim on social security.
The national antialcoholism program prescribes stiff tax increases on drink, and controls on advertising and sales promotion.