There have been suggestions that this week’s cut in beer duty may be judged illegal under European law, as it supposedly discriminates against wine in relation to beer, but I have to say I’m not entirely convinced. The 27 countries of the European Union have widely differing duty regimes on different types of alcoholic drinks, both in absolute terms and relative between categories. 15 of the 27 countries – all, obviously, wine producers – levy no duty whatsoever on table wine, while wine duty in France is negligible.
France recently imposed a swingeing hike in duty on beer (which is mostly imported) while leaving that on wine (which is mostly home-produced) untouched. In the past, there have been several occasions when the British Chancellor has frozen spirits duty while raising beer duty, and in 2010 Alastair Darling imposed a 10% increase in cider duty which was subsequently cancelled after the General Election.
Given the huge disparities in duty rates that currently exist between countries, and the many precedents for altering the relative duty rates between different categories, I can’t really see that this suggestion has a leg to stand on. Also, as I pointed out here, prior to the Budget the level of duty paid per unit of alcohol on wine and beer was pretty much identical, so it’s hard to see how there was any discrimination in the tax system.