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Czech Republic blocks EU alcohol tax boost in defense of beer

The Czech Republic blocked a EU proposal to boost taxes on beer and liquor, refusing any increase while wine remains untaxed in some countries.

Czechs are the world's top beer consumers, downing 156.5 liters (41.3 gallons) on average per person in 2005, according to the Czech Brewers Association. „We disagree with a disadvantage for a typical Czech product,” Finance Minister Vlastimil Tlusty said to reporters at a meeting of EU ministers in Brussels yesterday. „Every country was defending its own product and own consumption.” The European Commission, the EU's executive agency, and the Finnish government, holder of the bloc's rotating presidency, had sought agreement on an increase in minimum excise taxes on beer, liquor and medium-strength alcohol drinks such as fortified wine.

The EU can only pass tax laws by unanimous agreement. Tlusty said officials would study the excise tax issue and how it affects consumption, in search of a compromise next year. Most countries would have been untouched by the proposal since they already charge more than the EU floor. Yesterday's proposal would have adjusted the minimum tax rates for inflation since 2004. Germany backed the Czech Republic in opposing an original proposal that would have added about 1 euro cent to a half liter of typical lager.
The finance ministers did agree on a boost in duty-free allowances for travelers entering the 25-nation EU, Austrian Finance Minister Karl-Heinz Grasser said to reporters. Airline passengers and sea voyagers can now bring in as much as €430 ($566) worth of goods. People coming by land will get a limit of €300, as insisted by some countries on the EU's external borders. The previous limit was €175 for all types of travelers. (Bloomberg)