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France hikes beer tax while French spurn beer

French government has proposed a controversial tax hike on beer in supermarkets and restaurants, while a study has revealed France is one of the smallest consumers of beer in Europe.

Published: 2 October 2012 10:45 CEST

France comes second to last in the study for consummation of beer, with the average French person drinking 30 litres per year.

The study, lead by Brasseur de France, looked into beer drinking across several European countries in 2009, and found the Czech Republic drank the most at 135 litres per year. Germany is second at 107 litres.

Wine is France’s most popular tipple, making 59 per cent of all alcohol drank. Beer only makes 16 per cent and spirits 25 per cent.

The beer market has also been in decline for the past 30 years – in 2010 alone the industry saw a 1.7 percent decline on the year before.

Meanwhile, the French government has proposed an excise tax on beer 2.5 times higher than it currently stands, which is expected to bring in €480 million to the social security system.

Brasseur de France calculate this will mean a half pint of beer going from €2,50 to €3, and a pack bought in a supermarket will jump from €10 to €12.

Pascal Chevremont, the general director of Brasseur de France, said: “People will only have one round instead of two. Or worse, more and more we will see people buying beer from supermarkets.”

After the last increase on beer tax in 1997, the French beer market saw a dip of 7 percent in sales.

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Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance?

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes.

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner.

How did the government agree to change the employment allowance in its coalition deal?

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment allowance to 12.75 percent up to a maximum rebate of 53,600 kroner.

How might this be further increased, according to Børsen?

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance.

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement.

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.

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