Meeting of spiritsEUROPE in Athens: Over-taxation blocks any development perspectives of the spirits sector
-The prosecuting authorities have dealt a serious blow to smuggling which is fed by high taxation financing the organised crime
- The crucial role of spirits to the connected sectors of food, entertainment and tourism
Athens, 10/6/2016. – The Association of European Spirits Producers (SpiritsEUROPE), which is the European representative body for producers of spirit drinks, successfully completed the works of its General Assembly on Tuesday 7/6/2016. In the context of the General Assembly, which was held in our country this year, a closed panel was organised in the presence of the most significant spirits producers/distributors and the participation of international speakers as well as representatives of the Public Administration and the business world of Greece in particular. The main conclusions include that removing the distortions in the market, mainly the over-taxation, which is depicted in the fact that Greece is in the 1st place among the ΕU-28 countries in terms of the level of the Excise Duty on spirits in relation to the available income of citizens, could «unlock» the growth dynamics of a sector that would significantly contribute to the public revenues (>900 mil. euros) and the employment (>21.000 job positions). Moreover, it was stressed that it is important to establish synergies with directly connected sectors, mainly tourism, that would enrich and promote the touristic product.
Welcoming the meeting participants, Mr. Is. Revah, President of the Hellenic Association of Drinks Distributors (ENEAP), Mr. N. Kalogiannis, President of the Greek Federation of Spirits Producers (SEAOP) and Mr. E. Kalousis, President of the Federation of Hellenic Food Industries (SEVT) spoke of the significant role that the food and beverage sector in total could have towards growth at this given time, through the improvement of the competitiveness, the enhancement of the extroversion and the promotion of investments.
In his official welcome speech, Mr. T. Alexiadis, Alternate Minister of Finance, mentioned that the over-taxation of spirits has led to a reduction of their legal demand and underlined that the combat against smuggling is a primary commitment of the Government.
The discussions in the first two panels focused on the responsible drinking of alcohol as a part of a healthy lifestyle by presenting scientific data that establishes policies on alcohol targeting the damage and not the consumption.
The last panel, especially devoted to the Greek environment, showed that the result of the successive tax charges on spirits over the last years (+125% in 2009-2010) was a shift of part of the consumption to other categories with lower tax rate and the increase of the cross-border purchases and the smuggling of mainly unbottled distillates and products of dubious origin and quality, causing risks for the health and a serious impact on the public revenues, the employment (loss of 20.000 job positions), and the Greek economy in general, as Mr. N. Vettas, Secretary General of the Foundation for Economic and Industrial Research (IOVE) stressed during his presentation.
The Secretary General of Public Revenue, Mr. Giorgos Pitsilis, mentioned the high ranking position of Greece compared to the neighboring and competitive touristic countries, as well as to the ΕU-28 countries, among which it is in the 6th place, in terms of the level of the Excise Duty on spirits. This large difference, he stressed, favours illegal actions, such as tax evasion and smuggling, posing risks for the public health from illegal alcohol products and the malfunctions generated in the market. Referring to the measures against smuggling at a national level, he included the need to intensify the on-the-spot controls also at the entry gateways to the country, to simplify the procedures for the reduction of the administrative expenses, and to modernize the regulatory framework as well as the control mechanisms by obtaining additional tracing systems. In the meantime, he announced the establishment of an Operational Center over the period ahead in cooperation with the General Secretariat against Corruption, the Financial and Economic Crime Unit (SDOE) and the customs authorities.
In that context, Mr. George Vassiliadis, Secretary-General against Corruption, explained that smuggling provides funding for the organised crime and focused on the losses in the public revenues and all the aspects of the economy while he praised the latest achievements and the difficult work of the prosecuting authorities, highlighting the fact that the State is in cooperation with the sector aiming to fight smuggling, an aim that would bring economic growth and effectively protect the healthy competition.
Mr. Xenophon Petropoulos representing the Greek Tourism Confederation (SETE) said that the competitiveness of the domestic tourism product has been hard hit by the taxes, mentioning that the cost of the tourist’s “shopping basket” increased by 10% in just one year and wondered about the effectiveness of the budget performance of the VAT increase to 24% and the abolishment of the 50% exemption of the Excise Duty on spirits in the Dodecanese; he also stressed the need to establish synergies with other sectors of the Greek economy, and to create a friendly business environment.
Presenting the latest trends in South-eastern Europe, Mr. Konstantinos Maheras from the Institute of Retail Consumer Goods (IELKA) mentioned the reduction of taxes on food in Romania and the first positive results from this action, and predicted that the responsible consumption and the corporate social responsibility, to which the spirits sector has given prime importance, will have further significance in the near future.