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		Scotch Whisky producers were back in Brussels this week, following the election of a new UK government committed to working with Europe, to step up the pressure for genuine progress in the EU to remove tax discrimination against Scotch Whisky.
		In a series of meetings with Members of the European Parliament, the Association drew their attention to a draft report, prepared by the Commission (DGXV, Internal Market), "Action Plan for the Single Market". (COM(97)184.30.4.1997)
		The paper is presented as a summary of the Commission's current thinking for presentation to next month's European Council meeting in Amsterdam. It sets out four "Strategic Targets", with specific action to deal with them. The second of these is that of dealing with a series of key market distortions, the first of which is identified as tax.
		Current duty rates in the EU are based on a structure introduced in 1993, which sets a high tax on spirits, a low tax on beer, and no tax on wine. These are minimum rates above which any Member State is free to go. But they cannot set any rate lower than the minimum.
		The Commission was given the task of examining and, if necessary, amending the structure every two years, taking account amongst other things of the effect of the rates on competition. So far, despite evidence that the system distorts competition, the Commission has done nothing to counter the growing discrimination it delivers.
		Yet, says The Scotch Whisky Association, nowhere in the new report are excise duties on alcoholic drinks mentioned, even though the Single Market boasts 15 Member States with 15 different excise duty regimes, 14 of which are blatantly discriminatory.
		"We find this both frustrating and a matter for grave concern," says the Association. "Last September, MEPs gave their opinion on the minimum rates structure for alcoholic drinks taxation, calling for a system of cash linkage to be introduced, to ensure that existing discrimination between categories should get no worse. The Commission appears to be unmoved, and unwilling to follow this up. We are urging MEPs to use every endeavour to ensure that their recommendation is heeded.
		"In practice," says the Association, "the EU minimum rates structure enshrines in law the principle of discrimination. Every EU country taxes spirits more heavily than other drinks, most much more heavily. At the same time, seven levy no tax on wine. In 1996 and 1997, we have seen spirits rates raised in five Member States, with no corresponding movement on wines."
		The Association describes the system as a manifest distortion of the market for alcoholic drinks in which all categories compete with each other, and wants the EU to move towards a system in which all drinks are taxed at the same rate, according to their alcohol content - the system most closely applied by the Irish Republic alone in the EU.
		"We recognise that this cannot be achieved overnight," says the Association, "but we want the target acknowledged, and as far as a first step we want to see the MEPs' idea for a cash linkage to be applied to rates as they now stand, to stop discrimination from widening."
		Note to Editors: Scotch Whisky exports to the EU, at £827 million in 1996, account for 40% of all exports. Five EU countries are amongst the top ten export markets.

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