Scotch Whisky industry welcomes EU challenge to Colombia
13 Jan 2016
EU concerned about discriminatory taxes and monopolies'
The European Union has requested formal consultations with
Colombia under the World Trade Organisation's Dispute Settlement
Understanding over concerns about discriminatory taxes and
monopolies in Colombia, a move welcomed by Scotch Whisky producers.
This is the first stage in the WTO's dispute procedure.
The Scotch Whisky Association (SWA) said the industry struggles
to compete in Colombia because of high taxes on imported spirits
and the practices of provincial alcohol monopolies which distort
the market by favouring local producers. By law, Scotch Whisky must
be at least 40% alcohol by volume (abv), but Colombia applies a
significantly lower excise rate to products at or below 35% abv.
This favours domestic spirits, the vast majority of which are
bottled at this strength.
The SWA said that the current situation has made it difficult
for exporters of Scotch to benefit from the EU-Colombia Free Trade
Agreement that came into force in 2013. Colombia committed to
addressing these issues by August 2015, but this has not yet been
David Frost, Scotch Whisky Association chief executive,
"Scotch Whisky is being treated unfairly in Colombia and is
unable to compete against local spirit producers due to the
discriminatory tax system and anti-competitive practices of the
monopolies. We are pleased that the European Union has requested
consultations with Colombia at the World Trade Organisation with a
view to resolving these longstanding issues.
"Colombia is a key target market for us globally and offers
great potential for Scotch Whisky. In 2014, Scotch exports reached
£24 million in shipment value, up 7% on 2013. The removal of tax
discrimination and other discriminatory measures would give a major
boost to the market."
"The current model in Colombia is similar to the Chilean system
that was condemned by the WTO in a case some years ago. The WTO
panel on Chile and three previous ones - Korea, Japan and the
Philippines - said that all spirits categories compete and
therefore governments cannot discriminate between them."
With queries please contact Rosemary Gallagher, SWA head of
communications, Tel 0131 222 9230/07432 605385, email@example.com
For more information on the SWA visit www.scotch-whisky.org.uk
and follow us on Twitter @ScotchWhiskySWA