Notable Policy Developments Around the World – 10 March 2020

FOR YOUR INFORMATION

We share below a number of recent developments. As always, we rely on FIVS Members to apprise us of noteworthy matters. Please contact the FIVS Secretariat with items that may be of interest.

ECONOMIC SUSTAINABILITY

• The Marketplace
  • France – Drinking Drops Precipitously: The French population reportedly drinks far less alcohol today than 60 years ago, consuming 60% less today than in 1960. This is according to a recent study conducted by the French National Institute of Statistics and Economic Studies. The study found that a Frenchman drank 200 liters of alcohol per year at that time, as compared to 80 liters today.
• Coronavirus
  • The Impact: This article reviews the impact that the global crisis concerning the coronavirus has had on multinational companies. The author suggests that airlines will be among the hardest hit, followed by technology, food, and leisure industry companies. As activity in Asia comes to a near-standstill, alcohol beverage companies are losing sales; events have been cancelled or postponed throughout the world; and conglomerates are suspending international travel. Here is another good summation of the effect of the coronavirus on businesses.
    • The China Culinary Association reports that 78 percent of enterprises in China have zero revenue, while still paying rent, labor, insurance, and other costs. A Chinese representative suggests in this article that trade associations and importers from Australia, Chile, China, and France believe that normality will not resume until the second half of 2020.
  • Meetings and Trade Shows – Cancellations & Postponements: The recently cancelled 2020 FIVS Brussels meetings have not been the only casualty of the spread of the coronavirus. Other notable cancellations have included the following:
    • The organisers of Vinexpo New York went ahead with its trade show at the Jacob K. Javits Convention Center in New York City on 02 to 03 March 2020, although we suspect some decided to forego attending the show.
    • The wine industry trade show, ProWein, was postponed following the recommendation of the German government. The show was then subsequently cancelled in its entirety; the new dates are the regular trade fair dates for 2021 (21 to 23 March).
    • The International Organisation of Vine and Wine has rescheduled its March 2020 meetings from 03 to 05 and 06 to 11 June (Methods of Analysis and Enology) and from 15 to 24 July (all other meetings).
    • Other shows that have been postponed or cancelled include The China Food & Drinks Fair in Chengdu, TaoWine, Sotheby’s Hong Kong auctions, TWC Chengdu Fine Wine Showcase, China International Alcoholic Drinks Expo (CIADE), the Asia Pacific Exhibition & Conference, Vinitaly, and the Sud de France Wine Roadshow.
    • Click here for a comprehensive list of postponements and cancellations.
• Excises
  • The Philippines – SDGs Linked to Alcohol Excises: The Director-General of the Philippine’s National Economic and Development Authority, Ernesto Pernia, reportedly said the enactment of Republic Act (RA) 11467 will help that country attain all 17 Sustainable Development Goals (SDGs) by funding the programs and projects that support the 2030 Agenda for Sustainable Development. He said RA 11467 will increase excise taxes on alcohol products, electronic cigarettes, and heated tobacco products, which in turn will be used to promote the general health of the population.
  • South Africa – “Sin Taxes” – Proposed Excise Hikes in line with Anticipated Inflation: South African Finance Minister Tito Mboweni reportedly announced that excise taxes on so-called “sin products” will increase, meaning that excises on champagne are expected to rise by 6 percent and beer, cider, wine, and other alcohol fruit drinks by 4.4 percent.
    • The South African government is expected to raise excise taxes on alcohol beverages to also help reduce government debt of ZAR50 – 60 billion, but the South African Liquor Brand Owners Association (SALBA) has called on the government to consider an inflation-only increase in the excise tax and to crack down on illicit trade in alcohol. SALBA estimates that ZAR6 billion is lost annually to the illicit trade of alcohol.
• Retaliation
  • The United Kingdom – Remove the Punitive Tariffs: This piece argues for the removal of so-called tit-for-tat tariffs resulting from the Boeing-Airbus trade dispute on products such as Scotch whisky and US bourbon to demonstrate “good will” as the UK pursues a trade deal with America. UK trade officials pressed US trade negotiators for an “urgent settlement” ahead of trade talks.
    • The author of this article suggests that wine producers could make wines higher in alcohol by changing blends from 2019 in order to avoid U.S. tariffs on French, Spanish, and German wines with less than 14 percent alcohol. (This view does not take into account the extent to which governmental authorities can modify coverage of the products at issue.)
    • The French wine industry has highlighted the pressures associated with punitive tariffs.
  • United States – Addressing the Underlying Dispute: The airline manufacturer Boeing has introduced bills in the Washington State legislature to remove a tax break which has been cited as in contravention of World Trade Organisation rules. If passed, this development could persuade EU Authorities not to target exports of U.S. wines and other products for retaliatory tariffs.