The worst fears of the trade were confirmed yesterday as the government increased taxation on both Sherry and Brandy by 5%. Despite a previous increase four years ago which had the effect of slowing sales and thus reducing its income from this tax, the government has gone ahead anyway. This increase will need to be passed on to consumers, making all products more expensive.
Evaristo Babé, president of Fedejerez, expressed his disappointment saying that Sherry earns little for the exchequer yet it is the only wine on which tax has been increased. He said that while spirits represent 25% of the alcohol consumed in Spain, they represent 75% of alcohol tax income. Beer, which accounts for 50% of consumption and table wine with 25% remain untouched.
|Cristobal Montoro, Finance Minister (foto:elconfidencial)|
For his part, César Saldaña, director of the Consejo Regulador for Sherry, said that this was yet another obstacle for Sherry which, after a huge amount of work, was beginning to recover. The secretary general of the Federación Española de Vino (FEV), Pau Roca, said the government move would cause more harm to producers of emblematic products than good to attempts to redress the nation’s budget deficit. Tax increases will be imposed from today. Meanwhile it seems that the government is wasting vast sums paying out the pensions of 29,321 people who are dead, due to inefficient cross-checking of data.