Greece loses fight over lower taxes for locally brewed spirits

FILE PHOTO: A worker holds grapes and a knife in his hands at a vineyard in Porto Rafti, east of Athens September 14, 2013. REUTERS/John Kolesidis/File Photo

ATHENS (Reuters) - Greece lost a fight to set a lower excise tax on two traditional spirits tsipouro and tsikoudia versus imported products after Europe’s top court on Thursday backed the European Commission’s view that such preferential treatment would breach EU laws.

Athens upset the EU executive after it introduced excise duties on tsipouro and tsikoudia, which is made in Crete, at half the rate from that levied on imported alcoholic beverages.

Small or so-called two-day distillers of the two beverages also enjoyed a super-reduced rate of around 6%. Both spirits, which are made from grapes, have protected designation of origin labels, an EU designation to promote and protect the names of quality agricultural products and foodstuffs

The Commission said the lower taxes indirectly protected tsipouro and tsikoudia from competition from similar imported products.

It took legal action against Greece at the Luxembourg-based Court of Justice of the European Union (ECJ) in February 2017.

ECJ judges agreed with the Commission, saying that the lower duties were contrary to EU laws.

The case is C-91/18 Commission v Greece (Tsipouro)

Reporting by Foo Yun Chee. Editing by Jane Merriman