Brewers Battle to Reverse French 150% Tax Increase

Proposals by the French government to increase the tax levy on alcohol by 150 percent have met with fierce criticism, with one brewer telling CNBC firms are joining forces to fight the plans.

Brewers Battle to Reverse French 150% Tax Increase
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Research firm Bernstein Research has estimated that the beer excise duty, which could take effect from the start of next year, would rise by around 150 percent sending the retail price of beer up by 15 percent.

Danish brewerCarlsbergis just one company set to be affected and its French subsidiary Brasseries Kronenbourg told CNBC how firms are together in their cause.

"All the brewers in France are united, under the French Brewer Association's banner, in fighting the French government's proposal to increase excise duty," a spokesperson said.

"As a leading brewer in France, Brasseries Kronenbourg, a subsidiary of theCarlsberg Group, is strongly committed to trying to convince the French authorities to revise its current proposition, with an aim of achieving a reasonable and affordable excise duty increase rate."

On Tuesday evening, in popular Parisian restaurant Chez Francoise the French Brewer's Association met to convince politicians to perform a climb-down on the proposals.

French newspaperLe Mondereported that the meeting was to forge solidarity between the brewers, to join together, raise awareness andlobby the government.

Bernstein Research explained that if this bill became law, France would soar from the bottom of the beer tax league in Europe to eighth, behind the U.K. and the four Scandinavian countries.

"We are no judges of French politics but we think a best case may be to have a phased implementation of the tax hike over say three to five years," it said in a research note.

Worst hit, according to Bernstein Research, would be Carlsberg andHeineken, reducing their earnings per share by 2.1 percent and 1.2 respectively.

Bernstein likened the rise to a similar move made by Russia in 2010. Beer was officially classified as alcohol rather than a foodstuff by the Russian government and a 200 percent tax rise followed.

Further tax increases in Russia have caused Carlsberg to complain of falling profits in what is another one of its key markets. In July, President Vladimir Putin raised the prospect of a further increase in beer taxes as part of a long-running campaign to curb drinking in the country.