GREECE - Tsipouro Tax

"Greeks find tax hike on a traditional liquor hard to swallow" PBS NewsHour 10/30/2015

Excerpt

SUMMARY:  Amid the financial crisis, there's one EU-imposed austerity measure that's causing particular angst among Greek citizens; a tax hike on one of the country's favorite traditional liquors.  Greeks are worried that raising taxes on Tsipouro, a powerful, clear type of brandy, will hurt the industry and farmers.  Hari Sreenivasan reports.

HARI SREENIVASAN (NewsHour):  In a barn full of pungent fumes, Demetrios Papafigos is distilling, applying the techniques of monks who created this quintessentially Greek elixir in the 14th century.

This alcohol time capsule, in the central town of Tyrnavos, is at the heart of the latest tax dispute in a country that’s broke and under intense pressure to extract as much revenue as possible from its citizens.  Brewed from fermented grape skins, it’s a powerful (40-45% alcohol by volume), clear type of brandy, similar to Italy’s grappa, called Tsipouro.

DEMETRIOS PAPAFIGOS, Licensed Tsipouro home Brewer (through interpreter):  Tsipouro provides the grape growers with supplementary income.  Without it, the vineyards would have to be uprooted.  The vineyards wouldn’t survive otherwise.

They have only survived thanks to production of Tsipouro, because, during difficult times, when bad weather destroyed the crop, we could even distill damaged grapes and make some money.

HARI SREENIVASAN:  Fellow grape farmers from this close-knit community have joined Papafigos for lunch, washed down, of course, with Tsipouro.

If the European Union gets its way, the Tsipouro makers will have to pay double the alcohol excise duty, which is currently applied.  At the moment, the liquor enjoys a low taxation rate because it’s considered to be a traditional speciality, not one that’s mass produced.

And Antonis Giamelides, the technical director of the local cooperative, is deeply concerned.

ANTONIS GIAMELIDES, Technical Director, Tyrnavos Tsipouro Cooperative:  It’s a crazy situation.  We don’t know what will happen tomorrow.  If the excise taxes go up at that level, then it will destroy all the wine production in Greece, because these people will not be producing any grapes anymore, because it will not be profitable.