FRENCH wine producers and merchants are preparing to do battle with the Government because they fear tax on the national drink is to be raised.

They are taking to the barricades after word leaked that Jean-Pierre Raffarin, the Prime Minister, was considering a steep rise in the 2p a bottle tax that is levied on wine. The money would be used to help to fund the £3 billion deficit in France’s social security system, which is dominated by health costs.

“It’s a scandal,” said Jean-François Délorme, president of the Burgundy Wine Interprofessional Bureau. “They are trying to assassinate wine at a time that consumption is already falling in France.”

The Burgundy producers said they had heard that a 300 per cent increase in tax was being considered. Insiders said that the final figure would probably double the existing duty.

In Bordeaux they forecast “drama” for the industry if the Government went ahead with the scheme. “We are the only wine-producing country in Europe which already imposes a tax on wine,” said Christian Delpeuch, president of the Federation of Unions of Wine Merchants of Bordeaux. “We are totally opposed to this. The current context is already hard for us at the moment.” Producers had already been hit hard by the crackdown on drink-driving, which had deterred people from having a drink before taking the wheel, he said.

The Health Ministry confirmed that an increase in taxes on all alcoholic drinks was being considered as a suitable way of easing the huge shortfall in social security finances. In a policy to deter smoking, taxes on tobacco have been increased by 40 per cent over the past two years, with the additional proceeds going entirely to financing healthcare.

A similar approach needed to be taken with wine, officials said. Although overall consumption has been falling, France still ranks high in the European league for alcoholism and drink-driving is blamed for a large part of the country’s high road death toll.

As a cherished national product, wine has historically been lightly taxed in France. Spirits are taxed at a much higher level.

Although wine consumption has dropped by 25 per cent since 1983, the average French citizen still downs 46 bottles a year, most of it home-grown. French wine exports have been badly hit by the success of New World rivals. The new duty would also apply to beer, which is lightly taxed at present.

Raising taxes on alcohol would still not come close to bridging the deficit in health funding. With an overall budget deficit that has breached the EU rules for the single currency, the centre-right Government is desperate to find ways of trimming the shortfall. M Raffarin is committed to overhauling health spending this year, but he faces heavy resistance from a public which is accustomed to enjoying the benefits of one of the world’s most generous systems.

He is due to decide whether to raise alcohol taxes by the end of this week. The Health Ministry pointed out that any decision would require approval from Brussels.

Last year the European Commission forced France to abandon a plan to levy a special tax on extra-strong beer. The idea was to tax a product that is especially favoured by people who drink to excess. The Commission ruled that the tax on beer with alcohol content of more than 8 per cent amounted to discrimination against imports because no French breweries produce beer of that strength.

The opponents of a wine tax received heavyweight backing when they were joined by Alain Juppé, the leader of President Chirac’s UMP (Union for a Popular Movement) party. M Juppé, who is also Mayor of Bordeaux, said the time was not right for such a duty. “Of course there has to be a fight against alcoholism, but it is not at all opportune to be putting up tax on wine at the same as dropping income tax,” he said. Raising taxes could send many vineyards into bankrupcty, he added.

M Raffarin, who is a member of the UMP, has just announced a fall of 3 per cent in income taxes next year.

While most French people drink wine, only the top half of wage-earners pay income tax.The tax cuts have already run into fire from the Left because they favour the better-off. Hitting wine and beer-drinkers as well as smokers will fuel the argument that the Government is penalising the people to help the rich.

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