Jean Monnet Center at NYU School of Law

The Taxation of Alcohol and the Development of a European Identity


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[1] This paper owes much to the generous assistance of many persons who provided information (or probing questions) and facilitated its completion. I would like particularly to thank M. Henri Étienne and Ms. Ninna Rösiö; Professors Oliver Oldman, Servaas van Thiel, Joseph Weiler, and Alexander Wendt; and Ms. Inge Burgess. Messrs. Stephen Bill and Michael Bott of the European Commission have been generous with their time and resources in providing information and documentation on the current state of alcohol excise taxation in the European Union. Any opinions, interpretations, and errors in this study are entirely my own.

[2] Ostrom MOller, Europe: The Coming of the "Nonmaterial" Society, The Futurist, November-December 1993, at 23, 24. The same message lies at the heart of his book The Future European Model (1995). MOller is extraordinarily optimistic about Europe's capacity to find a successful formula for economic and cultural balance that will serve as a model for the world.

[3] Philip R. Schlesinger, Europe's Contradictory Communicative Space, 123 Daedalus 25 (Spring 1994).

[4] Not all of the European Union's dimensions have been developing at the same pace; economics continues to lead. The issues raised in this paper relate primarily to that economic dimension, which is still represented by that "pillar" of the European Union known as "the Communities," specifically here the European Economic Community. Consequently, I will use the term "Community" throughout this paper.

[5] Maria Sagi, Introduction to Special Issue on The Evolution of European Identity: Surveys of the Growing Edge, 39 World Futures 1 (1994).

[6] Id., at 26.

[7] Id., at 27.

[8] E.g., Mauro Cappelletti, Monica Seccombe, and Joseph Weiler, Book 1 Integration through Law: Europe and the American Federal Experience , Book 3: Forces and Potential for a European Identity (1986); Ian Ward, In Search of a European Identity , 57 Mod. L. Rev. 315 (1994); John E. Putnam, II, Common Markets and Cultural Identity: Cultural Property Restrictions in the European Economic Community, [1992] U. Chi. Leg. Forum 457.

[9] E.g., Gerard Delanty, Inventing Europe: Idea, Identity, Reality (1995).

[10] E.g., Victoria A. Goddard, et al. (eds.), The Anthropology of Europe: Identity and Boundaries in Conflict (1994).

[11] E.g., Johann Galtung, Europe's Fault Lines, 8 New Statesman and Soc'y , May 26, 1995, at S3.

[12] E.g., Bryan T. Peck, SOCRATES: The Next Step Toward a European Identity , 76 Phi Beta Kappan 258 (1994).

[13] E.g., A Research Note on European Broadcasting Culture, 39 World Futures 155 (1994); Schlesinger, Europe's Contradictory Communicative Space , supra n. 3, and Wishful Thinking: Cultural Politics, Media, and Collective Identities in Europe, 43 J. Comm. 6 (1993).

[14] E.g., Doris Edel, Cultural Identity and Cultural Integration: Ireland and Europe in the Early Middle Ages(1995); Simon Forde, Lesley Johnson, and Alan V. Murray (eds.), Concepts of National Identity in the Middle Ages (1995); M.J. Wintle, Culture and Identity in Europe: Perceptions of Divergence and Unity in Past and Present (1996).

[15] E.g., Paul Graves-Brown, Sian Jones, and Clive Gamble, Cultural Identity and Archaeology: The Construction of European Communities (1996); Michael Dietler, "Our Ancestors, the Gauls": Archaeology, Ethnic Nationalism, and the Manipulation of Celtic Identity in Modern Europe, 96 Am. Anthropologist 584 (1994).

[16] 39 World Futures: The Journal of General Evolution (Spring 1994). The special issue is entitled The Evolution of European Identity: Surveys of the Growing Edge. A Report by the European Culture Impact Research Consortium.

[17] Stanley Hoffmann, Europe's Identity Crisis Revisited , 123 Daedalus 1 (Spring 1994). This pessimism pervades the essays in this number. In the Preface, Stephen Graubard wrote, "Indeed, within Europe itself, even in the more prosperous segments, there is new preoccupation with whether what was once thought to be inevitable progress is in fact likely to continue. If Europe has lacked a flag capable of touching men and women of different national and ethnic groups, it took economic progress to be its substitute faith." Id., at xiv.

[18] MOller, The Coming of the "Nonmaterial" Society , supra n. 2, at 23.

[19] Id.

[20] Mary Douglas,Introduction, M. Douglas (ed.), Constructive Drinking: Perspectives on Drink from Anthropology 4 (1987).

[21] Susanna Barrows and Robin Room, Introduction, Barrows and Room (ed.), Drinking: Behavior and Belief in Modern History 7 (1991).

[22] Douglas, supra n. 20, at 8. See also, e.g., Marianna Adler, From Symbolic Exchange to Commodity Consumption: Anthropological Notes on Drinking as a Symbolic Practice, in Barrows and Room, supra n. 21, at 376; Thomas Babor, Alcohol, Customs, and Rituals (1988).

[23] Douglas, supra n. 20, at 3.

[24] Douglas, supra n. 20, at 8.

[25] Barrows and Room, supra n. 21, at 1. See also Maryon McDonald, Introduction: A Social-Anthropological View of Gender, Drink and Drugs, M. McDonald (ed.), Gender, Drink and Drugs 2-10 (1994), for a brief history of alcohol as a social problem. There is an extensive literature in various social science disciplines related to problems associated with alcohol consumption.

[26] Barrows and Room, supra n. 21, at 3.

[27] David D. Gilmore, Role of the Bar in Andalusian Rural Society: Observations on Political Culture Under Franco, 41 J. Anthropological Res. 263 (1985).

[28] McDonald, supra n. 25, at 15 (Ireland). See also, e.g., Helgi Gunnlaugsson, Prohibition of Beer in Iceland: An International Test of Symbolic Politics , 20 Law and Soc'y Rev. 335 (1986).

[29] McDonald, supra n. 25, at 14-15, 21.

[30] Perhaps the most active specialist in the field has been Dwight Heath, whose most recent work is International Handbook on Alcohol and Culture (1995). Other works include Anthropology and Alcohol Studies: Current Issues, 16 Ann. Rev. Anthropology 99 (1987); Alcohol Use and World Cultures: a Comprehensive Bibliography of Anthropological Sources (1981); A Critical Review of Ethnographic Studies of Alcohol Use (1975)

[31] M. McDonald, Drinking and Social Identity in the West of France, in McDonald, Gender, Drink and Drugs, supra n. 25, at 99-124. Robin Room is an ethnographer specializing in alcohol issues; see, e.g., Alcohol and Ethnography: A Case of Problem Deflation?, 25 Current Anthropology 169 (1984). Rutgers University has a Center of Alcohol Studies, whose publications include a series of monographs entitled "Alcohol, Culture, and Social Control"; see, e.g., David J. Pitman and Helen Raskin White, Society, Culture, and Drinking Patterns Reexamined (1991).

[32] Adrian Peace, Fishing, Drinking, and the Construction of Identity in Rural Ireland, 4 Mast 3 (1991). The same material was used by Peace in No Fishing without Drinking: The Construction of Social Identity in Rural Ireland , in Demetra Gefou-Madianou (ed.), Alcohol, Gender, and Culture (1992).

[33] Pekka Sulkunen,The European New Middle Class: Individualism and Tribalism in Mass Society(1992); G.P. Hunt and Saundra Satterlee, The Pub, the Village and the People , 45 Human Organization 62 (1986), and Cohesion and Division: Drinking in an English Village, 21 Man 521 (1986).

[34] Barrows and Room, supra n. 21, at 11.

[35] European Commission, The Agricultural Situation in the Community: 1993 Report T/167 (1994). However, the absolute amount of alcohol consumed tends to be lower in some northern Member States; in Ireland and Britain, per capita consumption has been measured at 6.7 and 7.3 litres, respectively, while the highest consumption per capita occurred in Luxembourg (19.4) and France (14.2). A.J. Easson, Taxation in the European Community 154 (1993).

[36] United Nations, 2 1993 International Trade Statistics Yearbook 38 (1995). Export numbers from this source also include items that have been imported for transshipment, which inflates figures for some states that are major entrepôts. For wine, see also 1993 Agricultural Report, supra n. 35, at T/161.

[37] Id., at 306, 310.

[38] Id., at 309.

[39] Id., at 308.

[40] European Commission, Report on Excise Conference 1995, Lisbon 63 (1995).

[41] Id., at 307.

[42] 1993 Agricultural Report, supra n. 35, at 77.

[43] France, Italy, Spain, Germany, Portugal, Greece, and Britain, presumably in its capacity as a transshipment center. Id., at 309.

[44] Britain, Ireland, France, Germany, and the Netherlands. Id., at 309. Presumably, all but the first two figured primarily as transshippers.

[45] France, Spain, Italy, Germany, Greece, Britain, and the Netherlands. Id., at 310.

[46] The Netherlands, Germany, Denmark, Belgium/Luxembourg, Britain, France, and Ireland. Id., at 307.

[47] Id., at 38. The other five in the top ten were France, Belgium/Luxembourg, the Netherlands, Italy, and Spain.

[48] United Nations, 1 1993 International Trade Statistics Yearbook 338 (1995).

[49] Id., at 1011.

[50] Id., at 470.

[51] Id., at 898.

[52] European Statistical Office, Basic Statistics of the Community 1994 299 (31st ed. 1994).

[53] Britain's domestic market for whisky, for example, has amounted to some 20 percent of total production, at least as of the late 1980s. See Rob Baggott, Alcohol, Politics, and Social Policy 108 (1990).

[54] Michael Dietler, Driven by Drink: The Role of Drinking in the Political Economy and the Case of Early Iron Age France, 9 J. Anthropological Archaeology 352 (1990).

[55] Category number 0356 in the Community's Classified Index.

[56] Where the Community's special provisions on agriculture apply, "they take precedence over the general rules of the common market." 52 Halsbury's Statutes of England and Wales 189 (4th ed. 1986), reprinted in Lord Hailsham of Marylebone (ed. in chief), 2 Law of the European Communities 189 (1986).

[57] For a useful summary of the CAP, see id., at 189-96.

[58] Thus, where the interests of farmers and consumers conflict, it is a principle of Community policy to favor farmers. Id., at 190.

[59] In 1992, the Community accounted for 60% of all production and 55% of all consumption. 1993 Agricultural Report, supra n. 35, at 68. The production figure for 1991/92 was 151,000,000 hectoliters. Id., at 69.

[60] 2 1993 International Trade Statistics, supra n. 36, at 306 (1995). Since 1984, France alone has accounted for roughly half of the world's total wine exports (45.4 to 55.4% per year), and Italy for about one-seventh to one-fifth of annual totals (14.2 to 20.5%).

[61] 1995 Excise Conference Report, supra n. 40, at 61.

[62] For some details of support activity in 1992/93, including guide prices and market intevention measures (distillation of excess wine produced), see 1993 Agricultural Report, supra n. 35, at 69.

[63] Basic Statistics 1994, supra n. 53, at 256-57.

[64] Id.

[65] Id., at 250

[66] Numbers for Italy and Britain are provisional. Id., at 115.

[67] Total consumption was calculated by multiplying the two previous columns: consumption per capita and population.

[68] Totals may not reflect the sum of each column, due to rounding off.

[69] This figure for direct consumption excludes industrial uses, which accounted for 37 million hectoliters in 1992/93, when the direct consumption was still around 127 million hectoliters. 1993 Agricultural Report, supra n. 35, at 69.

[70] Per capita consumption within the Community declined by 14% in the six years before 1991/92, due to a substantial drop in most of the leading producer states: France, Greece, Italy, Spain, and Portugal. On the other hand, Germany and most of the non-producer states increased their per capita consumption slightly in that period--before the establishment of the Single Market. Id., at T/168.

[71] The Community has handled excess wine production largely by distilling it, mainly at Community expense. Id., at 68-70. Other measures have included paying wine growers to abandon some marginal vineyards permanently, although more productive vineyards continue to increase their yields. Id., at 71. Wine yields in Europe vary widely among the major producing states; in 1991/92, they ranged from 22.2 hectoliters per hectare in Spain to 104.9 hectoliters per hectare in Germany. Id., at T/225.

[72] Id., at T/170, T/227.

[73] As recently as 1994, the Community anticipated a steadily worsening wine surplus, resulting from stagnation of exports, decreased consumption, and inefficient production controls. Id., at 71.

[74] This information was supplied in a personal interview on 1 April 1996 at Brussels with Mr. Stephen Bill, Head of Unit, Indirect Taxation Other Than Turnover Taxes, Directorate-General XXI of the European Commission.

[75] 1993 Agricultural Report, supra n. 35, at 76-77.

[76] Id.

[77] A recent study for the European Commission of competition between alcoholic beverages within the Community has confirmed this price elasticity. See Bossard Consultants, Competition Between Different Categories of Alcoholic Drinks: Final Report to the Intention [sic] of European Commission, DG XXI, Customs and Indirect Taxation 61 (1994).

[78] For recent expressions of concern by industry groups, see 1995 Excise Conference Report, supra n. 40, at 25-27 and 35 (general), 61-62 (wine trade), 63 (spirits trade), 65 (brewers).

[79] The Wine Committee of the Committee of Agricultural Organizations in the E.C.C. / General Committee for Agricultural Cooperation in the E.E.C. Id., at 61-62.

[80] See, e.g., Francois Guichard and Philippe Roudié, Vins, Vignerons et Cooperateurs de Bordeaux et de Porto (1 Études Vinicoles Franco-Portugaises) (1985).

[81] For a useful overview of the alcohol industry globally, see John Cavanagh, Frederick Clairmonte, and Robin Room, The World Alcohol Industry, with Special Reference to Australia, New Zealand, and the Pacific Islands (1985). For British brewers as an example of industrial alcohol production, see K.H. Hawkins and C.L. Pass, The Brewing Industry: A Study in Industrial Organization and Public Policy (1982).

[82] This assumption is not necessarily borne out in reality. At the November 1995 Excise Conference in Lisbon, it was pointed out that some retailers did not pass along tax savings to customers, and that some supermarkets (which presumably paid tax and passed them through to the consumers) sold alcoholic beverages at lower prices than duty-free shops. 1995 Excise Conference Report , supra n. 40, at 34.

[83] For the excise tax percentage, see infra, at 32. For the teetotallers figure (30%) see Elizabeth Malcolm, "Ireland Sober, Ireland Free": Drink and Temperance in Nineteenth Century Ireland (1986).

[84] See, e.g., [Swedish] National Institute of Public Health, National Plan of Action for Prevention of Alcohol-Related Harm and Drug Abuse in Sweden 9, 15, 22-23 (1995); 1995 Excise Conference Report, supra n. 40, at 26. See also studies from the 1970s and 1980s cited in Baggott, supra n. 53, at 96.

[85] See, e.g., 1995 Excise Conference Report, supra n. 40, at 26 and 38.

[86] Id., at 26; European Parliament, Second Report of the Committee on Economic and Monetary Affairs and Industrial Policy [on COM (90) 0432 final], Doc. PE A3-387/91, 12 November 1991, at 24.

[87] Baggott, supra n. 53.

[88] Id., at 101. At that time, taxes on alcohol provided 4.7% of all Britain's central government revenues. (That tax figure may include VAT and other taxes as well as excises.) In the late 1980s, taxes accounted for 40%, 45%, and 65% of the retail price paid for beer, wine, and spirits, respectively.

[89] Id., at 108.

[90] id., at 99-101, 106.

[91] Id., at 98.

[92] Id.

[93] Id., at 106, citing respectively to 949 House of Commons Official Report , May 11, 1978, at col. 585-86; and 51 House of Commons Official Report , December 22, 1983, at col. 557.

[94] Id., at 108.

[95] Id., at 108-09.

[96] See, e.g., 1995 Excise Conference Report, supra n. 40.

[97] See infra, at 47 sqq.

[98] See infra, at 57 sqq.

[99] See Josephine Shaw, European Community Law 90 (1993). For a general summary of the Parliament's role, see id., at 65-69, 78-84.

[100] Id., at 69-70. The Maastricht Treaty created a parallel Committee of the Regions. Id., at 70-71.

[101] The entire concept of a special tax for alcohol has been questioned in the recent past, but the critique has not been influential. See John W. O'Hagan, The Rationale for Special Taxes on Alcohol: A Critique, [1983] Brit. Tax Rev. 370.

[102] See Sijbren Cnossen, Excise Systems (1977), which is the authoritative work on excise taxes generally.

[103] Baggott, supra n. 53, at 101. See also O'Hagan, Rationale, supra n. 98, at 370.

[104] See European Statistical Office, Taxes and Social Contributions 1981-1992 (1994).

[105] Id. The Community brewers' industry association has noted that excise taxes on beer account for only 0.3 percent of all Member States' tax receipts. 1995 Excise Conference Report, supra n. 40, at 65. Throughout this paper, statistics from 1992 will be used, where possible, to establish baseline numbers for Europe before the Single Market. As of this writing, statistics for 1994 and later years are generally not yet available, so significant comparisons with Single Market changes are difficult to make.

[106] Taxes and Social Contributions, supra n. 102.

[107] For a general sense of the dominance of indirect taxation, specifically VAT, in current European fiscal thinking, see, e.g., 34-36 European Taxation (1994-96).

[108] In fact, excise taxes are sometimes called "sin taxes," as they can be imposed on products that are considered socially undesirable and produce either a positive revenue effect or a socially beneficial change in consumer behavior. This approach may be seen in, for instance, Spain's excise tax on pornographic movies. More commonly, excise taxes have been imposed on what were traditionally considered luxury goods, including such consumer favorites as sugar, coffee, and perfume. In the Community, Denmark has the longest list of excisable items, among them playing cards, ice cream, and light bulbs. See Easson, supra n. 35, at 146.

[109] See, e.g., Doc. PE A3-387/91, supra n. 86, at 30.

[110] See, e.g., 1995 Excise Conference Report, supra n. 40, at 26.

[111] See, e.g., Baggott, supra n. 53, at 95-113.

[112] For Sweden, e.g., see National Plan of Action , supra n. 84, at 9, 15, 22-23.

[113] As of January 1, 1992, the rate was 22 francs per hectoliter. European Commission, Inventory of Taxes Levied in the Member States of the European Communities 344 (15th ed. 1993), In terms of exchange as of October 1, 1992, that would be 3.31 ECU. The state with the next lowest level of wine taxation as of January 1, 1993 was the Netherlands, at 48.51 ECU. European Commission, Report on the Rates of Duty Laid Down in [the 1992 Council Directives] , Doc. COM (95) 285 final 42 (1995) [hereinafter 1995 Commission Report].

[114] Wine is currently zero-rated, rather than exempt, under the harmonized excise tax regime, see infra, at 67, and it can be monitored within the system. The Council has considered imposing a "control levy" for monitoring purposes. See 1995 Committee Report, at 20.

[115] See Inventory of Taxes, supra n. 113, which lists every specific tax, delineating the tax base, rate structure, timing of payment, statutory authority, and other details.

[116] Council Directive 92/83/EEC, 1992 O.J. (L 316) 21.

[117] See Inventory of Taxes, supra n. 113, passim.

[118] Id., at 339, 341, 344. For a rather contentious discussion of factors in the application of alcohol taxation, see John O'Hagan, The System of Taxing Alcohol: Some Issues, [1984] Brit. Tax Rev. 171.

[119] E.g., id., at 100 (Danish tax on spirits); 273 (Greek duty on alcoholic beverages).

[120] See, e.g., Baggott, supra n. 53, at 96-97, showing how blunt an instrument excise taxation can be when not indexed to prices or inflation.

[121] See, e.g., Inventory of Taxes, supra n. 113, at 34, 36, 39 (Belgian taxes on wine, beer, spirits); 100, 102, 104 (Denmark: wine, beer, spirits); 178, 180 (Germany: sparkling wine, beer); 256 (Greece: beer or malt for beer); 297, 298 (Spain: beer, spirits); 339, 341, 344 (France: beer, wine, spirits); 438, 439, 442 (Ireland: wine, intermediate products, cider); 606, 612 (Netherlands: wine, spirits); 660 (Portugal: beer); 700 (Britain: wine, cider).

[122] See, e.g., 1995 Excise Conference Report, supra n. 40, at 26.

[123] E.g., Inventory of Taxes, supra n. 113, at 253 (Greece); 436 (Ireland); 492 (Italy); 659 (Portugal); 700 (Britain).

[124] E.g., id., at 34 (Belgian tax on spirits); 102, 104 (Denmark: wine, beer); 176, 180 (Germany: beer, spirits); 297 (Spain: spirits); 612 (Netherlands: spirits); 701 (Britain: wine).

[125] E.g., id., at 39 (Belgium); 440 (Ireland); 493 (Italy); 610 (Netherlands); 704 (Britain).

[126] See, e.g., id., at 253, 273 (Greek taxes on alcohol); 177 (Germany: spirits).

[127] E.g., id., at 492, 493 (Italian taxes on beer and spirits).

[128] E.g., id., at 36, 39 (Belgian taxes on wine and beer); 297, 298 (Spain: beer and spirits); 440 (Ireland: beer); 610 (Netherlands: beer); 704 (Britain: beer, spirits, cider).

[129] E.g., id., at 34 (Belgian tax on "ethyl alcohol", i.e., spirits); 100, 102, 104 (Denmark: wine, beer, spirits); 178, 180 (Germany: beer, sparkling wine); 339, 341, 344 (France: wine, beer, spirits); 436, 438, 439, 442 (Ireland: wine, spirits, cider, intermediate products); 492 (Italy: spirits); 606, 610, 612 (Netherlands: wine, beer, spirits); 660 (Portugal: beer); 700, 701, 703, 704 (Britain: wine, beer, spirits, cider). Note that, in some states (e.g., Britain, Italy), producers and importers may have the option of paying at various stages of manufacture up to delivery for consumption.

[130] See Inventory of Taxes, supra n. 113, at 176-77.

[131] See National Plan of Action, supra n. 84, at 16.

[132] See, e.g., Inventory of Taxes, supra n. 113, at 56-59 (Belgium); 380, 381, 384 (France); 201 (Germany); and 576 (Luxembourg).

[133] See supra, n. 106. The VAT regime in the Community is still in what is called a "transitional" phase; it is not clear when the regime may move to its intended final form. See also Coopers and Lybrand, A Guide to VAT in the E.U.: The Single Market Changes (1994)

[134] See, e.g., 1994 Guide to VAT, supra n. 132, at 100 (France: reduced rate for beverages); 146 (Italy: reduced rates on bar service and wine sales); 121 (Greece: separate regime for spirits); 169 (Luxembourg: reduced rate on wine below 13 percent alcohol).

[135] Case 120/78, Rewe-Zentral AG v. Bundesmonopolverwaltung fur Branntwein, 1979 E.C.R. 649, [1979] 3 C.M.L.R. 494.

[136] Id., at 664. Note that this seminal case was an application of the direct effect doctrine, in which a retailer challenged national protectionist policies.

[137] See Joseph H. H. Weiler, The Transformation of Europe , 100 Yale L.J. 2403 (1991).

[138] The third clause of Article 95 esentially required Member States to remove non-complying national legislation by January 1, 1962. Article 95 dates from the original Treaty of Rome; it forms part of an anti-discriminatory regime that includes also Articles 96-99.

[139] Case 127/75, Bobie v. HZA Aachen-Nord, 1976 E.C.R. 1079, at 1086.

[140] For a general discussion of this issue, see Vito Tanzi, Taxation in an Integrating World (1995).

[141] For an excellent overview of this jurisprudence, and the discriminatory taxation regime in general, see Easson, supra n. 35, at 20-83.

[142] For a valuable analysis of the expansion in Community competences and action in this period generally, see Weiler, Transformation of Europe, supra n. 137, at 2431-53.

[143] In Easson's words, "No element of the national tax systems has produced so much litigation under Article 95/EEC as has the taxation of alcohol." Supra n. 35, at 154. The figures cited were kindly provided by Professor Servaas van Thiel.

[144] Case 168/78, Commission v. France, 1979 E.C.R. 347, 2 C.M.L.R. 631 (1981).

[145] Id., at 364-65. A smaller manufacturing tax (roughly 33 percent of that on grain-based beverages) was imposed on grape-based aperitifs and certain other beverages.

[146] Id., at 367.

[147] Id.

[148] Id., at 367-68.

[149] Id., at 368.

[150] Id., at 368-69.

[151] Id., at 369 (emphasis added).

[152] Id., at 370.

[153] Case 169/78, Commission v. Italy, 1980 E.C.R. 385, 2 C.M.L.R. 673 (1981); Case 171/78, Commission v. Denmark, 1980 E.C.R. 447, 2 C.M.L.R. 688 (1981).

[154] Commission v. Italy, supra, n. 152, at 404. The French did not penalize rum in this way, perhaps because rum is produced in one of their overseas departments (Martinique) and imported into mainland France. Italy's taxation of rum was challenged (and invalidated) in the Court again in the later 1980s. Case 323/87, Commission v. Italy, 1989 E.C.R. 2275, 1 C.M.L.R. 67 (1991).

[155] Commission v. Italy, supra n. 152, at 408.

[156] Commission v. Denmark, supra n. 152, at 469.

[157] Id., at 470.

[158] Id., at 471.

[159] Id., at 472.

[160] Case 170/78, Commission v. United Kingdom, 1980 E.C.R. 417, 1 C.M.L.R. 716 (1980); 1983 E.C.R. 2265.

[161] 1980 E.C.R. , at 437.

[162] Id., at 437-38.

[163] Id., at 434.

[164] Id., at 435.

[165] 1983 E.C.R. , at 2289-92.

[166] Id., at 2292 (emphases added).

[167] Id., at 2289-91.

[168] Case 319/81, Commission v. Italy, 1983 E.C.R. 601.

[169] Id., at 619.

[170] Case 278/83, Commission v. Italy, 3 C.M.L.R.688 (1985).

[171] Case 230/89, Commission v. Greece, 1 C.M.L.R. 869 (1993).

[172] Case 140/79, Chemial Farmaceuti v. DAF, 1981 E.C.R. 1, 3 C.M.L.R. 350.; Case 46/80, Vinal v. Orbat, 1981 E.C.R. 77, 3 C.M.L.R. 524.

[173] See Easson, supra n. 35, at 48-49.

[174] Case 243/84, John Walker & Sons v. Ministeriet for Skatter og Afgifter, 1986 E.C.R. 875, 2 C.M.L.R. 278 (1987).

[175] Id., at 884 (emphasis added).

[176] Easson, supra n. 35, at 145-46.

[177] Doc. COM (72) 225 final.

[178] Easson, supra n. 35, at 147-148.

[179] Doc. COM (85) 310 Final. See 1995 Commission Report, supra n. 113, at 4; also Easson, supra n. 35, at 148.

[180] Doc. COM (87) 0325, modified by COM (87) 0325 final/2, 1987 O.J. (C 251) 3.

[181] See Easson, supra n. 35, at 157, for an adaptation.

[182] For a good summary of the 1987 proposal, including later revisions, see Easson, supra n. 35, at 154-58. Note that the rate for wine and beer was exactly the rate that Italy imposed on beer at the time.

[183] Opinion of the Economic and Social Committee on... COM (87) 328 final/3, Doc. CES 746/88 (1988).

[184] Id., at 3.

[185] Id., at 4.

[186] Id.

[187] Id., at 6. Note that the opinion was approved overwhelmingly by the Committee, which rejected on a narrower vote (46-32) an amendment that would have recognized the competitive danger to Scotland and other regions producing and exporting spirits if wine and beer were exempted. Id., at 8-10.

[188] Doc. COM (89) 527 Final, 1990 O.J. (C 12) 12; Doc. COM (90) 432 final, 1990 O.J. (C 322) 11.

[189] 1995 Commission Report, supra n. 113, at 4-5.

[190] For a description of this proposal and a comparison of the original and revise rates, see Easson, supra n. 35, at 156-57. All of the proposals included derogations for small producers and certain products of limited use.

[191] Opinion of the Economic and Social Committee on [COM(89) 527 final], CES 832/90 (1990), at 2.

[192] Id., at 3-4. In fact, the Committee pointed out, alcohol consumption was declining where it was taxed lightly and increasing where it was taxed heavily.

[193] Doc. PE A 3-317/91A, supra n. 86, at 3.

[194] Id., at 29-30.

[195] Id., at 23.

[196] Id.

[197] See, e.g., PE Docs. A3-386/91 (19 Dec. 1991); A3-387/91 (20 Dec. 1991); A3-96/92 (28 Feb. 1992). For the final Parliamentary and Committee Opinions, see 1992 O.J. (C 67) 165 and 1991 O.J. (C 96) 25, respectively.

[198] Doc. PE A3-387/91, supra n. 86, at 13.

[199] The Council passed directives 92/83/EEC and 92/84/EEC on October 19, 1992, to come into effect on January 1, 1993 as part of the Single Market reforms. 1992 O.J. (L 316) 21; 1992 O.J. (L 316) 29, respectively. The overall regime for the mechanics of excise taxation on all excisable products was enacted in Council Directive 92/12/EEC, 1992 O.J. (L 76) 1.

[200] Council Directive 92/83, art. 8, at 23. The rate variations are meaningless, since the minimum rate is zero and no maximum exists. See infra, at 67.

[201] Id., art. 2, at 22.

[202] Id., art. 17, at 24. Another category, in Article 12, covers "Fermented Beverages Other Than Wine and Beer," for products within CN codes 2204-06 that do not fall under Articles 2 and 8. Id., at 23-24. Those products will generally be treated like wine (art. 8), although still beverages exceeding 5.5% alcohol and sparking beverages exceeding 8.5% alcohol may be treated as intermediate products, if those beverages are not entirely of fermented origin. The tax structure is considerably different as between wine and intermediate products; see infra. Note that Britain and Spain negotiated a special agreement on intermediate products (such as sherry), that was attached to Directive 92/83.

[203] Id., at 25.

[204] Id., at 25-27, which also detail other general exemptions, e.g., medical uses, samples, etc.

[205] It should be noted that the harmonized excise regimes for all of the three major excisable product groups (alvohol, tobacco, and mineral oils) use minimum rates only, although the political calculus is significantly different for each product group. See 1995 Commission Report , supra n. 113; 1995 Excise Conference Report , supra n. 40.

[206] Directive 92/84, supra n. 200, arts. 3-6, at 29-30.

[207] Id., art. 7, at 30.

[208] Easson, supra n. 35, at 155, referring to a position taken by the Commission.

[209] The general preference in favor of wine and agricultural wine growers is particularly striking in Germany, the only Member State where wine and beer production and consumption are both very substantial. Germany has long had no excise tax on wine but a tax on beer that is higher than in most southern Member States. See Easson, supra n. 35, at 156. Even after the Directives took effect and beer taxes were adjusted upward to meet the minimum requirement, Germany's beer tax remained higher than those of France's and Spain. 1995 Commission report, supra n. 113, at 42.

[210] Supra, at 46-54.

[211] 1995 Commission Report , supra n. 114. It also covers tobacco and mineral oils, as required in the relevant Directives.

[212] Id., at 22-23. One tool used by the Scandinavian states is to limit travellers' tax-free allowances, which discourages cross-border shopping in low-tax Member States. They have been permitted a derogation to this effect, which will be reviewed at the end of 1996. For Sweden, alcohol control was a major issue in negotiations for accession. However, documentation of those negotiations has not been released publicly.

[213] National Plan of Action, supra n. 84, at 9.

[214] Id., at 18.

[215] Id.

[216] Bossard Report , supra n. 77.

[217] See 1995 Excise Conference Report , supra n. 40.

[218] See 1995 Commission Report , at 21-24.

[219] Supra, at 64.

[220] William Miller, Major Supports Canada in Fish Dispute with Spain, Boston Globe , March 31, 1995, at 9.

[221] Id.

[222] Id.

[223] Rex v. Sec'y of State for Transport, ex parte Factortame Ltd., [1990] 2 AC 85. Among member states, Britain has the only substantial fishing grounds left within its territorial limits. The Spanish have tried to maintain their large fishing industry in part by buying up the British fishing fleet and thus giving themselves access to British waters.

[224] MOller emphasizes the central roles of both economic and cultural elements. See The Future European Model and The Coming of the "Nonmaterial" Society, supra n. 2.

[225] Abram and Antonia Handler Chayes, The New Sovereignty: Compliance with International Regulatory Agreements 3-4 (1995).

[226] John K. Setear, An Iterative Perspective on Treaties: A Synthesis of International Relations Theory and International Law (forthcoming; draft presented to Harvard Seminar on Law and International Relations, 27 Sept. 1995, on file with author).

[227] Alexander Wendt, Collective Identity Formation and the International State, 88 Pol. Sci. Rev. 384 (1994).

[228] Id., at 387 (emphasis added; citation omitted).

[229] Id., at 390.

[230] Schlesinger, supra n. 3, at 28.



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