ABOUT SOPER CONSULTING
Soper Consulting is an independent consultancy offering bespoke guidance and training on EU structures and legislation in the spirit drinks sector. As a small entity, we can move quickly and provide guidance and advice that is tailored to the particular circumstances of your company or association. Recognising that there will often be sensitive issues, we offer a confidential service at every stage.
Nick Soper worked in the Scotch Whisky Association for more than 20 years, half of which was as its Director of European Affairs, following which he spent 3.5 years in Brussels as Internal Market Director for the EU-level association, spiritsEUROPE. Over the years, Nick has chaired EU working groups on labelling and on bottle sizes; acted as rapporteur on EU enlargement; spent 15 years removing trade barriers in Turkey; sat on the working group on allergen labelling; successfully challenged tax discrimination in several countries; and chaired the European Commission’s Civil Dialogue Group, the formal consultative body for the EU spirits sector. Before life in the spirits sector, Nick spent 12 years working at the British Embassy in Paris.
When not working, Nick can be found up Scottish hills, in the garden, with his nose in a book, travelling, eating out or listening to opera. While he would be delighted to hear from individuals, companies or associations who might be able to use Soper Consulting’s services, an extra-special welcome would be extended to those bringing tickets for Bayreuth.
As a small entity, we can move quickly and provide guidance and advice that tailored to the particular circumstances of your company or association.
CASE STUDIES
Ensuring the spirit drinks legislation works for producers and consumers
Having led the Scotch Whisky campaign when the 2008 spirit drinks regulation was negotiated, Nick led for the whole EU industry when the law was updated. Initially this involved lengthy discussions with producers to identify the areas where improvements seemed necessary and then drafting the suggested amendments. Throughout the process there was a close dialogue with the lead Commission officials, the European Parliament ‘rapporteur’ and her EP colleagues, assistants and advisors, as well as with national officials and the EU Presidency.
In the European Parliament, around 1,000 proposed amendments were tabled on which the sector had to offer guidance to MEPs, urging them to support or oppose as appropriate. Separately, EU Member States debated the proposed law and much time and effort was spent ensuring officials also understood the impact of the changes proposed in those talks.
The regulation finally agreed in 2018 endorsed most of the sector’s proposed adjustments and, critically, our arguments also persuaded legislators not to include other, potentially damaging, changes. It is regrettable that, during the final stages of the negotiations (when producers are not involved) some problematic provisions were introduced.
Turkey – removing trade barriers
Despite its intentions to liberalise trade, the 1995 EU-Turkey Customs Union Agreement led to major difficulties for EU spirits producers: excise tax and other discrimination was introduced; market access deteriorated; there were huge difficulties selling into an unpredictable and opaque trade regime. Despite the substantial difficulties, Turkey was considered, longer-term, to offer huge potential.
A close dialogue was established with Commission, Turkish and national officials with regard to each of the trade barriers. The politics were complicated and unpredictable but leverage for improvements came about through patience, diplomacy and a combination of Customs Union rules, EU accession negotiations and a Trade Barriers Regulation complaint.
Bit by bit, all the barriers came down. The dual import permit system was abolished, the certification regime improved and a more reasonable import clearance system established. In 2009, as a direct consequence of action taken by the sector years earlier in the accession negotiations, a timetable for excise tax harmonisation was agreed.
Excise Tax Battles
EU law requires all spirits, whatever the type and whatever the origin, to be subject to the same treatment in the country where they are sold. That is, regrettably, not always what happens.
In 2009 and 2010, to overcome problems with some local traders not paying excise tax, Romania sought to resolve the issue but introduced discrimination against imports – the latter had never been the problem. A political and technical dossier was submitted as a formal complaint to the European Commission which subsequently began legal proceedings. While Romania initially refused to act, at the point when it was to be publicly cited as failing to comply with its EU obligations, the authorities in Bucharest amended the rules and removed the discrimination.
In Bulgaria, importers faced regular problems with new rules and designs of ‘strip stamp’ – the paper bands on bottle caps which some countries believe protect tax revenues. When new stamps were announced for 2013, alarm bells rang because legislative adjustments since the previous change effectively meant stock in the market would have been confiscated and destroyed. With officials in Sofia refusing to discuss the issue, a technical dossier was submitted to EU and Bulgarian officials to show how the situation breached EU rules. This led to direct negotiations which resulted in all the concerns being resolved. Traders estimated this saved them at least €3 million.
In 2010 Hungary amended its legislation to exempt from tax its national fruit spirit, palinka. Further changes the following year were again incompatible with EU rules. With a dossier having been prepared to show how the changes breached EU rules, the Commission opened formal infractions proceedings against Hungary. The case proceeded to the European Court of Justice which, in 2014, confirmed that the tax regime was illegal. Regrettably, changes in 2015 were again problematic, and necessitated another complaint and another referral to the European Court of Justice. In 2018, Hungary finally removed all the discrimination.
CONTACT
Please get in touch to order the analysis of the new spirit drinks regulation, to discuss labelling issues or any other aspect of the EU legislative framework for spirit drinks, or to explore possible training requirements.
We will look forward to hearing from you.
