01 Apr Vessel tanks volumizing
The Greek Wine Association as a representative of private winery invites the Ministry of Finance to review the issue of wine tanks volumizing. Alternatives exist. At a recent meeting with Deputy Finance Minister Ms. Papanatchiou, we received the assurance that we will discuss and exhaust the room to avoid the implementation of an unbearable measure for a sector that everyone remembers from time to time as an example of growth and who, however, was not asked about it.
Decision 30/003/000/1614 (Government Gazette B1624 / 2018) laid down the conditions for the titration of wine tanks, thus completing the legal status of the NCA. in wine, creating a very large financial burden on wineries. The decision was taken without the slightest prior consultation of the industry.
Measure unfair and disproportionately burdensome
Of course, the decision leaves a margin until 31.12.2019 in order for the wineries to take the relevant actions. As the Hellenic Wine Association pointed out in a related memo to the Ministry of Finance, this deadline is, despite the phenomena, suffocating. Titrating in principle implies that the tanks under measurement are empty, which is the case in the pre-harvest period. In other words, winemaking firms will have only a few months (in the spring and summer of 2019) to complete this process.
The enforcement of the measure has a particularly delicate aspect, which should be clearly highlighted: the titration of tanks for different reasons adversely affects both small and large wineries, irrespective of the commercial policy they follow. With market prices averaging around 500 euros per tank, for small wineries the cost is very high due to their generally low turnover. For large wineries, the number of tanks is such that the cost, according to rough estimates, amounts to tens of thousands of euros. Whatever the size, wineries, which, for quality reasons, make complicated oenological practices (aging, discharging, stirring …), which require a large number of tanks, are particularly affected.
It should also be emphasized that this decision (like the one for distillers) repeats in its annexes word for word the provisions of decision 30/005/648 / 19-09-2013 (Government Gazette B 2406), on volumetric storage of energy products. And because in legal and technical regulations “the devil is in the details,” we find further difficulties in implementing the measure. Annex IV (IV) requires volumetric methods (using water) for tanks of up to 50 m3 instead of geometric methods. However, unlike fuel companies, tanks of up to 50 m3 are the overwhelming majority in wineries. Applying only volumetric methods makes the measure time-consuming, while water use is environmentally burdensome.
Lastly, it should not be forgotten that the application of the proposed excessively stringent wine tundling rules is an economic ominous: in order for the state to be able to reimburse some extra tens of euros per tank the winemaker is required to pay hundreds or even thousands of euros (depending on the volume of the tank) for its oscillating.
“French key” for volumes in Greece?
And yet: tank titration is not legally one-way in the event of a NFI enforcement. in the wine. The Directives 92/83 / EEC and 92/84 / EEC harmonizing excise taxes do not impose such a requirement. This is illustrated by the case of France, where compulsory tanks titration, especially for wines, was abolished in 2016. In the legislative act based on 1945, France imposed an obligation titration tanks wine with the October 1977 decision under pressure of the wine industry and the competitive disadvantage that caused the financial burden of titration for French wine against countries not applying the measure, by decision no. 2016-1585 of 24/11/2016 abolished the obligatory titration of the tank which had been imposed in 1977, especially the wine, while remaining on the intermediate products and ethyl alcohol. You have to stand in this distinction, given and our house: taxation of wine remains low compared with that of ethyl alcohol. The French tax legislature considered that the political stakes income was disproportionately small to relate to the costs incurred by the wineries.
According to the explanatory report on the abolition of the volumetric obligation in France, calculation of the volume of the final product can be assured by other means, such as the use of volume meters, the use of volumetric tankers for the transport of wine or must, the use of certain volumetric tanks as cash for the total taxable amount. And of course, this enumeration is indicative. The taxpayer has the ability to use any appropriate means to determine the volume of the tanks. Such is, in fact, the determination (even in the form of ex-post verification) of the taxable material’s movement documents (given for example that the wine transport tanks at the exit point are volumetric and that the volume can be calculated cumulatively of the wine bottled).
In addition, in the case of France, the cost of titration, when it is mandatory (currently for ethyl alcohol), is regulated by law (EUR 1.40 per hectolitre) and is not freely determined by the market nor depends on the number of tanks. This regulatory intervention is legally permissible (at least in the sense of setting a maximum price) as it is a public service.
On the line now, it is necessary to lift the impasse in which Greek winemaking has come. The solutions are many and should, in combination or alternatively, be applied to our businesses, of course, of legitimacy:
- Application of alternative ways of measuring wine volumes, according to French standards.
- Estimation of the cost of providing the volumetric service or, alternatively, control of the purchase prices by the Competition Commission.
- Simplify the titration and certification process of volumetric service providers in order to benefit the winners (as well as distillers and drinkers) of the competition.
- Identification of all alternative volumetric methods according to Metrology standards, regardless of tank volume.
- Priority inclusion in the investment program of the cost of supplying tank volume meters.
- Passing responsibility for the titration of new tanks to the manufacturer.
- Extension of the deadline for determining (by titration or other methods) at least until 31.12.2023.
And, of course, in the case where the rate of the NCA become zero, as the Government has publicly committed to the utmost, the application of the mandatory tinkering measure of tanks, even with tight deadlines, would be iconoclastic, if not non-atavistic. In such a case, it is appropriate to “freeze” the measure.
The Greek Wine Association as a representative of private winery invites the Ministry of Finance to review the issue of wine tanks volumizing. Alternatives exist. At a recent meeting with Deputy Finance Minister Ms. Papanatchiou, we have been assured that we will discuss and exhaust the room to avoid an unbearable measure for an industry that everyone remembers from time to time as an example of growth and who has never been asked.
Theodoros Georgopoulos is General Manager of the SEA, President of the Campania Vine & Wine Institute (Reims, France) and Attorney-at-Law