Line of duty

Drink is cheap in Spain. Indeed, it has been described as a boozer’s paradise, but is the label justified? In rigidly regimented tax regimes, notably those of northern Europe, the system is straightforward and implacable. The state merely adds tax to the price of the bottle depending on its alcohol content, and that is what the government is entitled to receive – no arguments, no exceptions.

However, as in many such matters, the further south we go the more flexible things become, and, as we will see, wine-producing regimes get special treatment for their star product. Spirits are normally taxed on pure alcohol content, and the more there is, the more the consumer pays. Other considerations affect the taxman’s calculations, and the tax may be higher to discourage consumption for health reasons.

Happily, a bottle of wine in Spain carries no duty but is subject to 21 per cent VAT. Whisky is calculated on alcohol content, working out at 2.80 euros a bottle. Looking deeper it is obvious that wine is often taxed lightly or not at all owing to cultural importance and domestic production.

Sherry is a fortified wine but in EU law it is classified the same as table wine and pays less duty per millilitre than beer. Spain’s cava is tax-free whereas in many countries sparkling wine and champagne get hit hard, being considered luxury items. Public health goals, cultural preferences, industry lobbying. It is in fact part science, part politics, part social engineering, and for discerning aficionados opens its arms to lovers of sherry. Happy drinking!