Red Bull welcomes French court action to strike out energy drink tax
The Conseil Constituionnel considered Article 25, situated in a general tax code section of the annual Loi de Finacement de la Sécurité Sociale pour 2013 (Social Security Finance Law 2013), as part of its consideration of the government’s legislative plans for social security financing.
(The Conseil Constitutionnel ensures that the principles and rules of the French constitution are upheld, principally that statutes conform thereto after being voted through by Parliament, before they are signed into law by president François Hollande.)
The government’s planned to tax energy drinks at €50/hectoliter ($65.9 per US 26.4 gallons), ostensibly on public health grounds, to limit energy drink consumption with alcohol amongst young people in particular.
‘Rational and objective’ criteria lacking
But striking down Article 25, the court stated that the proposal was not based on ‘rational and objective’ criteria; a Red Bull spokeswoman told BeverageDaily.com this morning the firm “welcomes the ruling”.
“It appears that via the parliamentary work establishing this specific contribution [tax], the legislator intended to limit the consumption of ‘energy drinks’ rich in caffeine or taurine, which, mixed with alcohol, have negative consequences on the health of consumers, particularly the young.
“[But] in taxing drinks not containing alcohol, in the fight against alcohol consumption amongst the young, the legislator has established a tax which is not founded on objective and rational criteria in line with the objective followed.
“That, therefore, it has disregarded the demands of Article 12 of the 1789 Declaration.”
Blow to health minister
The tax is a blow to the Hollande administration in France, since health minister Marisol Touraine said in a late-October interview that she favored the principle of a specific tax on energy drinks.
Such drinks contained powerful stimulants, the health impact of which was under investigation by French public health agency ANSES (Agence Nationale de Sécurité Sanitaire), on her request, Touraine added.
But the French court decision will undoubtedly be greeted with relief, especially among smaller energy drink brands.
The owner of one of such French brand, Truc de Fou, told La Nouvel Observateur in October that he would have to lay off staff if the amendment instituting the tax became law.
Coca-Cola Enterprises (CCE) France (which carries Monster and Burn within its French portfolio) did not reply to our request for comment prior to publication.
The full Conseil Constituionnel decision is available in French here.
