With the new taxation laws in France on alcohol that came in on the 1st of January 2012, the cost of each pure hectolitre of alcohol to be used for cognac has now risen.
Whilst in 2011 cognac producers were paying €1,514.47 per hl, the cost has now risen to €1,660 per hl – a rise of almost 10 per cent. Not only that, but the new law has also incurred rises in the social security contributions as well. These have risen from the old level of €7.66 per litre to €8.77.
However, other beverages will benefit from the new tax and social security contribution laws – namely that of drinks such as pineau des Charentes and other fortified wines. For these, the price of a hectolitre of pure alcohol will decrease from €223.51 down to €180 per hl.
It’s all a little confusing, and the new taxation levels are to do with the amount of contained in the particular drink. All drinks with alcohol levels of 18% upwards are concerned, with two varying levels depending on the percentage proof of the drink.
We’ll have to see if this means that prices of our beloved cognac will rise to cope with these increased expenses in production.