For inexpensive wine, we'll always have Paris

ECONOMIC NAVIGATION AND SIGHTSEEING

July 20, 2008|By Jay Hancock

Here in Paris, Coca-Cola is 10 dollars a glass. A grilled cheese sandwich is 10 dollars. And gas is 10 dollars a gallon. But France still offers one good deal to Americans - and the French and everybody else. A decent bottle of wine is 2 or 3 euros - 3 dollars to 5 dollars. A great bottle can be had for 10 or 15 dollars. (I'm violating Sun style by spelling out monetary amounts, but my French keyboard doesn't have a dollar sign! At least not that I can find. It also has the letters "w" and "m" and "a" and a bunch of other stuff in the "wrong" places.)

The reasons are subsidies, taxes and the fact that wine is France's holiest agricultural product. Government subsidies keep wine production cheap, and in the store, wine carries virtually no tax. French wine purchased in France carries no European tax. And the French national levy is only about three cents per bottle. This sharply contrasts with the situation in Maryland, the rest of the United States and many other nations, where alcohol is taxed at penalty rates accompanied by lectures on temperance.

Not everybody is happy about bargain French wine. Scandanavian nations, especially, highly tax alcohol and want wine-producing nations such as France and Italy to catch up. Every few years, some French policymaker will propose increasing the wine tax by a few pennies to underwrite the country's expensive health system or some other worthy cause. The wine industry - and France itself - then goes nuts.

"It's a scandal," Jean-Francois Delorme, president of the Burgundy Wine Interprofessional Bureau, was quoted as saying a few years ago, when politicians had proposed a modest increase. "They are trying to assassinate wine at a time that consumption is already falling in France."

France is unhappy with the high fuel taxes, which make gas so expensive. But better that than higher wine taxes.

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