Portugal's Wine Giants Push Parliament to Keep Taxes Flat

Portugal’s wine cellars are raising their voices again. Days before Parliament begins to dissect the State Budget, the country’s most influential beverage lobby is asking lawmakers to keep taxes on wine, sparkling wines, Port, and other spirits exactly where they are. Supporters say the request protects a cornerstone of the national economy; critics warn that freezing duties on alcohol ignores mounting health costs and a looming warning from Brussels.

A tax freeze that divides opinions

For the Associação de Vinhos e Espirituosas de Portugal (ACIBEV) the stakes are clear: any rise in the Imposto sobre as Bebidas Alcoólicas e Não Alcoólicas (IABA) could undermine export momentum just as global demand begins to recover. The group insists that the current zero-rate IABA on table wine, the 13 % IVA on still bottles and the 23 % IVA applied to fizz should remain untouched. It is equally adamant that the existing €1 602.51 per hectolitre levy on strong spirits must not creep up again after last year’s freeze.

Health economists counter that Portugal already lags behind most EU peers in alcohol taxation, pointing to a 2024 report showing that an extra 50 % price hike could avert thousands of premature deaths. They describe the proposed stand-still as a “political gift to the sector” that risks higher long-term costs for the Serviço Nacional de Saúde.

What ACIBEV wants

ACIBEV’s executive director Ana Isabel Alves delivered a blunt message this week: “Do not disturb a regime that works.” The association argues that Portuguese wine enjoys a unique competitive edge abroad precisely because it is spared any excise burden at home. She also reminded MPs that the Government already agreed to extend the 25 % IABA discount on traditional fruit-based liqueurs until the end of next year.

Behind closed doors, the lobby is also pushing for broader corporate relief: lower IRC, lighter municipal surtaxes, and—crucially—no introduction of a minimum unit price (MUP) that would link retail cost to alcohol strength. Industry figures say a MUP would punish low-income consumers while doing little to curb heavy drinking; public-health advocates reply that evidence from Scotland and Ireland shows the exact opposite.

The numbers behind the lobby

Hard data helps explain ACIBEV’s confidence. In 2024 Portugal exported 329 million L of wine worth roughly €899 M, a 10.1 % jump in volume and 4.3 % in value versus the previous year. Domestic payrolls also hit a record, with 12 200 direct jobs in wineries and bottling plants. When indirect employment is counted—from cork production to wine tourism—the sector supports an estimated 168 000 posts, or about 3.4 % of the national workforce.

The Treasury, for its part, collected €50 M in spirit-related IABA revenue during the first five months of 2025, up from €42 M a year earlier. Officials attribute the uptick to stronger consumption, not higher rates, bolstering the lobby’s argument that stable taxation can still fatten state coffers.

Brussels rings the bell

Yet a fresh challenge is brewing in Luxembourg, where the European Commission has opened an infringement procedure over Portugal’s practice of granting a zero excise rate to fortified wines whose alcohol content is boosted artificially. EU law requires a higher duty on beverages above 15 % ABV unless the strength comes solely from natural fermentation. Lisbon now has months—not years—to align its code, or face referral to the European Court of Justice.

Legal experts warn that compliance could force a partial rethink of the cherished IABA exemption, regardless of what MPs decide in the upcoming Orçamento do Estado 2026. ACIBEV says it is preparing a technical dossier to prove that most fortified Portuguese wines remain within EU carve-outs, but the Commission’s letter has already changed the political mood.

Public-health pushback

Medical societies wasted no time seizing the moment. The Sociedade Portuguesa de Pneumologia branded the idea of frozen taxes “irresponsible,” arguing that alcohol, like tobacco, demands periodic price shocks to keep consumption in check. They cite government success with sugary-drink duties, where a modest levy cut per-capita intake by 7 % within two years.

The clash underscores an uncomfortable duality: Portugal champions wine as a cultural treasure—even UNESCO lists the Alto Douro landscape—but grapples with one of Europe’s highest per-capita alcohol consumption rates. According to the World Health Organization, alcohol causes 1 500 avoidable deaths in the country each year, adding €200 M in hospital costs.

What happens next

Finance Minister Joaquim Miranda Sarmento says he wants “minimal tax tinkering” in the 2026 budget, hinting that any hard decisions on excise could be pushed to separate legislation in 2026. Parliamentary debate begins on 27 October, with a final vote slated for 27 November.

Between now and then, lobbyists will highlight every export order and tourism euro tied to Portuguese wine, while doctors will emphasize every hospital bed occupied by alcohol-related disease. Brussels’ infringement case hangs overhead, ready to override domestic politics if Lisbon stalls.

For now, your next glass of tinto will cost the same. Whether that remains true into harvest season 2026 depends on an intricate dance between industry clout, public-health arithmetic and EU law—an equation Portuguese lawmakers must solve before the year is out.