The EU has requested consultations at the WTO regarding what the former describes as discriminatory measures against spirits imported from the EU.
The decision was taken following a series of unsuccessful attempts to address Colombia’s taxation system on imported spirits and change practices that—according to the EU—distort market conditions and run contrary to monopolistic competition in the spirits market.
“EU spirits face higher taxes than local brands through higher national consumption tax and higher local charges,” the European Commission said. “Colombia’s regional authorities … impose market-access restrictions on imported spirits,” it added.
The first stage in the formal dispute settlement mechanism at the WTO are consultations between the parties.
Colombia is the largest market in the Andean Community, which also includes Bolivia, Peru, and Ecuador. It represents over one-third of EU spirits exports to the region, which amounted to €41.2 million in 2014, according to industry body SpiritsEUROPE in a statement celebrating the move.