Euro­pean pres­sure for tax hike on hum­ble Greek drink threat­ens en­tire town’s fu­ture

Kathimerini English - - Focus - BY DEREK GATOPOULOS

At Statiris taverna, the pa­trons’ faces are hard­ened from a life of hard work – truck driv­ers, builders, and farm­ers who’ve just ended their gru­el­ing grape harvest. There’s lit­tle talk of dif­fi­cul­ties at work or the coun­try’s fi­nan­cial cri­sis. This is a place where friends wan­der in to share a joke, or snack on a plate of fries and oc­to­pus with a late af­ter­noon glass of tsipouro, the po­tent lo­cal spirit.

A close rel­a­tive of the Greek spirit ouzo, tsipouro has be­come in­creas­ingly pop­u­lar dur­ing the re­ces­sion as an af­ford­able al­ter­na­tive to im­ported drinks, but is now fac­ing a tax in­crease un­der Euro­pean Union rules that could al­most dou­ble its price. Com­ing on top of a raft of other tax in­creases the gov­ern­ment is plan­ning to pay off debts, the news is a dis­as­ter for Tyr­navos, a farm­ing town in cen­tral Greece fa­mous for its pro­duc­tion of tsipouro.

“If I charge 4 eu­ros for a small bot­tle of tsipouro and sud­denly raise the price to 6 eu­ros, cus­tomers will cut back im­me­di­ately. They have no spare money in their pocket,” says Gior­gos Tsit­siroulis, who runs the taverna in this town of 20,000 peo­ple where many store signs are still hand-painted. “It will af­fect the en­tire area, be­cause it’s a prod­uct that’s en­tirely lo­cal. The grapes are from this area, the wood to fire the stills is lo­cal, the la­bels on the bot­tle are lo­cal, ev­ery­thing.”

Sim­i­lar to Ital­ian grappa or Turk­ish raki, tsipouro is a clear and pow­er­ful spirit that is pro­duced from twice-dis- tilled grape residue. It is made with and with­out anise fla­vor­ing, the ad­di­tion mak­ing the drink turn cloudy when wa­ter is added.

The EU has given Greece two months to dou­ble taxes on tsipouro, ar­gu­ing it does not have the right to keep a re­duced duty that is re­served for some tra­di­tion­ally made prod­ucts. It also wants Athens to crack down on small in­de­pen­dent pro­duc­ers who pay a low tax rate that is aimed at help­ing small pro­duc­ers but is now widely abused for bulk sup­ply to small restau­rants na­tion­ally.

For branded tsipouro, the tax in­crease would push up the re­tail price of a 700 ml bot­tle from roughly 10 eu­ros to 17 eu­ros, equal­ing the price of whisky and vodka.

Farm­ers will also feel the ef­fects of many new bud­get mea­sures, with bailout lenders de­mand­ing an end to cheaper fuel used in agri­cul­ture, higher in­come tax rates and larger ad­vance pay­ments on an­nual tax bills for the self-em­ployed.

“It’s a dou­ble hit for us,” said Vangelis Sika­los, man­ager at the Agri­cul­tural Win­ery Co­op­er­a­tive of Tyr­navos, the re­gion’s largest sin­gle tsipouro pro­ducer. “It will hit con­sump­tion... and re­sult in the de­cline of this ru­ral area, hurt­ing jobs. A huge part of the pop­u­la­tion works in vine­yards.”

Prime Min­is­ter Alexis Tsipras’s newly re-elected gov­ern­ment is pledg­ing to push through a bat­tery of cost-cut­ting mea­sures over the next six weeks that will af­fect farm­ers, the health ser­vice, pen­sion sys­tem and public ad­min­is­tra­tion in ex­change for con­tin­ued bailout loan pay­outs and res­cue money for its trou­bled banks.

Tsipras has al­ready warned the coun­try of the tough road ahead, with bud­get fore­casts this week see­ing another two years of re­ces­sion and un­em­ploy­ment above 25 per­cent.

Panayi­o­tis Papras, who grows wine grapes on 5 hectares, fears the new tax in­creases could force lo­cal farm­ers to switch from grow­ers to im­porters. “Grapes are the raw ma­te­rial. If they go, ev­ery­thing else fol­lows: the win­ery, the jobs there, all the shops that sell tsipouro in the area. Eighty per­cent of the grapes grown here are used for al­co­hol pro­duc­tion.”

Papras is the last farmer in the re­gion to fin­ish this year’s harvest, and is helped by work­ers from Al­ba­nia, who sit on beer crates snip­ping grape bunches off the vines – from the lo­cal red moschato and white rodi­tis va­ri­eties.

“Tsipouro is a poor man’s drink. The rich would drink the wine and what was left was used to make tsipouro for ev­ery­one else. So to tax it this way is re­ally un­be­liev­able,” he said.

De­spite its hum­ble ori­gins – the word tsipouro is de­rived from the Turk­ish word for grape po­mace, dat­ing back to the time of Ot­toman rule – the drink is a huge source of pride here and own­ing a still is a sym­bol of sta­tus. Pa­trons at Statiris taverna keep the tiny bot­tles com­ing. Truck driver Con­stas Parakos in­sists the town of Tyr­navos will never give up its love for the drink.

“If some­one can’t af­ford three carafes, he’ll buy two,” he said. “Tsipouro will never dis­ap­pear from Tyr­navos. Else­where it might, but not here.”

Gior­gos Tsit­siroulis, who runs a tav­ern, hands bot­tles of tsipouro to a waiter in Tyr­navos, cen­tral Greece. The Euro­pean Union has given Greece two months to dou­ble taxes on tsipouro.

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