Wine Law

protect tariffs against foreign competition and to exempt customs taxes for commodities and capital goods applied to industry. That same year, the Ministry of Finance issued many decrees limiting the importation of luxury items, including wine 29 . These measures, which basically sought to promote the national industry, had rather an unfavourable effect on the wine sector, as wine producers continued to work with imported concentrated must, which, due to its cost, was more profitable. This landscape only changed, as said before, due to the loss of purchasing power of the bolivar against the dollar. On imports, the signing, in 1993, of the Economic Complementation Agreement No. 23 between Venezuela and Chile 30 is worth mentioning. This Agreement happened within the framework of the Latin American Free Trade Association (LAFTA) and grants Chilean wines a 100% tariff preference, with which the tariff was 0% for their entry in Venezuela. This, of course, had an impact on the consumption of Spanish, French and Italian wines, which were the main competitors of Chilean wines: “If there is a country in the world that knows how the wine industry has evolved in Chile, it is Venezuela” 31 . Regarding tax law, in 1985, the first Law on Tax on Alcohol and other Alcoholic Species 32 was enacted. Its objective was, and continues to be, to discourage the consumption of alcoholic beverages. Thus, a tax of 0.10 bolivars per litre was decreed on nationally produced wine obtained by the total or partial alcoholic fermentation of the grape juice or must, when its alcoholic graduation does not exceed 14º Gay-Lussac. The same tax will be paid in the case of mistelas made by fermentation and sangrias without the addition of alcohol. Furthermore, liquor or compound wines and alcohol-added sangrias, of national production, will pay a tax of 6.00 bolivars for each litre of alcohol they contain, referred to 100º Gay-Lussac (Art. 12). Imported wines would pay a tax of 0.30 bolivars (Art. 13, ordinals 6, 7 and 8). The Law also exempted wine from the minimum annual production to which it subjected the other alcoholic species. 29 Lucas, Gerardo, Industrialización contemporánea en Venezuela. Política industrial del Estado venezolano 1936-2000 , Caracas, Conindustria, Universidad Católica Andrés Bello, 2006, pp. 67 and 72. 30 Source : http://www.sice.oas.org/Trade/chiven/CHVENTOC.asp. 31 Viloria, Guía del Vino …, op . cit ., p. 106. 32 Special Official Gazette No. 3.574, 21 June 1985.