Business · Trade · 3 hrs ago
Brazil’s new alcohol tax may limit wine gains from EU trade deal
Brazil’s new tax will apply to domestic and imported wine, including European bottles.
Most wines are set to face an 8% rate in 2027, while fortified wines with more alcohol, such as Port and Sherry, will face 16%.
The tax is scheduled to begin on February 2, 2027.
The Mercosur-EU trade deal is gradually reducing import tariffs on European products, and wine businesses had expected those cuts to make European wines more competitive in Brazil.
The new tax could reduce some of that benefit, and importers say at least part of the added cost may reach consumers.
Lower-priced wines may be more affected because their buyers are more sensitive to price changes.
The tax applies equally to Brazilian and imported wine, while the deal’s tariff cuts are phased in over time.
Brazil’s new Selective Tax on alcoholic drinks may reduce some of the expected benefits of the Mercosur–European Union trade deal for wine.
A provisional measure published on November 4 sets a 2027 rate of 8% for most wines and other fermented drinks, and 16% for fortified wines with higher alcohol content.
The tax is due to begin on February 2, 2027, and applies to domestic and imported wines.
Wine-sector representatives warn that the tax could put pressure on prices, company margins and formal businesses.
The trade deal was provisionally applied from May 1, 2026, and was expected to lower import tariffs on European wines.
- Who
- Brazil’s government set the tax; wine importers and industry representatives discussed its potential effects.
- What
- A new Selective Tax on alcoholic drinks may limit some expected gains for wine from the Mercosur–EU trade deal.
- When
- The measure was published November 4, 2026. The tax is due to start February 2, 2027.
- Where
- Brazil.
- Why
- The trade deal is expected to reduce import tariffs on European wines, while the new tax applies to imported and domestic wines.
This story does not have two clearly opposing sides.
The Mercosur–EU trade deal began provisional application.
Provisional Measure 1.399/2026 was published, setting Selective Tax rates for most wines and other fermented drinks.
The new tax is scheduled to begin.
- Most wines and fermented drinks
- 8% tax rate in 2027
- Fortified wines with higher alcohol content
- 16% tax rate
- Tax start date
- February 2, 2027
- Wine sold in Brazil estimated to be contraband
- About 30%
What people are saying
The increase in the tax burden tends to be passed on, at least in part, to the final consumer.
The creation of a new tax on wine represents an additional obstacle.
Any additional increase harms the formal market and the consumer, as well as widening the advantage of those operating illegally.
The government could significantly increase revenue by tackling this practice, which creates unfair competition and harms companies that pay their taxes.