France’s spirits industry urges the government to hold taxes steady

France’s spirits industry is pressing the government for tax and regulatory stability after another rise in costs and a continued drop in supermarket sales, even as bars, hotels and restaurants show modest improvement.

The warning came from the Fédération française des spiritueux, or FFS, which said the sector remains under pressure from weaker domestic consumption, a sharp export decline and tighter margins across both large companies and smaller producers. The federation argues that the combination is making day-to-day operations harder for many businesses in a category that it says supports 150,000 jobs in France, including 12,000 direct jobs and 45,000 indirect ones.

According to figures cited by the FFS from Nielsen, spirits sales in French mass retail fell again in 2025, down 2% by volume and 1.6% by value. The same trend continued through the first five months of 2026. Sales to the café, hotel and restaurant channel, known in France as CHR, improved by 1.1% in volume and 1.8% in value, but that outlet remains much smaller than supermarkets, representing about 21 million liters compared with 240 million liters sold through large retail chains.

Thomas Gauthier, the federation’s director general, told Agence France-Presse that the hospitality channel had regained some momentum but said the broader supermarket trend remained negative. He added that exports, which account for roughly half of company revenue in the sector, fell 17.4% by value in 2025. Facing both trends at once, he said, is especially difficult for producers.

The industry says traditional spirits continue to lose consumers in France, including whisky, rum and anise-based drinks. Other categories have held up better, including white spirits, some liqueurs and alcohol-free or flavored versions. After a flat 2024, spritz-style drinks, described by the federation as beverages combining a fermented base with sparkling elements, have started to recover.

The federation links the slowdown to several factors: changing consumer preferences, the effect of public health messaging, higher production costs for agricultural inputs, energy and logistics, and pricing pressure from large retailers. It says those forces are reducing margins throughout the supply chain.

In a business survey cited by the federation, two-thirds of producers reported weaker cash flow that is affecting their ability to operate on a daily basis. That strain matters beyond spirits alone because it can affect distributors, retailers and on-premise operators tied to beverage sales, especially in a market where wine, beer and spirits often compete for the same shelf space and consumer spending.

The group is asking public authorities for what it calls a stable framework to help the sector recover. Its demands include an end to what it describes as overlapping French and European rules on packaging and labeling, as well as fiscal stability ahead of France’s next budget debate.

Gauthier said producers are concerned that annual budget discussions often bring proposals to raise levies on alcoholic beverages. He said that on an average bottle sold in supermarkets for 18.50 euros, 72% of the price already consists of taxes. Any further increase, he warned, could erase efforts made by companies to adapt.

The debate comes at a time when French spirits makers are also trying to respond to environmental expectations and changing drinking habits. During its general assembly this week, the federation presented a four-year roadmap aimed at improving practices across sourcing, packaging and water protection.

Trade policy is also part of the picture. On Wednesday, a commercial agreement between Washington and the European Union took effect, capping tariffs imposed by President Donald Trump at 15% on certain European products including spirits. SpiritsEurope welcomed the deal as a basis for continued dialogue and called for European spirits to be prioritized in future talks with the goal of returning tariffs to 0%, which was the situation before the Trump-era duties.

For beverage companies watching France, one of Europe’s key markets for premium alcohol, the industry’s message is clear: demand remains fragile at home, exports have weakened sharply and producers want fewer policy shocks while they try to adjust to new consumer habits and rising costs.