The Czech government has decided to sue the European Commission over the new denatured alcohol guidelines that are to come into effect as of August 2017. Prime Minister Bohuslav Sobotka said the government’s decision was a last-ditch effort to prevent their introduction, since the new rules and a single “Euro” formula would create considerable space for fraud and tax-evasion.
Under EU rules, alcohol which is not intended for human consumption is exempt from excise duties. This includes, for example, alcohol used for industrial purposes, in the production of foodstuffs and medicines, cosmetics, biofuels, paints, anti-freeze and cleaning products. Alcohol not intended for human consumption must be "denatured" i.e. rendered undrinkable with the addition of foul tasting or smelling agents and a chemical marker. This is to prevent tax fraud and protect consumers from the health risks of illegal alcoholic drinks.
Several years ago the European Commission launched a fundamental review of the provisions for denatured alcohol, aiming to reduce fraud and administrative burdens caused by too many national denaturing processes, of which there are currently over 150. This led to the creation of a single “Euro” denaturing formula which would be chemically irreversible.
The commission claims that the unified formula will guarantee complete denaturisation and the risk of fraud—changing denatured alcohol back to potable alcohol—will be significantly reduced. Experts say that, in reality, irreversibility is always a price issue.
Experts from the Czech finance ministry also claim that the single denaturing formula is far from irreversible and creates ample room for tax evasion. Moreover tests apparently revealed that consumers failed to detect the difference when given samples of alcohol intended for human consumption and ethanol laced with the “Euro” formula.
The new Euro formula was tested at the technical laboratory of the Czech Customs Directorate which concluded that, in addition to being easily reversible, it was three to four times as expensive as the current denaturing compositions used.