Tax hike on humble Greek drink threatens town's future

Before you go, we thought you'd like these...
Before you go close icon

16 PHOTOS
NTP: Greece spirit tax threatens town
See Gallery
Tax hike on humble Greek drink threatens town's future
In this photo taken on Monday, Oct. 5, 2015, an Albanian worker holds a cart at a vineyard in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, Julieta Kasa an Albanian worker cuts grapes at a vineyard in Tirnavos, central Greece. 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 steep tax increase under European Union competition rules. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, Nikos Kasa an Albanian worker loads a tractor with crates of grapes at a vineyard in Tirnavos, central Greece. 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 steep tax increase under European Union competition rules. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, Giorgos Tsitsiroulis, who runs a tavern, hands bottles of tsipouro to a waiter in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, Vagelis Sikalos, manager of the agricultural winery cooperative, checks the stills in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, customers at a tavern clink glasses filled with tsipouro in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
Valia Vassiliou, a chemist of the agricultural winery cooperative fills a glass with tsipouro for testing in Tirnavos, central Greece. The European Union 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.(AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, Valia Vassiliou, chemist of the agricultural winery cooperative takes a bottle of tsipouro for testing in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, a worker of the agricultural winery cooperative keeps notes on the quality of tsipouro in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, the shadows of workers are cast on a wall as they dumping crates of grapes into a destemmer and crushing machine at the agricultural winery cooperative in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, workers dumping crates of grapes into destemmer and crushing machine at the agricultural winery cooperative in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, workers drop crates of grapes into destemmer and crushing machine at the agricultural winery cooperative in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, a worker loads boxes with bottles of tsipouro at the tracks of the agricultural winery cooperative in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, Valia Vassiliou, a chemist of the agricultural winery cooperative sniffs a glass of tsipouro in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
In this photo taken on Monday, Oct. 5, 2015, a tractor carries crates of grapes at a vineyard in Tirnavos, central Greece. The European Union 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. (AP Photo/Thanassis Stavrakis)
of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

TIRNAVOS, Greece (AP) -- At Statiris Tavern, 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.

SEE ALSO: 6 Greek islands lose sales tax break

Coming on top of a raft of other tax increases the government is planning to pay off debts, the news is a disaster for Tirnavos, a farming town in central Greece famous for its production of tsipouro (pronounced TSEE-poo-roh).

"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 tavern 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-distilled grape residue. It is made with and without anise flavoring, the addition making the drink turn cloudy when water is added.

The European Union 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 700ml (0.18 gallon) bottle from roughly 10 euros to 17 euros ($19), equaling the price of whisky and vodka.

Farmers will also feel the effects of many new government 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 Vagelis Sikalos, manager at the Agricultural Winery Cooperative of Tirnavos, 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. The crisis in Greece will be magnified in Tirnavos."

Prime Minister Alexis Tsipras' 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, who needs a vote of confidence from the new parliament at midnight Wednesday, has already warned the country of the tough road ahead with budget forecasts this week forecasting another two years recession and unemployment above 25 percent.

Panagiotis Papras, who uses 5 hectares (12 acres) to grow wine grapes, 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.

Related: Graffiti artists tackle the Greek financial crisis:

14 PHOTOS
Graffiti artists tackle Greece's financial crisis
See Gallery
Tax hike on humble Greek drink threatens town's future
In this photo taken on Monday, June 22, 2015 a woman walks next a mural about the Greek financial crisis in Athens. Graffiti in Athens used to be all about football, politics or teenage crushes. Now, most of the serious work is inspired by the country’s financial and social woes. (AP Photo/Petros Giannakouris)
In this photo made on Saturday, June 20, 2015, a man walks past a graffiti work by Greek street artist Bleeps in Athens. Over the past five years of Greece’s economic depression, more and more paintings comment on the country’s financial and social woes. (AP Photo/Petros Giannakouris)
In this photo taken on Saturday, June 20, 2015, a man walks past a mural of a banknote resembling a US dollar bill by street artist N_Grams in Athens. Over the past five years of Greece’s economic depression, more and more paintings comment on the country’s financial and social woes. (AP Photo/Petros Giannakouris)
In this photo made on Saturday, June 20, 2015, a woman walks past two murals, on the right made by street artist EX!T and on the left, by N_Grams in Athens. Graffiti in Athens used to be all about football, politics or teenage crushes. Now, most of the serious work is inspired by the country’s financial and social woes. (AP Photo/Petros Giannakouris)
In this photo made on Thursday, June 18, 2015 a man walks behind a stencil depicting German Chancellor Angela Merkel as a Disney character in Athens. Over the past five years of Greece’s economic depression, more and more paintings comment on the country’s financial and social woes. (AP Photo/Petros Giannakouris)
In this photo made on Saturday, June 20, 2015, a man walks past graffiti titled "0 Euro" by street Artist Achilles in Athens. (AP Photo/Petros Giannakouris)
In this photo taken on Thursday, June 18, 2015 a man walks past a 2014 graffiti artwork titled "5€" by street artist Wild Drawing in Athens. Flanked by the shuttered windows of an abandoned old house, a haggard face supported in its hands looks out of a wall. On the crepitating stucco below, a battered 5-euro banknote is painted. (AP Photo/Petros Giannakouris)
In this photo taken on Thursday, June 18, 2015 a work called "I Need Job, Not Speech" by artist Wild Drawing. The mural refers to Greece's shockingly high unemployment rate, which despite a small decrease remains higher than 25 percent. (AP Photo/Petros Giannakouris)
In this photo taken on Thursday, June 18, 2015 a stencil work by an artist who uses the name Wild Drawing shows a fake road sign with a little car in the blue and white Greek colours tumbling off a crumbling euro currency sign into the water. It’s called “Keep Away.” Over the past five years of Greece’s economic depression, more and more paintings comment on the country’s financial and social woes. (AP Photo/Petros Giannakouris)
In this photo made on Wednesday, June 17, 2015 a woman walks past a graffiti artwork titled "Athena vs Europa, Resist vs Submit" by French street artist Goin at the Athens School of Fine Arts. Over the past five years of Greece’s economic depression, more and more paintings comment on the country’s financial and social woes. (AP Photo/Petros Giannakouris)
In this photo made on Wednesday, June 17, 2015 a woman walks past a graffiti by street artist Cacao Rocks in Athens. The idea for the work is three years old, the artist said, but added: “I have changed, I don’t take drugs any more or go to parties, but Europe just won’t grow up.” (AP Photo/Petros Giannakouris)
In this photo taken on Wednesday, June 17, 2015, a woman walks past a graffiti artwork titled "Death of Euros" made by French street artist Goin at the Athens School of Fine Arts. Over the past five years of Greece’s economic depression, more and more paintings comment on the country’s financial and social woes. (AP Photo/Petros Giannakouris)
A pedestrian passes graffiti, depicting a protester squeezing a Euro, in Athens Monday, June 22, 2015. European officials were cautious about the prospects of reaching a comprehensive deal on Monday to keep Greece from defaulting and falling out of the currency union, despite optimism in financial markets. (AP Photo/Thanassis Stavrakis)
of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

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.

Elderly residents often enjoy a pre-noon shot with their coffee, and the drink adds a little wobble to some of the town's cyclists.

Patrons at Statiris Tavern keep the tiny bottles coming as they sit by walls decorated with old shipping paraphernalia, religious icons, and two large photographs of the Marxist revolutionary Che Guevara.

Truck driver Constas Parakos insists the town of Tirnavos 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 Tirnavos. Elsewhere it might, but not here."

--

Follow Gatopoulos at http://www.twitter.com/dgatopoulos

Related: Greece readies painful 2016 budget:

Greece Readies Painful 2016 Budget

More on AOL.com:
Glass-bottom bridge cracks under tourists
McCarthy tells GOP conservatives 'I'm not John Boehner'
Iran's supreme leader bans negotiations with the United States

Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners