Thus, France decided to tax liquors made out of grain at a very high rate (vodka, whisky, etc., none of which is made in France), and fruit and nut based liquors at a very low rate (cognac, armagnac, etc. those made in France).

The EU argued that both types are essentially the same product, and thus should be taxed at the same rate, whereas France argued that grain liquors are aperitifs, whereas fruit liquors are digestifs, and thus there is no competition between the two and the different taxation is justified.

And thus, we have a case, Commission v. France, Case 168/78, in which there is an extensive discussion of what is an aperitif and a digestif.

From the case (one might think it was written by Monsieur Chariot):

THE DEFENDANT GOVERNMENT STATES THAT THE FRENCH TAX LEGISLATION IS BASED ON THE DISTINCTION BETWEEN ' ' DIGESTIVES ' ' ON THE ONE HAND , IN OTHER WORDS BEVERAGES CONSUMED AT THE END OF THE MEAL INCLUDING IN PARTICULAR SPIRITS OBTAINED FROM THE DISTILLATION OF WINE AND FRUIT, SUCH AS COGNAC, ARMAGNAC AND CALVADOS , AND ' ' APERITIFS ' ' ON THE OTHER, WHICH ARE BEVERAGES DRUNK BEFORE MEALS INCLUDING ABOVE ALL GRAIN-BASED SPIRITS, MOST FREQUENTLY CONSUMED DILUTED WITH WATER, SUCH AS WHISKY, GIN AND ANISEED SPIRITS.

[...]

NOR DOES THE COURT THINK IT IS POSSIBLE TO ADOPT AS A RELEVANT CLASSIFICATION THE DISTINCTION ADVOCATED BY THE FRENCH GOVERNMENT BETWEEN ' ' APERITIFS ' ' AND ' ' DIGESTIVES ' '... IN FACT , THE DISTINCTION BETWEEN APERITIFS AND DIGESTIVES DOES NOT TAKE INTO ACCOUNT MANY CIRCUMSTANCES IN WHICH THE PRODUCTS IN QUESTION MAY BE CONSUMED BEFORE , DURING OR AFTER MEALS OR EVEN COMPLETELY UNRELATED TO SUCH MEALS; IT SEEMS, MOREOVER, THAT, ACCORDING TO CONSUMER PREFERENCES THE SAME BEVERAGE MAY BE USED INDISCRIMINATELY AS AN ' ' APERITIF ' ' OR ' ' DIGESTIVE ' '. [Ed: the horror!] THEREFORE IT IS IMPOSSIBLE TO RECOGNIZE, FOR THE PURPOSES OF THE APPLICATION OF ARTICLE 95 OF THE TREATY, THE OBJECTIVE VALUE OF THE DISTINCTION UPON WHICH FRENCH TAX PRACTICE IS BASED.

THE SAME OBSERVATION APPLIES TO THE CRITERION FOR DISTINCTION BASED ON THE FLAVOUR OF THE VARIOUS SPIRITS FOR THE PURPOSE OF DETERMINING THE PROPERTIES OF THE PRODUCTS IN QUESTION WITH REGARD TO THE APPLICATION OF TAX LEGISLATION. THERE IS NO QUESTION OF DENYING THE REALITY OF AND THE SHADES OF DIFFERENCE IN THE FLAVOUR OF THE VARIOUS ALCOHOLIC PRODUCTS; IT IS NECESSARY HOWEVER TO BEAR IN MIND THAT THIS CRITERION IS TOO VARIABLE IN TIME AND SPACE TO SUPPLY BY ITSELF A SUFFICIENTLY SOUND BASIS FOR DISTINCTION FOR THE DEFINITON OF CATEGORIES WHICH MAY BE RECOGNIZED THROUGHOUT THE COMMUNITY. THE SAME APPLIES TO CONSUMER HABITS WHICH ALSO DIFFER FROM REGION TO REGION AND EVEN ACCORDING TO SOCIAL ENVIRONMENT, SO THAT THEY CANNOT SUPPLY APPROPRIATE DIFFERENTIATING CRITERIA FOR THE PURPOSE OF ARTICLE 95.

CLASSIFICATIONS BASED ON THE FLAVOUR OF THE PRODUCTS AND CONSUMER HABITS ARE ALL THE MORE DIFFICULT TO LAY DOWN SINCE THE PRODUCTS IN QUESTION, SUCH AS WHISKY AND GENEVAS, MAY BE CONSUMED IN VERY VARIED CIRCUMSTANCES , EITHER NEAT OR DILUTED OR IN THE FORM OF MIXTURES. OWING IN PARTICULAR TO THIS FLEXIBILITY OF USE , THOSE DRINKS MAY BE CONSIDERED AS SIMILAR TO A PARTICULARLY LARGE NUMBER OF OTHER ALCOHOLIC BEVERAGES OR AS IN AT LEAST PARTIAL COMPETITION WHICH THOSE BEVERAGES.