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Last Updated: Thursday, 23 November 2006, 11:01 GMT
No change for EU alcohol market
Stocking up on alcohol in France
Many Britons go on "booze cruises" across the English Channel
The European Court has ruled against making it easier for European consumers to buy cigarettes and alcohol from countries where excise duties are low.

High-duty countries like the UK had risked losing large amounts of revenue.

It means that shoppers who want to take advantage of low duty and VAT in other states will still need to go there and bring back the goods themselves.

Had the ruling gone the other way, consumers of alcohol and tobacco could have gone on an internet bargain hunt.

As regards products acquired by private individuals for their own use and transported by them... excise duty shall be charged in the member state in which they are acquired
EU directive the court had to interpret

Observers had predicted an end to Britons, Danes, Swedes and Finns going on "booze cruises" to neighbouring countries to buy cheaper alcohol.

The UK government already loses duty of more than 1bn (1.5bn euros) per year because of booze cruises, and would have stood to lose a lot more.

Duty on a bottle of wine varies from nothing in 13 EU countries, to 2.1 euros in Ireland, and the price of cigarettes varies by a factor of 12.

Wine lovers

Duty on wine graphic

The European Court was asked to interpret EU law by the Dutch Supreme Court, after a Dutch wine club objected to being charged duty on a lorry-load of wine delivered from France.

An official adviser to the European Court of Justice said the club chairman who ordered the delivery should only pay duty in France.

But on this occasion, the judges rejected the adviser's argument.

The court ruled that in order for products to be exempt from excise duty in the state of importation:

  • They must be transported personally by the private individual who bought them
  • They must be for the use of the private individual - not for other people, such as other members of a wine club

The EU directive in question states: "As regards products acquired by private individuals for their own use and transported by them... excise duty shall be charged in the member state in which they are acquired."

EUROPEAN COURT OF JUSTICE
Composed of senior judges from the 25 EU states
Rules on disputes over EU treaties and other EU law
Clarifies points of European law
Hears actions brought by individuals seeking damages from EU institutions
Based in Luxembourg
The Italian, Dutch, Polish, Portuguese, Swedish and UK governments had argued that "transported by them" should be strictly interpreted.

A UK government source said the ruling was a victory for common sense.

The judgement makes clear that someone shopping abroad cannot bring back more than the maximum levels set by the member state concerned - 90 litres of wine, 110 litres of beer, 10 litres of spirits and 3,200 cigarettes in the case of the UK - by arguing that part of it is for someone else.

The European Commission has proposed a change to the directive that would make this possible - except in the case of cigarettes - but it will only become law if all EU countries agree to it.


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