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Drinks industry split over online booze cruising

By Chris Mercer , 14-Nov-2006

Effects will be mixed for the industry if an EU court allows consumers to use internet shopping to by-pass import tax on alcoholic drinks from other member states, a trade association has said.

The European Court of Justice is set to rule early next month on whether alcoholic drinks should in some circumstances only be subject to duty tax in their country of origin.

The move, already supported by a Court Advocate General, would allow consumers in EU countries with relatively high duty rates, such as the UK, to buy products from abroad more cheaply via the internet or mail order.

 

There were mixed feelings on the case throughout the UK drinks industry, according to Jeremy Beadles, chief executive of the Wine and Spirit Trade Association (WSTA).

 

"If you've already got operations in France, you might be able to start using these relatively quickly. Retailers will also look for market opportunities," Beadles told BeverageDaily.com.

 

Many Britons currently make 'booze cruise' runs across the Channel to northern France in order to pick up cheaper alcohol, showing the potential of a doorstep delivery service that could offer products at competitive prices.

 

Beadles advised caution until the industry knew exactly how any new rules would work, however.

 

"Think about the threats, think about the opportunities, but don't do anything until we know what the [Court] decision says. There's going to be a lot more detail coming out and there will likely be provisos on how people are actually allowed to do this."

 

Any relaxation of the duty tax rules would threaten UK government revenue from imports, and Beadles warned that authorities would inevitably look to curb losses.

 

The UK government, alongside other states with higher duty rates, has already opposed the move.

 

Harmonisation of duty tax rates across the 25 EU member states is the preferred option of both the UK government and the WSTA, but member state ministers last week again failed to agree on this.

 

The European Commission has proposed a new EU-wide, minimum duty tax rate on alcoholic drinks, which it says would prevent market distortion and also clamp down on fraud in member states with higher tax rates. Current minimum rates were set in 1993.