Enlarge imageBy Michele Sinner
LUXEMBOURG (Reuters) - Europe’s "booze cruises" were saved by a ruling of the EU’s highest court on Thursday but consumers in high-duty countries such as Britain and Sweden had their hopes of buying cheap alcohol on the Internet dashed.
The judgement came as a relief to finance ministries in nine EU countries with high excise duties, which had feared a potential loss of revenue from the key test case brought by a club of Dutch wine lovers.
The European Court of Justice (ECJ) upheld a 1992 EU law that duty is charged in the EU state where goods are bought for personal use -- but only if transported by the purchaser.
That effectively rules out cheap online sales. If someone orders alcohol in another EU state and has it delivered at home, then domestic customs duty must be paid, the court said.
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"The court points out that, in order for products to be exempt from excise duty in the state of importation, the (EU) directive requires that those products be intended for the personal use of the private individual who has acquired them and that it therefore excludes products acquired by a private individual for the use of other private individuals," it said.
"Furthermore, the products in question must be transported personally by the private individual who purchased them."
That means Britons, Danes, Swedes and Finns will continue to sail or drive to neighbouring countries with cheaper alcohol to benefit from the lower duty on personal imports.
The court said that if a group was importing the wine, the home country duty should be paid, minus the duty paid in the country where the wine was bought.
MIXED COCKTAIL?
The ECJ case was brought by a Dutch wine enthusiast who set up a group to buy duty-paid French wine for delivery to members in the Netherlands for their own use.
The Netherlands slapped on excise duty, even though French taxes were already paid, as third-party transport was involved. So the wine circle appealed against the Dutch tax.
Hordes of British travellers hop on to ferries to France each year to stock up on beer and wine with lower duty, saving themselves millions of euros. Swedes and Finns do the same on Baltic cruise ships and many Danes drive to Germany to stock up.
Britain hopes to collect 16 billion pounds in tax from local tobacco and alcohol sales this financial year.
"This ruling is a mixed cocktail," said Richard Ashworth, a conservative EU lawmaker from Britain.
"It’s great news for (Chancellor) Gordon Brown and many small retailers who stood to lose out on revenue, but it is a disappointment for many consumers," he said in a statement.
The ECJ decision went partially against the opinion of the court’s adviser, who had suggested individuals be allowed to buy alcohol in another country, have it delivered to their home and pay the duty only of the country where the alcohol was bought.
