EU alcohol ruling cheers traders
Retailers have expressed relief at a European Court ruling against allowing consumers to buy drinks and cigarettes online at lower duties from abroad.
The decision means shoppers buying cheaper goods abroad will still have to accompany the goods back themselves. Shopkeepers said a different ruling allowing an internet bargain hunt would have hit them hard, while the Treasury said it was a victory for common sense. The UK loses duty of more than £1 billion per year because of "booze cruises". And it would have lost a lot more if the ruling had gone the other way and more shoppers had turned to buying low-duty goods online. "This clear win for the government is a victory for commonsense," said a Treasury source.
The decision will disappoint shoppers hoping to stock up on alcohol and cigarettes for Christmas but it has cheered retailers. Ken Patel, national spokesman for Retailers Against Smuggling, and a Leicester retailer, said it was a critical decision for corner shops. "Tobacco accounts for a huge proportion of the sales of many corner shopkeepers and to have lost these valuable sales plus the add-on purchases a shopper often makes at the same time - like a daily paper or a pint of milk - would have been unsustainable for many retailers," he said.
The European Court of Justice (ECJ) judges ruled that "only products acquired and transported personally by private individuals are exempt from excise duty in the member state of importation". The case was brought by a Dutch wine club who objected to being charged duty on a lorry-load of wine delivered from France.
The Dutch Supreme Court had asked the European Court to interpret its own directive, which said: "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." The UK had stood to lose more than most countries by a change in the law, whereas a country like France would have benefited from the extra business. But this may be a short term reprieve for the UK Treasury because planned draft legislation could reverse this decision in the future. Deborah Arnott, director of the tobacco campaigning charity ASH, said it would have been "disastrous" for the health of Britons.
A P&O Ferries spokeswoman said the company had been ready to adapt its business to a change in the law, but would now carry on as normal. The ruling means the tradition of the "booze cruise" to Europe is no longer under threat. Colin Poole, who made the trip from Northamptonshire to shop in Calais, told BBC News he thought the ruling was sensible, given the large amounts of alcohol consumed in the UK. "Responsible people come over three times a year. We top up and can make enough savings to pay for the trip and pay for a meal. For us it's a good day out." But Conservative MEP Richard Ashworth, who campaigns for the rights of cross-channel shoppers, said the EU should go further and relax the limits on how much they can bring back to the UK tax-free. Duty on a bottle of wine varies from nothing in 13 EU countries, to €2.1 per 75cl in Ireland. (BBC News)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.