Court ruling on Tobacco and Alcohol sales in Europe

Court rules Europe's 'booze cruises' may continue

LUXEMBOURG: European "booze cruises" were saved Thursday by a ruling of the European Union's highest court, but consumers in high-duty countries like Britain and Sweden had their hopes of buying less-expensive alcohol on the Internet dashed.

The judgment came as a relief in nine EU countries with high excise duties, which had feared a potential loss of revenue from the test case brought by a Dutch wine lover.

The lead plaintiff, B.F. Joustra, challenged a Dutch decision to charge him duties on a consignment of wine he ordered a transport company to ship from France to the Netherlands.

In court documents, he explained that he and some 70 other food and wine enthusiasts decided to import the wine themselves after they fell in love with it on a trip to vineyards in France. The group had no car and no space to take it home with them.

But a customs charge of €906, or $1,173, on wine bottles led him to initiate a case that climbed through the Dutch courts until they sought advice on what to do from the EU's ultimate legal authority, the European Court of Justice.

The high court ruled that Europeans could import wine for themselves or anyone else, as long as they transported it back personally.

The judges said, however, that their interpretation of the EU's excise tax rules meant that if people imported alcohol and tobacco through transport companies, a national excise duty would be charged, but that the duty in the country where the shipment originated should be subtracted from the cost.

The ruling - which upholds a 1992 EU law that duty is charged in the EU state where goods are bought for personal use - means Britons, Danes, Swedes and Finns can continue sailing or driving to neighboring countries with less-expensive alcohol to benefit from the lower duty on personal imports.

Alcohol is taxed at different rates across Europe, giving incentives to consumers in these high-tax countries to travel abroad to buy wine and beer.

The court's stance is a blow for Internet companies and other cross-border importers, which had hoped to start selling cut-price alcohol and cigarettes across the EU.

Britain, whose government hoped to collect £16 billion, or $30.7 billion, in taxes from local tobacco and alcohol sales this financial year, welcomed the ruling.

But the European Commission, which regulates EU cross-border tax affairs, said the court "gave a rather restrictive interpretation" of when duties on transported alcohol or cigarettes might be imposed, a commission spokeswoman, Maria Assimakopoulou, said.

She said the commission had already drafted a proposal to allow consumers more flexibility to transport less-expensive beer or wine home, but countries including Britain and Sweden had been holding up the plan since 2004.

The court 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.