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EU Calls for Fairer Excise Duty 2006-11-22

Posted by clype in Articles of Interest, Europe, Money.
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Get to Dover early. Drive onto ferry. Arrive Calais. Drive off ferry. Grab some lunch. Fill boot of car with booze and fags. Drive back to ferry. Sail home.

A booze cruise is not everybody’s idea of the perfect European getaway, but this year millions of Britons will make a similar trip in order to take advantage of cheaper excise duties charged on tobacco and alcohol.

A ruling expected on 2006-11-23 at ‘The European Court of Justice‘ could change all that.
The Luxembourg-based court will determine whether a customer who buys beer, wine and cigarettes from one country — and arranges to have it delivered to their own door — can avoid paying excise duty in their home country.

If the court rules in favour of the idea, many people may think twice before crossing over to EU countries where duties are generally cheaper, choosing instead to place their orders over the phone or by the Internet.

And that could have a profound effect on places like Calais.

Barrow boys

The giant ‘EastEnders’ cash and carry warehouse, on one of the many trading estates dotted around Calais’s ferry port, is a regular fixture for British booze cruisers.

‘We like to keep the market barrow-boy image,’ says Romford-born Mr.David West, whose father of the same name set up the business in the 1980s.

Today, ‘EastEnders’ is a big player in the Calais market, selling bottles of wine costing anything from 0.50 GBP to 100 GBP, and competing with nearby retail giants ‘Carrefour’ and ‘Tesco’.

‘We get customers coming from all over the place. Mostly they’re British, but we get lorry drivers from across the Continent, from Germany and Spain,’ says Mr.West.

He says the firm is ready to adapt to whatever is The European Court of Justice’s’ ruling.

‘If we can send orders aboard we may have less people coming into the store, but we’d have more people using the Internet,’ he says.

‘People are buying their groceries on-line, they are buying everything on-line.’

Lost duties’

‘The European court of Justice’s’ deliberations follow a legal case in The Netherlands, where a wine club appealed against a ruling by Dutch authorities that demanded they pay higher Dutch duties on wine bought and delivered from France.

In many ways, the court’s ruling will touch on the heart of what ‘The European Union’ (EU) single market is.

A key EU directive says excise duty on goods is chargeable in the EU country of final destination, except for items ‘acquired by private individuals for their own use and transported by them’.

Several EU countries say the court’s interpretation of the directive should remain unchanged, meaning booze cruisers will still have to transport the goods they buy home themselves.

Britain alone expects to collect about 16 000 million GBP in duties on locally sold tobacco and alcohol this year.

However, ‘The EU Advocate General’ — who advises the court — has backed the view that individuals importing wine and cigarettes for their own use should only have to pay duties charged in the country of origin.

Making the current ‘booze cruise’ as simple as a phone call could cost some governments billions of pounds in lost duties, experts say.

French culture

But could a change in the law change the habits of booze cruisers in Calais?

‘We’d think about,’ says Ms.Georgina Pepperrell from Torquay.

‘We are on the Internet and we’re getting older as well, so we may not want to do the journey in the future.’

‘It would save the hassle of coming over here,’ adds Ms.Ashley Cook from Hertfordshire.

‘I wouldn’t have to take the day off work.’

Other visitors are adamant that they will keep making the journey by ferry or ‘The Channel Tunnel’.

‘We’re come here for lunch, the supermarkets and to enjoy French culture,’ says Mr.Barry Hudson, from Kent.

A spokesman for ‘P&O Ferries’, which carries about 14 million passengers/year from ports across England to France and Spain, shares his view.

‘People come to France to enjoy the experience. It’s not just cigarettes and alcohol, there’s a lot more to buy.’

However, P&O doesn’t plan to stand still if the EU rules do change.

‘We’ve got trucks, we’ve got warehouses,’ the spokesman says.

‘Perhaps it’s something we could get involved in and provide a door to door service for our customers.’

Speculation

‘The European Court of Justice’s’ decision will be closely watched by national trade bodies such as Britain’s Wine and Spirit Trade Association.

‘There is a lot of speculation about this case and some of it is overblown,’ says the group’s chief executive, Mr.Jeremy Beadles.

‘The Treasury can’t afford to lose this amount of money.’

The UK Treasury is confident that its interpretation of the law is the right one

EU court rulings are rarely ‘open and shut cases’, a Treasury spokesman says.

‘It is pointless to speculate on the outcome before the decision is taken,’ he adds.

‘It is important to remember that “The Advocate General’s” opinion is just that — an opinion, and the court does not always follow it.’

Experts say that even if the court rules in favour of a new interpretation of the law, it is unlikely that booze cruisers will switch to the Internet en masse .

And despite recent rises in French tobacco duties, tougher competition and what Mr.West says is a drop in tourist numbers, the view at ‘EastEnders’ remains firmly upbeat.

‘My old man says “whereas Amsterdam is the capital of sex, Calais is the capital of beer and wine”. We’re still optimistic about the future.’

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