Euro ruling could mean buying duty-free online

BRITAIN'S online shoppers could soon be enjoying an unprecedented era of cheap cigarettes and alcohol direct to their door from other European countries following a groundbreaking legal test case, it emerged last night.

In just over ten days' time, the European Court of Justice will rule on whether shoppers can buy items in other European Union states and have them delivered to their homes while only paying duty in the country of origin.

That could pave the way for a boom in bargain hunting as online and catalogue shoppers in the UK seek to dodge the country's high tariffs on cigarettes and alcohol.

The European Court's decision, due on 23 November, stems from the attempt by the owner of a Dutch wine club to buy wine in France and have it sent to Holland without physically escorting the bottles.

When the Dutch government imposed duty on the wine, the importer appealed against the decision and the advocate-general of the European Court ruled that officials in Amsterdam had been wrong to try and tax it.

The European Court of Justice has a track record of upholding its advocates' decisions, and speculation is mounting that Britain and a number of European countries which back the Dutch government may lose the case.

That defeat would have significant implications for the 15 billion a year the UK's Treasury collects from excise duties on cigarettes and alcohol. It would also undermine the "booze cruise" industry of ferry companies who rely on Britons who can bring cheap alcohol and tobacco back into the UK from the Continent as long as they can argue it is for personal use.

The Treasury last night said it was "far from a foregone conclusion" that the European Court of Justice would uphold the Dutch case ruling.

An official said: "If you take a long historical look at the European Court of Justice, usually it does follow his [the advocate-general's] opinion. But if you look more recently at what they've done, actually it is a lot less clear-cut."

The UK's excise duty on a 75cl bottle of wine is 1.29, while France imposes a duty of less than 2p and Austria, Germany, Italy and Spain impose none. Britain is the EU's second-highest taxer on spirits and in the case of beer imposes a duty of 37p per pint while 19 other EU countries have rates under 10p.

A spokesman for the British Retail Consortium downplayed the threat to the country's traders from the possible ruling.

"We don't think it will significantly alter the behaviour of people who buy, say, a well known bottle of French wine once a week. It may appeal to people who want to buy cheaper items in volume from Eastern Europe."