by Charles Metcalfe
Silence has fallen since last weekend s Sunday Telegraph s article suggesting a merrier Christmas than ever . The article predicted a European Court of Justice (ECJ) ruling on November 23 that would sweep away all import taxes on alcohol and cigarettes .
Others kept the story going, for a while. The ruling could also create huge problems for the UK Treasury, which relies on drink and tobacco taxation to the tune of £15 billion a year said www.decanter.com, the website of the leading UK consumer wine magazine. Tim How, Managing Director of warehouse chain Majestic Wine, was quoted by the Times as saying that the ECJ ruling could create a farcical situation for UK wine merchants , and would be grossly unfair .
Then everything went quiet. The truth, as ever, is rather more complicated than the black and white stories in the press. The original Sunday Telegraph story refers to an opinion - not a ruling - given by European Advocate General Jacobs on a case brought by the Dutch Government to claim import duty on French wines imported by a group of Dutch wine lovers. Was this news? Hardly. The opinion was given back in December 2005, and the ECJ has been puzzling away at it ever since. Any developments in advance of the 23 November ruling? No, the ECJ is famously tight-lipped over its rulings.
So why the fuss? Well, the ECJ usually heeds the advice of the Advocate General but, in a case where so much tax revenue is at stake, it s not surprising that submissions were made by Italy, Holland, Poland, Portugal and Sweden as well as the UK. And the ECJ has been known to go against the Advocate General s opinions, though not often. In this case, everything turns on whether duty should be levied in the EU country into which wine is imported - as opposed to the country in which the wine is originally sold - if the wine is transported by someone other than the customer buying the wine for his own personal use. So, could a UK citizen order 10 cases of wine from a Calais warehouse and get them shipped into the UK, paying only the French duty rate (less than 2p per bottle, as opposed to £1.29), or does he have to make the trip to Calais himself and bring them back personally to qualify for the lower rate?
Contrary to the suggestions at the beginning of the week, the UK trade is not expecting a huge change to duty rates for personal imports. Tim How, MD of Majestic, confessed he had been ambushed by the story . I didn t think there was anything coming out, he said today, and I don t think anything will happen this side of Christmas . According to Jonathan Butt, in charge of PR for Thresher, the UK s leading wine retail chain, This has come out of the blue. We haven t received any direction from any Government department. For us, it s business as usual.
This was confirmed today by a UK Treasury spokesman He said their official position is that we have to wait for the ECJ s ruling. He pointed out that, even if rules did change, it was extremely unlikely that all purchases of alcoholic drinks would be made via personal import, so the UK Government would not lose all the current tax revenue. And he confirmed that there was still flexibility for Gordon Brown, the UK Chancellor, to adjust tax rates to compensate for any lost revenue in his pre-Budget report, due at the end of November or beginning of December.
So, maybe this was just a stockpiled story to spice up a quiet week for the Sunday Telegraph, and nothing will change. But it s worth keeping an eye on ECJ rulings released on 23 November.
