ECJ does not liberalise cross-border Internet sales of tobacco

The EU Court has ruled cross-border Internet shopping for tobacco is not legal.

More precisely, the European Court of Justice has said consumers who buy tobacco (and alcohol) in another member state must pay the tax rates in their home state unless they physically bring it home themselves. There is no possibility of appeal from this ruling.
This is important as the opposite ruling would have had a negative impact. Citigroup analysts Adam Spielman says: "We had expected the ruling to go the other way, as rulings usually follow the Advocate-General's opinion, and he had recommended liberalisation. Had the ruling allowed Internet purchases, smokers in Britain would have had every incentive to buy lower-margin cigarettes abroad, damaging industry profits."
The ruling means that any changes to EU tax system are likely to be more modest, Spielman adds. "The EU Commission is currently writing proposals to reform the tobacco tax system. However, any changes have to be agreed unanimously by the 25 finance ministers. Had Internet trading been allowed, it would have created more incentives for real compromises. Now there is less pressure to agree reform." (cg)

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