ECJ ruling on Internet sales – public health disaster averted.



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Thursday 23 November 2006

ASH news release:  For immediate release: 23rd November 2006
Health campaigners breathed a collective sigh of relief today after the European Court of Justice ruled that anyone buying cigarettes over the Internet would still be required to pay tax at the rate set by the country of final destination. [1] So, for example, Britons wishing to take advantage of cheap cigarettes available in Spain or Greece must still pay the full rate of UK tobacco duty on the products imported into the UK.  Smokers will still be able to buy the cheaper cigarettes for personal consumption if they visit these countries in person.

The legal dispute centred on a case originally brought by a group of Dutch wine enthusiasts who argued that they should only have to pay local duties on wine imported for personal consumption if ordered over the Internet.  An initial opinion issued by Advocate General Francis Jacob in December 2005, argued in their favour.   If the case had been allowed by the ECJ it could have opened the floodgates to cheap alcohol and tobacco products being purchased over the Internet. This would have reduced Government revenue and would have led to an increase in tobacco and alcohol consumption, resulting in more disease and premature death and a further burden on the already over-stretched NHS. [2]

Deborah Arnott, Director of the health campaigning charity ASH, said:

“Thankfully the ECJ has taken into account the broader health and economic implications of this case. If the Dutch case had been considered lawful it would have been disastrous for the health of Britons and other Europeans living in countries where tobacco taxes are high.

“The UK deserves to be proud of its  high tobacco tax policy because it is one of the most effective ways of motivating smokers to quit and deterring young people from taking up smoking.

The policy also has public support, with a majority of people favouring above inflation price increases in tobacco tax. [3]

“This case demonstrates the problems caused by having such diverse tax regimes across the 25 EU member states.  ASH supports moves to harmonise tax but not at the expense of public health.  We have urged the Treasury to push for comprehensive reform of the EU law on tobacco tax to minimise the differences in tax rates across EU member states. In addition, we believe that a purchase limit of 200 cigarettes per person should be imposed on all travellers between EU countries.” [4]

ENDS

Notes and links:

[1]  The ECJ press release summarising the ruling can be accessed as a pdf at:curia.europa.eu/en/actu/communiques/cp06/aff/cp060093en.pdf

[2] There is a very clear relationship between the price of tobacco and consumption.  According to the World Bank, in industrialised nations for every 10% rise in price, consumption falls by approximately 4%.  In the UK, taxes account for 80% of the retail price, making UK cigarettes among the most expensive in the world. High prices result in more smokers deciding to quit and help deter young people from starting to smoke.  In recent years, France and Germany have significantly increased tobacco duties on tobacco products.

[3] The national smoking-related behaviour and attitudes survey for 2005 found that 34% of respondents supported a tax rise “a lot more than inflation” and a further 17% favoured an increase “just above inflation”.  Source:  Office for National Statistics, July 2006.  www.statistics.gov.uk/statbase/Product.asp?vlnk=1638

[4]  See a pdf of the ASH Budget submission at: www.ash.org.uk/files/documents/ASH_215.pdf

 

Contact:  Amanda Sandford 020 7739 5902   ISDN available

 

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