Sweden facing Commission rap over online alcohol ban

Date: 13/02/03

By Peter Chapman

THE European Commission has launched legal action against Sweden for banning purchases of wine and beer over the internet.

The country, which has one of the highest excise duty rates in the EU, was allowed to restrict the amount of alcoholic drinks that Swedes could import as part of the terms it negotiated on joining the Union in 1995.

However, the Commission believes that the restriction should not extend to internet purchases via websites such as Bordeauxdirect.co.uk or Chateauonline.com.

Frits Bolkestein, the internal market commissioner, said: "Private individuals should not be hindered from purchasing wine, strong beer or spirits for personal consumption directly from a producer or wholesaler based in another member state and have it sent to Sweden."

Competition Commissioner Mario Monti is also keeping close tabs on the Swedish state monopoly drinks outlets known as the 'Systembolaget' to ensure it does not abuse its powers. If the internet ban is not lifted, Bolkestein could eventually refer the case to the European Court of Justice.

The action against Sweden, which was launched at the end of October but not made public by the Commission, is just one part of Bolkestein's battle to cut distortions in the drinks market.

Last year he drew up plans aimed at narrowing the huge disparities in excise duties between high-tax countries such as Sweden and those such as France where duties are far lower.

The move was cancelled after low-tax member states objected to a hike in rates.

France objected to a proposal that would have meant introducing an excise duty on wine, which is currently zero-rated in the country.

The drinks industry itself is not applauding Bolkestein's efforts to free-up e-commerce because of fears the move will hurt producers while the excise duty distortions persist. Martin Rees, a partner with UK law firm DLA, advises The Brewers of Europe, which represents national brewers' associations in the EU15 as well as Norway and Switzerland.

He said: "The Commission's attempt to enforce single market rules will do more harm than good unless the underlying problem is tackled head on. The EC Treaty requires that the wide differences between national excise rates are reduced.

"Opening up the borders simply causes a massive distortion of trade and competition."

The European Commission has launched legal action against Sweden for banning purchases of wine and beer over the internet.