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The EU court rules that internet sales of wine and spirits should be allowed into Sweden

>> Thursday, July 05, 2007

It has taken the EU court five years to finally rule on an intriguing issue regarding internet sales from the EU into Sweden. The Swedish government has always claimed that it is illegal for individuals to buy wine and spirit from other EU countries through the internet (or any other distance sale, e.g. mail order). Sweden has obtained an exception from EU rules that has allowed it too keep the monopoly on wine and spirits retail sales, through the government owned chain of shops "Systembolaget" - claiming that it is vital for the public health and for the good of the youth to keep the monopoly. (No doubt, the Swedish monopoly supporters can see how in the rest of Europe vast swathes of the population are alcoholics and the youth is entirely decadent.) (Interestingly, though, in spite of the monopoly, the government shops have less than 50% market share. The Swedes have a larger supply from restaurants, from travelling abroad, and from illegal imports and home brewing). As a consequence of this monopoly, the government has claimed, Swedes should not be allowed to buy wine and spirit from other EU countries.

In spite of the government claiming that internet sales were illegal several internet sites have appeared specifically targeting the Swedish market (usually with exceptionally poor selections, but cheap). The merchants claimed that it was against the EU principles of free movement of goods (which it is, but, you know, Sweden had this monopoly derogation). Several cases where people have bought online and had their goods confiscated at the border have gone to court. Some cases have gone along government lines whereas other court decisions have gone against the government. Undeterred, the customs officers have more and more tightened the control and have recently confiscated all parcels they have found.

One court case has gone to the supreme court. However, instead of taking a decision, the supreme court asked the EU court for advice on how the EU regulations should be interpreted - a normal procedure when country regulations seem contradictory to EU rules, but a procedure that takes time. It is this ruling from the EU court that has now been pronounced.

The conclusion is that the EU court considers that it is an unreasonable restriction for Sweden to limit such imports and that it does not serve the stated purpose of protecting the youth. The EU conclusion is therefore that Swedes should be allowed to buy wines and spirits over the internet. This was actually an unexpected decision since preliminary notes from the EU have indicated the opposite and a ruling late last year that said said that a Dutch resident who had bought duty paid wine in France and had it shipped to Holland would have to pay Dutch duties on it, in spite of it already having been taxed in France.

In the mean time, several of the companies involved in the business have closed down and at leas one has gone bankrupt, as a consequence of the government's previous (erroneous) interpretation of the rules. More comments in the IHT.


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