KEY POINTS:
LONDON - The prospect of online "booze cruises" if Europe's top court rules that British shoppers can import alcohol from the Continent without paying UK duty has prompted Majestic Wine to call for "tax equalisation" across Europe.
Tim How, the wine retailer's chief executive, warned that the Exchequer risked being left with a £16 billion ($46 billion) hole in its coffers if the European Court of Justice backs duty-free shopping across borders.
"It would create a totally uneven playing field. We're talking about billions of pounds of tax losses for the Exchequer, which could have a serious impact on the economy."
UK shoppers pay £1.29 in duty on every bottle of wine, regardless of its price. This hits the cheapest wines the hardest.
An ECJ ruling, on November 23, is likely to allow shoppers to avoid paying that by ordering beer, wine and tobacco online from EU countries.
How said Majestic would be better placed than rivals to cope because it already has three outlets in France pitched at UK booze cruisers.
The French-based Wine and Beer World chain, which has suffered from the drop in day-trippers, could ship cases to UK shoppers, he added. "What the cost would be, I don't know."
Majestic has unveiled a 17 per cent increase in interim profits before tax to £6.5 million on sales up £7.6 million to £88.3 million.
The group announced plans to buy back up to £20 million of its shares over the next few months, lifting the stock 9.25p to 323.75p.
Demand for lighter wines, such as sauvignon blanc from New Zealand, and a new breed of less heavy Spanish riojas, helped to lift sales.
In the past five weeks like-for-like sales are up 4.3 per cent, roughly in line with the first half once the boost from a late Easter is excluded.
The group is to open nine new stores this financial year, lifting its total to 136 by March 2007.
Customers, which have to buy cases in batches of 12 but can mix up their order, spent £121 on average, up from £115. An emphasis on fine wines is helping to drive this increased spend and the average price per bottle.
- INDEPENDENT
