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Loophole on French beer angers brewers: Ruling may let Britons order by phone

THE DRINKS trade and some ferry operators have reacted angrily to a European Commission directive which could allow Britons to place telephone orders for cheap French beer rather than collect it themselves.

Last year, 333 million pints of beer were imported by United Kingdom citizens for their own use, losing domestic brewers pounds 480m of sales. French beer is attractive because of differences in excise duties: in France the tax works out at 4p per pint, compared with 29.7p per pint in Britain.

P&O believes that buying French beer over the phone would make a significant dent in the number of people using its ferries for day trips - about 1 million last year. Duty- free sales, which were worth pounds 160m to UK ferries in 1992, would also suffer.

At the centre of the row is the exact interpretation of article 8 of directive 92/12, implemented last year, which allows individuals to import quantities of liquor from countries within the European Union for personal consumption. The British Government has imposed an 'indicative limit' of 110 litres of beer per person per trip.

Because of differences in excise duties across Europe, it has become an attractive option for British beer drinkers to buy in France where the tax works out at 4p per pint, compared with 29.7p per pint in Britain.

The problem arises because of the wording of the directive which refers to 'products acquired by private individuals for their own use and transported by them'.

The commission argues this covers instances in which a middle- man is employed and transport costs are pre-paid. This would allow Britons to place orders to French hypermarkets over the phone and pay for a courier to make the delivery. Britain, France, Italy and Germany strongly dispute this interpretation.

The Brewers and Licensed Retailers Association said the commission's interpretion of the directive would be 'devastating' for the British drinks trade. The commission is expected to present a modification of the directive in May or June.

The Brewers and Licensed Retailers Association is calling for excise duty to be cut by two thirds as a solution to the problem.

'This is in line with the sort of cut made by the Danish government to tackle their problem of personal beer imports from Germany,' a spokeswoman said.

Ferry companies are split about how badly their business would be affected. P&O said it was firmly backing the British Government's interpretation of the directive. Stena Sealink said any business it lost through telephone orders would be offset by the increased use of its ferries by couriers.