Majestic Wines, the bulk wine retailer, has announced an increase of 43% in online sales but expressed concern about an upcoming EU ruling on tax duty on alcohol purchases via the web.

In its interim results for the 26 weeks ended 26 September, the company made a pre-tax profit of £6.5 million, a rise of 17%. Online sales were responsible for 6.4% of its UK retail sales.

The company has 133 stores, including outlets in the French ports of Calais, Cherbourg and Coquelles. Sales in those stores fell by 8.3%, a drop it attributed to higher ferry costs for day trips.

A decision by the European Court of Justice (ECJ), expected on November 23, could hit UK wine merchants hard. The court is considering whether alcohol and tobacco bought online in the UK from non-UK outlets should be subject to UK duty.

Majestic Wine’s CEO Tim How told The Times that he was concerned about the effects of the ruling on the UK’s wine and spirits retailers, claiming it would "create an unlevel playing field across Europe".

In the event of the ECJ backing an earlier decision that duty on goods bought in other European states can only be levied in the country of origin, UK wine merchants are expected to press for harmonisation of duty laws across Europe.

One thing is certain though - if this ruling is confirmed, online alcohol and tobacco sales will see a dramatic rise.

Further Reading:
Virgin Wines - Online Marketing Masterclasses

Graham Charlton

Published 13 November, 2006 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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