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British Toast Open Commerce : Europe: Drastically lower liquor taxes in France are drawing hordes from across the channel. Ten thousand pubs could close.

November 20, 1994|DIRK BEVERIDGE | ASSOCIATED PRESS

CALAIS, France — The ferries sailing from England allow five people to travel with a car, but many passengers set their own limit at two to a car.

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Any extra bodies would take up valuable space that could be filled on the return trip by cheap beer, wine and liquor.

"Passengers are a liability," Bryan Brown said here as he and his brother Steve of Cambridge, England, stacked dozens of cases of Belgian beer into their station wagon. "That's the last thing we want is passengers. Next time, we'll bring the trailer."

Nearly two years after looser European Union rules allowed people to take all the goods they want across the borders of member nations, for personal consumption anyway, day trips to France have become a booze bonanza for Britons escaping higher taxes at home.

Tax on a pint of beer of 5% alcohol comes to the equivalent of about 6.4 cents in France, compared with 48 cents in Britain. Tax on wine is 50 times as high in Britain, at $1.62 a bottle, as in France, at 3.2 cents.

With the winter holidays approaching, thousands of Britons are heading for France to stock up, and Britain's wine and beer merchants say they're being slaughtered.

"A million pints a day are coming in," said Catherine Chenery, a spokeswoman for the Brewers and Licensed Retailers Assn. "If nothing is done, by the end of the decade, 10,000 pubs could close."

Although there is technically no limit to the purchases an individual can make, the British government has devised guidelines that come to 120 bottles of wine, several hundred cans of beer and a few dozen bottles of spirits and fortified wine. At that quantity, no questions will be asked.

So Britain's imbibers often come out of French grocery stores with several full shopping carts per person and hoping their axles won't break on the way home.

The ferries are full of passengers studying price lists from the wine and beer warehouses that have opened around Calais to cater to British shoppers.

Aboard the Pride of Bruges ferry, Ernest Lesbirel, from Wrexham, Wales, figured he would save about $160 buying wine for Christmas. He and his brother-in-law left their wives at home to keep plenty of room in the car.

Park a car with British plates on a Calais boulevard, and a brochure will appear on the windshield within minutes. It may be about the only advertising in France that doesn't contain a word of French.

The typical handout promises "bargains" and "ample parking" and assures "credit cars and English money accepted."

Britain's biggest supermarket chain, Sainsbury PLC, has even gotten in on the action. Since customers weren't going to buy their booze at home, Sainsbury opened a wine and liquor store in Calais.

A bottle of Sainsbury's claret wine that costs $4.64 in Britain goes for about half that in Calais. Even English ale, brewed in England and exported to France, is cheaper.

Sainsbury won't discuss sales at the store or compare its markups in the two countries, but a spokesman said business is "much better than we imagined."

Back in Britain, retailers say things are getting progressively worse.

When the European Union opened its borders in January, 1993, British beer companies predicted they would lose 6% of their retail sales to the French. Now they wish that was all they were losing. The total has grown to 15%, and beer dealers fear further losses.

Wine merchants are taking a similar hit.

About 17.6% of the total U.K. wine market is now coming into the country in private vehicles returning from continental Europe, according to the Wine and Spirit Assn. Each car now brings an average of 37.4 bottles of wine, up from 26.3 bottles a year ago.

The number of people making the journey keeps growing, a trend expected to continue as the Channel Tunnel offers even more opportunity for travel.

The solution, as far as the liquor dealers are concerned, is lower taxes. But so far they've gotten no relief.

Britain's Treasury has acknowledged that it is losing millions as the day-trippers take their toll, but the government is in a Catch-22. Lower taxes might slow the one-way flow of wine and beer, but they would also bring in less revenue from people who would have bought their alcohol at home anyway.

"They're on a hook, aren't they?" Lesbirel said. "They can't reduce the taxes because they'll have to put it on something else, and now, half the population of Britain is on a trip over to stock up."

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