Facts
- The UK taxed wine and beer in different ways, resulting in the tax on wine being 5 times greater than the equivalent volume of beer
- The UK justified this tax with reference to the comparatively higher alcohol content of wine
Issue
- Did this difference in tax constitute a breach of the UK’s obligations under Art 110 TFEU on the prohibition of discriminatory internal taxation?
Decision
- Yes
Reasoning
- Just as in Commission v France (Tax on Spirits), wine and beer are products competing with one another (opinion: presumably when one is choosing their evening’s drink)
- As they are in competition with each other, a disproportionate tax on wine might discourage trade in wine, prejudicing the free movement of goods between Member States contrary to Art 110(2) which is applicable to ‘non-similar’ products
