Estonia case clears way for tough line over sugar hoarding
The ability of national and European Union (EU) authorities to take a tough line with confectionery companies stockpiling sugar and other products ahead of their country joining the EU has been strengthened by the European Court of Justice (ECJ).
Estonian ice cream maker Balbiino may now have face a heavy tax bill on alleged excess sugar, chocolate, butter and other stocks held ahead of Estonia’s EU accession in 2004.
Balbiino has challenged the methodology ” based on EU regulations ” for deciding which stocks were surplus. But in an advisory ruling, the ECJ has largely backed the Estonian government’s interpretation of the rules, which gave it significant latitude to decide what food was for normal business and what stockpiled. In this case, the ruling noted conclusions “Balbiino did not”¦hold large stocks of sugar in the ordinary course of its business”.
The case focuses on special rules managing expansions of the EU, a continuing process, with Croatia hoping to join by 2011 and Turkey, Serbia, Bosnia & Herzegovina, Albania and Macedonia holding membership talks.
These rules aim to prevent companies in incoming member states stockpiling food products to release them duty free across Europe once their home country joins the EU. As a result, any surplus stocks attract a special tax.
