Luxembourg/Brussels - Sweden is allowed to tax wine more heavily than beer since the higher excise duty on the imported alcoholic beverage does not, on its own, induce consumers to buy more Swedish beer, the European Court of Justice ruled Tuesday.

The European Commission had taken Sweden to court on the grounds that giving preferential tax treatment to beer violates EU market rules.

But in its "Commission of the European Communities v. Kingdom of Sweden" ruling, the court argued that "given the difference in selling price between a litre of wine and a litre of beer, the difference in excise duty is not liable to influence consumer behaviour."

Judges in Luxembourg noted that while "wine and beer are, to a certain extent, capable of meeting identical needs," the price difference between the two products remains virtually the same before and after taxation, with a litre of wine being roughly twice more expensive than a litre of beer.

"The court finds that the (European) Commission has not shown that ... the difference in the excise duty applicable to those products in Sweden is likely to influence consumer behaviour," judges said.

Sweden makes plenty of beer but has to import wine from abroad. Its excise duty on wine is about 20 per cent higher than that applied on beer. (dpa)