LONDON, United Kingdom (Reuters):

Shopkeepers and the Government appeared relieved Thursday after the European Union's top court ruled shoppers must pay domestic duties when having goods delivered from the continent.

Owners of small businesses had feared customers would buy cheap alcohol and cigarettes from abroad via the Internet if the ruling had gone the other way, hitting them hard.

"If the proposals had gone ahead, the livelihoods of many of our corner shopkeepers would have been seriously threatened," said Ken Patel, spokesman for Retailers Against Smuggling.

Inevitable

"It would have been inevitable that shoppers would have been tempted to buy tobacco from outside the U.K. because the high levels of tax here make it much cheaper for them to do it that way."

The U.K. has among the most expensive cigarettes in the world, with tax making up 80 per cent of the retail price.

However, Patel, who is a shopkeeper in Leicester, said the government needed to look at the high level of tax it imposes on tobacco, saying the current system was not working.

"The high level of tobacco tax in the UK is also the reason why shoppers are tempted to buy smuggled tobacco from sellers on Britain's street corners - because it is so much cheaper than buying from the shops," he said.

The Treasury collects around £16 billion a year in excise duty from cigarettes and alcohol and had risked losing billions.

"This clear win for the government is a victory for common sense," a Treasury source told Reuters.

Britons, who face some of the highest alcohol and tobacco duties in Europe, have long used cross-Channel ferries to stock up on cheaper drink and cigarettes.

The verdict means such "booze cruises" will continue, as under current rules Britons can take advantage of lower continental duties to bring goods back with them for personal use.

Health campaigners also welcomed the EU court decision, saying cheaper cigarettes would lead to more deaths, more disease and problems for the NHS.

Motivating Smokers To Quit

"The U.K. deserves to be proud of its high tobacco tax policy, because it is one of the most effective ways of motivating smokers to quit and deterring young people from taking up smoking," said Deborah Arnott, director of anti-tobacco campaign group ASH.

However Forest, the pro-smoking lobby organisation, said the decision was bizarre.

"There is no logic to this decision," said its director Simon Clark.

"As usual, the people hardest hit by today's decision are the low paid who can least afford the cost of alcohol and tobacco in the U.K., and the elderly and infirm who are less able to take advantage of cross-channel shopping."

'The U.K. deserves to be proud of its high tobacco tax policy, because it is one of the most effective ways of motivating smokers to quit and deterring young people from taking up smoking.'