The EU's internal market commissioner, Frits Bolkestein, has pledged to devise a new plan to tackle the disparity in EU alcohol taxation and the resultant price differentials following the rejection of his plans for a shake-up of EU excise duty rates.

Bolkestein had championed a plan to eradicate big differences in duty rates that fly in the face of the Single Market concept, encouraging cross-border shopping and smuggling. He was forced to shelve the plans which would have been rejected as politically unacceptable in low tax countries such France and Germany.

However, Bolkestein told the European Parliament's economic and monetary affairs committee: "There was an orientation debate - and opinions were varied, in particular because of the taxation on wine. I will study it again and, when I have, I will come up with a proposal."

The commissioner said he was bound to try to tackle the distortions, particularly the glaring disparities between neighbouring countries, such as Britain and France and Sweden and Denmark, where the cross-border problems are worst. "There are very clear distortions. Article 93 of the Treaty engages the Commission to do something about that and harmonise," he said.