Duty calls

Date: 31/07/1997

AS millions of EU citizens pack their bags for the summer holidays, the spotlight is once again being turned on the vexed issue of duty-free sales.

Unless Union governments agree to another temporary stay of execution or even a permanent reprieve, tax-free sales for passengers travelling between EU countries will be abolished just under two years from now.

So far, member states have shown little sign of backing away from the decision they took five years ago to end the system from 1 July 1999, echoing Internal Market Commissioner Mario Monti's insistence that duty-free sales are an anachronism in the European single market and should therefore be scrapped.

Cynics suggest that the extra revenue which could flow into treasury coffers across the EU in the post duty free era may have influenced their thinking, although some have produced studies which indicate that the move would make little difference in practice.

Drinks giant Guinness is among those who argue that many people indulge in duty free buying sprees precisely because prices are lower and that they are unlikely to make equivalent purchases of duty-paid spirits at home.

Amid dire warnings from ferry companies, airlines and airports that the abolition of duty free could cost tens of thousands of jobs and significantly push up the cost of travel, the clamour is growing for EU finance ministers to order a study into the economic and social consequences of scrapping the system instead of dismissing calls for a change of heart out of hand. Both the European Commission and EU governments have, until now, firmly rebuffed such demands, fearing that to order such a study would wrongly imply that they were reconsidering the decision to end tax-free sales in 1999.

So far, despite the strenuous efforts made by campaigners fighting to save the system, there has been relatively little public outcry over abolition.

But that could begin to change as the deadline approaches and travellers realise that this much-loved perk is about to disappear forever.

Would it not therefore be wise for EU governments to think again and agree to investigate the impact of the move?

If, as Monti argues, the study merely confirmed that duty-free sales within the Union should be scrapped, it would provide both the Commission and member state governments with powerful ammunition with which to defend their decision to press ahead.

If, on the other hand, it revealed that abolition would have serious economic and social consequences which have not yet been fully considered, there would still be time to weigh up the arguments for and against the move once again or take steps to mitigate its impact.

It is hard to see what can be lost by agreeing to carry out such a study. Surely, in fact, there is everything to gain.