THE EU Commission was yesterday urged to conduct a study of the implications of the abolition of duty-free shopping in 1999. The Minister for Transport, Mr Dukes, told a conference to mark the 50th anniversary of duty-free at Shannon Airport that the existence of certain vital transport links to Ireland was threatened.
Mr Dukes said he was under no illusion that it would be easy to change the Commission's mind. The original decision had been taken in 1991 by unanimous agreement of all EU Finance ministers. It will require a unanimous decision by the same body and a two-thirds majority in the European Parliament to reverse it.
Mr Dukes said he was concerned that the Commission had undertaken no study of the economic impact of abolishing duty-free within the EU. He added: "There is a growing body of support among EU member-states for a serious reconsideration of the impact of the proposed abolition.
The Minister for Finance, Mr Quinn, has commissioned a study on the likely impact in Ireland. That study should become available within about three months, Mr Dukes said.
Mr Frank O'Connell, group commercial manager of Aer Rianta, who is leading the lobbying to have the decision reversed, told the conference that duty- free shopping provided 140,000 jobs throughout the EU. Was it not incredible, he asked, that the EU authorities had decided that 70 per cent of the duty-free industry should cease trading at midnight on June 30th, 1999?
Mr O'Connell said the decision to end duty-free within the EU had been taken on a theoretical view of the internal market. It had been presumed that rapid integration and progress towards the Internal market would prove intra-EU duty and tax-free sales to be an aberration. However, the reality of the internal market was quite different. "There are still wildly divergent excise duty rates and no sign of any movement towards convergence ... The reality is that the internal market has not evolved in the way expected back in 1991 nor at the pace intended."
Mr O'Connell said that the Commission had so far refused to study the implications of abolition despite a request from the European Parliament.
One study had shown that airports would have to increase their charges by 60 per cent to compensate for the loss of duty- free. Other research showed that Greece would lose up to 500,000 tourists each year because charter airlines would have to increase fares.