EU leaders close book on duty free sales

Airports furious at Danish veto of extension; NGOs claim victory for the environment

EU leaders meeting in Cologne today have finally decided to stop duty-free sales for travellers within the European Union, despite pleas from many member states to delay the move. Although a decision in principle to stop duty-free within the single market was taken by member states nine years ago, a number of governments were trying to get a two-and-a-half year reprieve for the practice amid fears that it would cause job losses, especially in airports.

The decision has been greeted as a victory by European environmental groups, which have been calling for air transport prices to be increased to reflect their environmental costs and see the profitable duty-free business as an indirect government subsidy. "We are pleased that rational thinking has triumphed over populist policies," said Frazer Goodwin of the Brussels-based group T&E.

But European airports, represented by ACI Europe were hugely disappointed that the business, which it claims is worth US$5.3bn (euros 5.1bn) will now have to be wound down. It claims that between 60,000 and 140,000 jobs are at risk as a result. However, The Right Price for Air Travel campaign, co-ordinated by Friends of the Earth the Netherlands, disputes the industry's claims on job losses, saying sales of alcohol and perfume will continue even once duty has to be paid.

ACI Europe said today that the decision to end intra-EU duty free sales was only made because Denmark stood alone among the 15 member states against an extension. One country had vetoed an extended phase-out, ACI Europe said, representing "the worst traditions of quasi-democratic decision-making".

In the run-up to the summit meeting, environmental groups targeted Denmark, as a "green"-minded country known to be in favour of abolishing duty free. They wrote to the Danish prime minister Pour Nyrup Rasmussen, asking him to stand firm against his counterparts looking to delay its abolition.

Philippe Hamon, director general of ACI Europe, said he still hoped that the decision could be reversed. "We urge [the other EU member states] to persuade Denmark to review its isolationist policy. There is still time and it is still possible to honour the will of Europe's citizens."

However, the battle looks over and, environmental groups are now likely to shift their attention to related campaigns to end the international tax-free status of aviation fuel and to introduce other measures to incorporate "external" environmental costs into the price of air transport.

Follow Up:
German EU presidency; T&E, tel: +32 2 520 9909; ACI Europe, tel: +32 2 552 0982.

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