COMMENT Now and Then...
Fight until the bitter end T
he battle lines to preserve intra- EU duty free
were well drawn one year before the fated
abolition occured at midnight on 30 June 1999. Twenty years ago this issue (June 1998) the lobby was in full force, having taken the fight to Brussels the month prior. TRBusiness’ cover headline, ‘No surrender
on intra EU duty free’, attacked a ‘barrage’ of negative media coverage from the 19 May meeting of the European Council of Finance Ministers (ECOFIN) surrounding the Irish Ministry’s call for the European Commission to come up with an economic impact study into the effects of intra-EU duty free abolition. The negative coverage emerged despite
the request being backed by the UK, Germany, France, Italy, Spain and Belgium – representing 85% of the EU population. The request was opposed by Denmark, the Netherlands, Luxembourg, Sweden, Austria, Finland and Portugal, with Greece ‘semi-suppotive’. At the time, the European Union
Tax Commissioner Mario Monti was resolute that the 1 July 1999 end date was untouchable and dismissed the Irish request. However, the pro-trade lobby were offered some inviting inroads in conducting their own studies into the effects of the abolition to submit to the Commission. Fast-forward to December that year
and then UK Prime Minister Tony Blair was battling to preserve duty free sales at the European Summit in Vienna. A key argument, as reported by UK nationals including the Independent and BBC, was the loss of thousands of jobs linked to the lucrative cross-channel EU sea and air trade. Scheduled talks offered the opportunity
for a reprieve, with the PM’s argument that the move to abolish duty free could not be taken in circumstances where the successor regime would create enormous problems. Germany and a clutch of other member
states stood behind Britain in re-opening the duty free debate. Ultimately, those events were in vain as the industry mourned the eventual demise of intra-EU duty free sales the following year. Nostalgic press
74 TRBUSINESS
coverage from the time underlines the unbelievable fight the industry took to the legislators back then – and that same crucial fighting spirit continues to play out today on a range of other issues, but none more so than the current potential for a restoration of post-Brexit duty free sales. The Council of Ministers decided
unanimously to abolish duty free sales for travellers within the EU in 1991, as part of taxation and excise measures to establish the Single Market, the Council deeming that duty free sales were an ‘anomaly’ within a Single Market. A seven-and-a half year transitional period (up to 30 June 1999) was granted to allow duty free retailers and suppliers to explore alternative routes of business. «
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JUNE 2018
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