THE threat to duty free sales within the EU could result in fewer visitors to Ireland and lead to significant job losses in tourism, according to one senior industry figure.
The European Commission confirmed yesterday that duty and tax«MDBO» «MDNM»free sales for people travelling within the EU would be phased out as planned by June 1999.
Mr Brendan Leahy, chief executive of the Irish Tourism Industry Confederation (ITIC), said the removal would increase the cost of air and ferry tickets.
"Ireland's island position is unique in Europe as access transport costs underpin our tourist industry. If those costs go up it will certainly mean that visitor numbers will fall and jobs will he lost", he said.
Any increase in the cost of sea or air travel would be damaging for Irish tourism, as the huge growth in visitor numbers in recent years has been based on competitive access fares, Mr Leahy said.
However, one senior Irish travel industry source said last night a final decision on the future of duty free had yet to be taken.
"This is just sabre rattling by the Commission", he said. "It is by no means the death«MDBO» «MDNM»knell of EU duty free."
He said that EU members such as Ireland, France, and Spain, which have state owned airports and airlines, are likely to lobby against the end of duty free.
Duty«MDBO» «MDNM»free sales should have been abolished with the introduction of the EU single market in 1993. But EU governments agreed to grant a stay of execution until the end of June 1999.
The Commission decided yesterday to maintain this«MDBO» «MDNM»date«MDBO» «MDNM»following a report which identified major tailings in the operation of the system whereby vendors control the sale of duty free.
In most member states no system has been put in place to ensure compliance with duty«MDBO» «MDNM»free limits, which were being widely ignored, according to the report.
The loss of European duty free would hit airlines such as Aer Lingus and Ryanair, and ferry operators such as Irish Ferries and Stena Line.
European duty free is also a multi«MDBO» «MDNM»million pound business for producers such as Baileys and Irish Distillers.
Fianna Fail's foreign affairs spokesman, Mr Ray Burke, described the curtailment of EU duty free as bureaucratic madness". Mr Burke, whose constituency includes Dublin Airport, claimed that the end of duty free could result in an increase in air and sea fares of between 15 and 25 per cent.
The«MDBO» «MDNM»Independent MEP, Mr Pat Cox, said there was too much at stake in the EU duty free industry to leave its fate in the hands of "Brussels bureaucrats". The duty«MDBO» «MDNM»free system works, "so why fix it to make it tit a European theory?" he said.
Aer Rianta says the loss of duty free within the EU would cost it £20 million per year, and has stated that landing charges would be substantially increased to compensate for the loss of revenue.
