Fifty-two years after the Irish invented the duty-free shop, the day of reckoning would appear to be at hand. But as travellers mourn the death of the concept - within the EU at any rate - they can take comfort from the fact that in some cases, the savings made by duty free retailers were not being passed on to them anyway.
A survey in today's Business This Week 2 also shows vast differences in the prices charged to travellers for different duty free goods, with air passengers significantly better off. For some items, ferry passengers are paying 40 per cent more than those with airline tickets.
For a basket of typical goods - including cigarettes, whiskey, vermouth, perfume, chocolates and a disposable camera - Aer Rianta came out cheapest, at £89.65. Irish Ferries was considerably more expensive at £96.35, while Stena Line was most expensive on £114.06. On the high street, including both duty and VAT, the same basket of goods cost £127.52.
On some items, there is virtually no difference between the duty free price and the high street price, forcing consumers to conclude that either the duty free shops are simply pocketing the tax, or the supermarkets are selling at or below cost. Toblerone chocolate, for example, proved less expensive in Tesco, at £4.74 for six bars, than at the duty free, with prices ranging from £5.50 to £6.14.
Intra-EU duty free shopping as we know it will end on June 30th. Between now and then Europe's heads of state and government may, or may not, agree to charge travellers VAT, but still not duty until 2002.
The duty free lobby says the compromise would cushion the blow, and postpone thousands of job lay-offs. Others say it would prolong a market distortion that benefits the wealthy, who travel more, and promotes smoking.
One way or another, a legal set-to is planned. Airlines and ferries will argue in court that once in international airspace or waters they are not bound to collect tax for any government. The European Commission will counter that no trip between two EU states can now be considered an international voyage.
