The duty-free argument is warming up again. Good. The idea of duty-free drink focuses our mind on the principles of the free market something wonderfully. Admittedly, in the drinks trade particularly, there is no such thing as the free market. For if you believe in the free market, you are ideologically opposed to interventions by the Government to limit or even reverse price rises in the private sector. So would run the argument of publicans who wish to raise the prices of stout in their pubs: none of the Government's business, they would declare, stoutly of course. And it wouldn't be, if there were a free market in the first place.
There isn't. Governments control the number of outlets for alcohol by a licensing system which has become distorted as all regulated markets inevitably become, not least by political pressure from those with vested interests. For example, vested interests campaigned successfully against Tallaght town centre getting a single pub. Tallaght, with a population greater than Limerick's, has fewer pubs than many Irish villages. So lucky Tallaght endures a series of regional pub monopolies. Provided individual publicans do not shove up their prices too much, they can charge higher pro-rata prices than pubs in areas of genuine competition, such as in the centre of Dublin, simply because people cannot be bothered to travel the extra mile or so to save five pence, or whatever.
Government regulation
The argument in favour of government regulation of prices in pubs depends on the initial government intervention in the first place. If that intervention - the creation of licences and the granting of planning permissions - were disinterested, then maybe the argument against government intervention in the setting of prices would be vitiated. But it is not disinterested, as we have seen in Tallaght, and as we saw in that contemptible and squalid little farce, the restaurant licensing bill of a few years ago. That was framed, not in the interests of the consumer, but in the interests of publicans, who on the one hand knew that full licensing of restaurants was inevitable, but on the other were determined to make it as expensive as possible.
The result was a putrid piece of legislation which is so rotten it is almost never enforced, but its effect was the desired one: the minimising of the number of restaurants acquiring ludicrously expensive full licences - even as pubs began to sell full meals without conditions which restaurants have to observe (separate waiting space equal to 40 per cent of the restaurant area, one urinal for every eight place settings, head waiter to be a transsexual Martian called Nigel, etc).
That's a long diversion, but it's useful to remember. Alcohol brings out the statist in most political cultures. And maybe that's right. Nobody wants a shebeen on every street corner. But the omnipresence of government in the retail drinks trade has given the duty-free business a cachet possessed by few other businesses. And instead of levelling our hostility at government regulations and the punitive raids on the alcohol industry, now we find that our anger is being directed by the duty-free industry, and all who sail on her, on the European Commission because it is trying to do away with duty-free.
This is preposterous. Duty-free outlets merely give us a holiday from confiscations by governments which were meant to end in a single Europe. We were assured we would have standard rates of duty across Europe by now; but the taxation culture of Europe, and Europe's appalling traditions of demarcation, restrictive practice and compulsive statism, have made standardisation unattainable.
European argument
The real argument should not be whether or not to abolish duty-free selling, any more than the real argument for political prisoners is whether or not their thumbscrews should be loosened for Christmas. The argument should be about the implementation of what we all thought was the core of the European argument: a single market, with a single set of economic rules at work for all within that market place.
Of course, recidivist statism within the member countries has deferred that genuine single market into an invisible future, and meanwhile the duty-free industry justifies its existence with absurd arguments about Arctic communities in Scandinavia depending on it for their well-being in winter. Oh please.
Arguments for the retention of duty-frees is like talking about loose thumbscrews from Santa. And they're not even that loose. For what is truly appalling about duty-frees is that they are quintessential monopolies, supported by all the moral guff monopolies always employ to defend their monopolism, just as we heard similar rubbish to justify the cartels which almost paralysed the European airline industry.
Retail activity
The truth is that much - if not most - of the retail activity in an airport is unrelated to duty-free sales. A huge amount of the sales there - books, food, newspapers, clothes - either do not benefit in the least from duty-free, because duty does not apply, or because price is not an issue in a local monopoly. Take Dublin airport (which admittedly is not as bad as Paris. If Saddam Hussein cuts up rough again, I pray he Scuds Charles de Gaulle). Why has one company, Wrights of Howth, been granted a complete monopoly on retail outlets in the airport? Is it surprising that smoked salmon prices are higher than they are in Dublin supermarkets? What argument is there to justify the single-supplier outlet? Is it not illegal within European law?
Now, if duty-free areas at airports were monopoly-free areas, and if competition throve and the public benefited, there might be a argument in favour of retaining duty-frees. But they are not. They are state-protected local monopolies in which most of the duty saved is not enjoyed by the consumer, but by the retailer. Feel your forehead the next time you leave a duty-free. Go on, feel it. The chances are you'll find you're missing some hair. You've been scalped.