European Union Plans to Do Away With It, Duty or Not

LONDON —  Travelers caught in the bustle of Europe’s airports are bombarded with ads promoting duty-free sales, but this year many of the signs carry a warning--crossing out the crucial word “free.”

The European Union plans to eliminate all EU duty-free sales on June 30, 1999, and the $6.4-billion-a-year industry is lobbying hard to avoid extinction.

The idea of wiping out duty-free doesn’t sit well with many travelers, though some acknowledge it might make little difference because they can often get better deals when they get where they’re going.

“As far as duty-free is concerned, it seems a waste of time,” said Eric Stranex of Preston, England, who was taking the Emperor ferry to Calais, France.

He said his Belgian beer in less expensive in France, even paying the French duty, than it is in England or through duty-free.

His wife, Pauline, disagreed, saying she saves on perfume.

“It’s exciting when you get that little something duty-free,” Pauline Stranex said, sitting near the boat’s huge duty-free shop, where the liquor bottles clink with the motion of the sea.

The European Union plans to get rid of duty-free because, as it becomes a single market, goods can be transported freely across borders for personal consumption with--theoretically--no need for people to pay import and export duties.

“But it’s theory, not practice,” said ferry passenger Edward Orr, from Kent, England.

Some nations, such as Britain, impose taxes on liquor and tobacco that are many times higher than their neighbors.

As a result, many Britons ride the ferries so that they can stock up on cheaper alcohol and tobacco in France, with savings more than the price of passage. Duty-free is also cheaper than British prices, but there are limits on quantity. So it’s impossible to make the type of huge savings enjoyed by day-trippers who come back with a car so full of booze the axles could snap.

Still, those who favor the duty-free shopping argue that without it, airline and ferry tickets will cost more and some thinly traveled ferry routes will be wiped out without the subsidies from on-board duty-free sales.

“It’s kind of a no-win situation, but there are plenty of losers,” said Jacqui Crane, spokeswoman for the Duty-Free Confederation in London.

Across Europe, lobbyists are posting signs on ferries and hover crafts, hoping customers will pressure the politicians. Spaniards are urged to support “la continuidad del duty-free” while the English are told that “traveling would never be the same again.”

It remains unclear whether the last-gasp effort can succeed, 50 years after Europe’s duty-free industry was founded in a small airport kiosk in Shannon, Ireland.

The approval of all 15 EU finance ministers would be necessary. Thus far, the lobbyists say, they can count on just one-third: Germany, Spain, France, Greece and Italy.

Duty-free sales will continue for people flying between EU nations and other countries, such as the United States. One of the top European players, the British airport operating company BAA PLC, made a big U.S. acquisition in August to hedge its bets.

BAA paid $674 million for Duty Free International Inc., which operates about 175 duty-free stores in 14 international airports, including Kennedy and La Guardia in New York, O’Hare in Chicago and Logan in Boston.

But the little guy on the ferry has no such chances of beating the system.

French taxi driver Raymond Lebrun had purchased duty-free cigarettes for 120 francs ($20) that would have cost him 180 francs ($30) at home. Lebrun lamented the idea of bringing the savings to an end.

“It’s bad because it’s a good deal for everybody,” Lebrun said. “There’s lots of English on board, and it’s even better for them than for us.”