Council Presidency confirms the end of duty-free sales

In February 1998, the EU Presidency confirmed the Council of Minister's decision, initially taken in 1991, to abolish intra-EU duty free sales, despite massive opposition from groups worried about the impact of such a move on employment.

At the February 1998 plenary session of the European Parliament, the representative of the current UK Council Presidency, Douglas Henderson confirmed that the Council of Ministers and the European Commission had no plans to review the decision to end intra-EU duty-free sales (EU9711166N). This was despite claims made by representatives of the ferry and airport industry and trade unions in these sectors that the loss of up to 140,000 jobs may result from the decision. The decision to end duty-free from 1999 was taken over seven years ago by the Council of Ministers in 1991, as one of the taxation and excise measures to make the single market a reality.

MEP s called on the Presidency to give the Parliament a clear picture of the effects of abolition and wanted to know what remedial measures might be taken to lessen the blow of the job losses. It was argued that unemployment had not been such a high priority of the EU in the early 1990s when the decision to abolish duty-free was taken, and MEPs called for the decision to be reviewed in light of the current agenda.

A number of MEPs supported the Council's decision, arguing that it was irresponsible of the tobacco and alcohol industries to whip up consumer fears. They accused business of "using duty-free as a tax break", which was a total misuse of public spending. This argument mirrored those of Mario Monti, the member of the European Commission responsible for taxation and the single market, who argued that the ECU 2 billion subsidy effectively accorded to duty-free sales distorted competition.

Despite the seven-year period between the Council decision and abolition, little has been done by the industries affected, thus cooperative action is regarded as necessary in this area to minimise the impact on employment.