Letter: Duty-free bonanza
Monday 28 December 1998
Duty-free retailing is fabulously profitable. The price charged is certainly not the normal retail price less the normal duty. Operating ferries, airlines or airports at those profit margins would be impossible. One can buy a litre of duty-paid brandy in a normal shop in Spain for about pounds 5. To buy a bottle of the same brandy in a duty-free store in England costs about pounds 15.
The only real test of whether jobs may be lost is not counting those people employed in the duty-free industry but to ask "will people drink less, smoke less, use less perfume, have a smaller wardrobe and so on if they cannot buy them at duty-free prices?" and I guess the answer is "no". And will travellers from abroad not wish to take home souvenirs from the country they visit, such as a bottle of scotch from the UK, if they have to pay normal shop prices? I guess they will. So on the production and distribution side there should be not much change.
The other money issue concerns the Government. Rates of duty in the UK are so high and generate such an income stream for the Treasury that they have no desire to reduce them in line with Europe. To do that would leave a gap in the revenue which would have to be filled with a compensating rise in other taxes.
We should be allowed to buy any products we want, wherever we want in Europe, at whatever price we are willing to pay, take them anywhere and do what we like with them, including selling them.
This duty-free situation is a true pantomime and, like all pantomimes, it should end after Christmas.
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