THE abolition by the EU of duty free facilities would almost certainly force the closure of Irish direct ferry routes to the continent and put in jeopardy the Cork Swansea route, a report commissioned by the European ferry industry has predicted.
The report, which argues that duty free sales represent an essential 30 per cent of revenue to Irish ferry companies, also predicts the loss of 1,800 jobs in or associated with the industry and a further 2,200 in local tourism and average increases of 10 per cent in prices on remaining sea routes.
The study was commissioned from independent consultants MDS Transmodal as part of a campaign by the dutyfree industry against the EU's decision in 1991 to end the facility by the beginning of July 1999. In order to reverse the decision a unanimous vote of the Council of Ministers will be required, a prospect viewed by many diplomats as deeply unlikely.
The Irish approach has been to support attempts to get the Commission to conduct its own study of the economic and social effects of the move and a proposal from the Finns, seriously affected but not even EU members when the original decision was taken, is due to be debated at the next meeting of the Transport Council in 10 days.
The chairman of the International Duty Free Confederation, Mr Frank O'Connell of Aer Rianta, told a Brussels press conference yesterday that the flawed rationale for doing away with duty free was that this was necessary to complete the single market.
Yet, he said, the single market was not the same as the national market and the reality was that it had not yet evolved as planned - excise and VAT rates still vary widely within the Union, he said.
It was "incredible" that the Commission would advocate abolishing a £4.5 billion business without studying the implications, Mr O'Connell said.
The report for the European Community Shipowners Association warns of the potential loss of 50,000 jobs directly and indirectly throughout the union and the further marginalisation of peripheral communities. On some Scandinavian routes, it says, prices are likely to rise by as much as 100 per cent.
The ending of intra EU duty free sales throughout the union, if not replaced by other sales, would cost airports, ferries and airlines £3 billion, some two thirds of their duty free revenue. Ferries take half of that business.
In Ireland duty free sales totalled £92 million in 1995, of which 79 per cent was intra EU business. The 10 ferry routes to Ireland (including Scotland to Northern Ireland) carried 7.8 million passengers, 4.9 million of whom had access to duty free facilities.
The report says that although only between 2 and 5 per cent of travellers on Irish routes would not travel if duty free was abolished, the loss of revenue would force operators to push up prices on average by 10 per cent. The additional annual traffic making long journeys through Britain would add 49,000 cars, 580 coaches and 51,000 freight ,units to its roads.
