THEABOLITION of duty-free caused cross-Channel ferry carryings to fall by 6.7% last year, according to figures published by the Passenger Shipping Association.
Nearly 26.8m passengers travelled to the Continent by ferry in 1999, compared with 28.7m the year before.
Channel Tunnel traffic was also affected by the loss of duty-free last July. The PSA estimates that Eurotunnel and Eurostar passenger numbers were 18.9m in 1999, against 19.4m in the previous year.
PSA director Bill Gibbons said: “The loss of duty-free is the main reason for ferry traffic dropping in the last six months of the year.
“A lot of people travelled to mainland Europe to stock up on duty-free before it was abolished. Also, abolition had a effect on Christmas shopping patterns because people used to do round trips to buy duty-free goods just before Christmas.”
Gibbons claimed ferry companies’ yields had improved in 1999 because they had raised fares in anticipation of the loss of duty-free. However, he admitted they were only making a small proportion of the profit they used to by selling goods on board.
This is because they now have to sell goods at French, Spanish or Belgian rates of tax, which means margins are lower. Despite last year’s slump in the cross-Channel market, Gibbons is confident there will be a recovery in 2000.
“The pound is very high against the currencies of all the closest European countries, which makes mainland Europe a very attractive destination,” he claimed.
“Also, although ferry prices have gone up, they are still cheaper in real terms than they were in 1993 before the Channel Tunnel opened.”
Gibbons added that ferry operators had now introduced much more flexible pricing policies, and are focusing on selling their destinations to potential customers.
“They are looking to achieve market growth, rather than getting people on board to sell them duty-free goods,” he said.