OPERATORS are digging into their own pockets to keep prices of goods down after the European Union banned the sale of duty-free items from midnight on June 30.
Many are absorbing the newly imposed VAT and duty and are taking advantage of the relaxed limits on the amount of goods that people can buy. They hope the increased volume they can sell will recoup their losses.
Since duty-free was abolished within the EU, travellers can now buy 90 litres of wine, 10 litres of spirits, 110 litres of beer and 800 cigarettes in a single trip.
At airports, BAA has come to an agreement with retailers to split the extra cost between them and continue to sell all goods, with the exception of cigarettes and some spirits, at duty-free prices.
P&O Stena Line has side-stepped a VAT law that says the rate of tax should be levied according to the country of departure by charging one rate to all customers and paying the difference itself.
Managing director Russ Peters said:”Customers can now fill their shopping baskets to the brim instead of being restricted to the more meagre limits of the duty-free system.”
Eurotunnel will not sell traditional duty-free goods at its UK terminal but will offer goods in Calais at French duty and VAT rates.
SeaFrance plans to absorb the VAT and duty for alcohol and perfume and will only sell cigarettes in France with French VAT and duty payable. P&O Portsmouth will open its shop only outside English waters and sell cigarettes with French duty but will pay the VAT. On all other goods, it will pay the duty and VAT.
n Duty-free airport round-up, page 30