EU amends Excise Duty Directive

Bill Lumley

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ETRC says U-Turn will save retailers “millions of pounds”

The European Commission has amended its proposal on excise duty to allow airports to continue selling duty-free to passengers transferring to another airport outside the EU.

The move follows lobbying by the European Travel Retail Council (ETRC), which only identified the anomaly when scrutinising the directive several weeks after it was first published in February this year.

Under existing rules in most EU countries, a passenger taking an intra-EU flight and then transferring to a third country is free to buy duty-free goods at either EU airport. A passenger on a flight from Dublin to London Heathrow, for example, who then travels to Dubai, can buy duty-free items in Dublin, as their final destination is outside the EU.

The arrangement was threatened under the Commission’s proposal, which planned to restrict passengers to buying only duty-free at their last stop before leaving the EU. The member states have now confirmed that the rules will remain unchanged, however.

ETRC and its member companies mounted a successful lobbying campaign across Europe over the past few months, bringing the harmful effects of the proposed legislation to the attention of national governments, the European Parliament and the European Commission.

ETRC secretary general Keith Spinks said the amendment would prevent the loss to retailers of “many millions of pounds”. He added: “I don’t think it was a malicious move by the Commission; I just think it was something they overlooked in redrafting the original 1992 directive, but one they tried to defend in committee hearings. So it’s very useful that we now have an agreement to change it.”

ETRC president Frank O’Connell said: “I am delighted with the stance taken by the member states in changing this proposal. The proposed change to the rules would have had a significant effect on retail revenues in regional airports across Europe, especially those that feed the big hubs. I am particularly happy as airports in countries such as Ireland and those on the periphery of Europe would have been particularly disadvantaged by the proposed measure.”