EU doubles duty-free allowances

Emily Pacey

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EU to double duty-free allowances for travellers returning from outside Europe

The European Union has agreed to double the duty-free allowances for travellers returning to Europe. Under the new legislation, air and sea travellers may bring goods to the value of Eu430 ($545) into Europe tax-free, while land travellers will be subject to a lower allowance of Eu300 ($379).

European Travel Retail Council secretary general Keith Spinks said: “I think it was the best we could have achieved, considering that during the debate yesterday there was a strong push to limit allowances to Eu300 across the board. We were seeking Eu500 ($633) as a minimum, but bearing in mind that this argument has been going on a long time, the result is satisfactory.”

He indicated that member states bordering non-EU countries, who lose shoppers to neighbouring countries with much lower tobacco and liquor prices, had insisted on the lower allowance for land border travellers.

One point of concern for the duty-free industry is that under the new legislation fragrances, which like liquor and tobacco used to be counted quantitatively, will now be included as part of the Eu430 or Eu300 allowance. At present, the limit for fragrances is 56ml for edp and 250ml for edt. Spinks explained that this is because fragrances are no longer produced using alcohol, and therefore are not subject to excise duty. Spinks described the development as “disappointing” and expressed concern that passengers will find the new rule confusing, particularly coming so soon after the recent liquids ban.

Tobacco and liquor allowances have also changed. EU member states will now have the power to restrict land and sea travellers to 40 cigarette sticks instead of 200.

Beer, which to date has not been subject to allowance limits, will now have an upper limit of 16 litres, although the allowance for wine has doubled from two to four litres. The new beer allowance is an attempt to harmonise rules across the EU. Since 2000, Finland, which holds the EU presidency, has limited travellers to the country to 16 litres of beer in order to protect its liquor industry from neighbouring countries with much lower liquor prices.

Spinks does not believe the increase in allowances will have a dramatic impact on the industry when it comes into force some time next year. “As a whole, this is not going to have a big impact on the European industry. The main beneficiaries will be domestic retailers and duty-free operators outside Europe.”