The European Commission was yesterday accused of arrogance, insensitivity and intransigence by the duty-free industry, unions, and Irish MEPs for flouting what they all claimed was the clearly expressed, democratic wishes of the Vienna summit to allow for a limited extension of the facility.
The Minister for Public Enterprise, Ms O'Rourke, said that the Commission's report was "inadequate", "vague", and "far from conclusive" and insisted that the decision would be taken at a political level by heads of government, not by "unelected bureaucrats".
"The Irish Government's stated position is for a five-year reprieve and we will devote all our energies to securing that objective," she said. Mr Frank O'Connell, chairman of the International Duty-Free Confederation (IFDC), told a press conference in Brussels that Commission attempts to minimise the significance of 50,000 job losses was reprehensible and warned that the industry still faced "total uncertainty" about how it was to apply the successor regime.
Mr Philipe Hamon, representing Europe's airports, insisted that the industry now recognised the inevitability of the demise of duty free but believed that another five years should be allowed to work together on the alternative.
Airports also faced huge investment needs in the next few years, a burden which they did not want to have to fall on the exchequer, he said.
Mr Vic Moorcraft, of P&O, concentrated his fire on the successor tax regimes to duty-free, warning of the administrative chaos for companies and the confusion to passengers involved in prices having to be changed in the course of a journey.
With duty free abolished, VAT and excise duty must be levied on goods at the different rates prevailing in the member-states that passengers are travelling between. The problem is that excise duty is charged at the rate of the country where the goods are loaded, but only while in that country's territorial waters or in international waters.
VAT, however, is charged at the rate of the country from which the boat or plane is coming.
Mr Moorcroft said that on a return journey to France a ferry would have to change its prices four times - in effect 20 times a day.
