Duty-free concessions were a hidden, regressive subsidy favouring the alcohol and tobacco industries, the European Commissioner for the Single Market, Mr Mario Monti, told the European Parliament.
Mr Monti said he had no personal opinion against duty-free but had a obligation to implement the single market by eliminating tax havens. "It would be highly inconsistent of me to go on campaigning for the elimination of tax havens across Europe and then protect local tax havens through duty-free."
He described it as a regressive subsidy "aimed at encouraging people to smoke and drink".
Mr Monti appeared to seal the fate of duty-free and confirm its abolition in June next year when he told Irish and British MEPs during the parliament's question time that member-states had had a derogation of seven years to adjust to the single market.
The MEPs called for an EU-wide study on the socio-economic consequences of the abolition of duty-free. Mr Mark Watts, a British Labour MEP, called on the Commissioner to visit his constituency and tell the ferry company there what workers they should let go and what ferries they should put out of action.
He asked Mr Monti, if the Ecofin ministers (the EU's finance ministers) were to agree at their next meeting in May to carry out the study, would the Commissioner implement it? The Commissioner said he did not expect any consensus among finance ministers for such a study.
Ms Bernie Malone, the Labour MEP for Dublin, accused the Commissioner of being arrogant and totally out of touch with public opinion. She referred to the study published on Monday which said that almost 9,000 Irish jobs would be lost if duty-free was abolished and that it would add 15 £15 to 17 £17 to an air ticket.
Mr Monti said the Commission was not out of touch. Other "broader" consumer organisations believed duty-free did not represent value for the EU taxpayer. They argued that, apart from alcohol and tobacco, duty-free prices were no less than on many high streets.
He said the Commission was not insensitive to the difficulties posed by its abolition, and it was possible for some form of state aid to be proposed by member-states on the basis of evidence from specific studies.
Mr Monti rejected a claim by the Fine Gael MEP, Ms Mary Banotti, that the Commission was carrying out a study of duty-free in US airports.
Ms Banotti said it was most inconsistent for the Commission to study other markets when it refused to consider a study in Europe. Mr Monti said that while there was no such study "the Commission, of course, is looking around at the experience in the US and other areas".
