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Duty-Free Industry Opens Exhibition

October 28, 1986

CANNES, France (AP) _ The $7 billion duty-free shops industry opened a world exhibition here Tuesday, shadowed by plans to end duty-free privileges for air passengers traveling between any of the 12 Common Market nations.

More than 400 manufacturers of renowned products ranging from rare brands of Scotch to French perfumes exhibited their wares in the Festival Palace, home of the Cannes Film Festival.

Spokeswoman Melanie Kee said more than 1,000 delegates were registered to take part in the exhibition and a simultaneous conference. The luxury hotels of Cannes were booked up for the four-day event.

The president of the $3 million exhibition, Peter Brandsma of the French liquor firm Cointreau, announced the creation of a permanent secretariat to protect the interests of the duty-free industry.

Statistics published in conference documents said 40 percent of an estimated annual 500 million international air passengers visit duty-free shops at airports.

Among the millions of passengers using international ferries and cruise liners, the percentage of duty-free customers is estimated at 80 percent.

Savings made by passengers vary widely from one airport to the next and are difficult to estimate globally.

A recent report by a European consumer organization in Brussels estimated that the average saving over internal prices range from 70 percent for whisky and cigarettes at Copenhagen airport to 9 percent for whisky at Milan’s two international airports.

In West Germany, local laws force duty-free shops to charge European value- added tax, but the saving over regular German prices for some goods is still more than 30 percent.

The industry is mounting a Europe-wide campaign against plans by the Common Market to abolish duty-free purchases for anyone traveling from one Common Market country to another.

According to the plan, which is to take effect in 1992, duty-free shops at airports in Common Market nations could only cater to travelers about to depart on a flight to a non-market country.

Guntram Brendel, Swiss President of the International Confederation of Suppliers to Airlines, Airports and Shipping, said if the Common Market carries out the plan, ″duty-free shops would no longer be viable at any but the largest intercontinental airports in Europe.″

″Furthermore, airport operating costs would increase substantially, leading to a rise in international airline fares by 8 to 10 percent,″ he said.

Duty-free sales, concentrating on liquor, cigarettes and luxury goods, are a major source of income for airport administrations through fees paid by concession-holders.

The world’s first duty-free shop for air passengers was set up at Ireland’s Shannon Airport in the 1950s, when propeller-driven aircraft had to make stopovers there on trans-Atlantic flights.

Conference documents showed that London’s Heathrow airport has the world’s largest duty-free trade, more than $120 million annually. Amsterdam follows with $113 million and Charles de Gaulle airport in Paris is third with $101 million.

The largest turnover of any American duty-free shop is at Anchorage, Alaska, which sells $65 million worth of duty-free goods a year. Every person passing through the Alaskan airport spends an average $72 on duty-free items, a world record.

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