World Health Organization threatens future of duty free liquor sales in latest strategy paper – 08/12/09
Source: ©The Moodie Report
By Dermot Davitt
INTERNATIONAL. The World Health Organization (WHO) Secretariat has initiated moves that could result in the outlawing of duty and tax free liquor sales. The move comes in WHO's latest strategy paper, published on 3 December.
The paper, entitled 'Strategies to reduce the harmful use of alcohol: draft global strategy' is the culmination of a consultation that began in 2008. It will be tabled at the WHO Executive Board meeting on 18–23 January 2010.
Of key concern to the duty free industry is a section under the heading ‘Pricing policies’. This recommends "taxing sales of alcoholic beverages to, and/or the importation of such beverages by, international travellers on the same basis as if such travellers had purchased such beverages in the domestic market of the country levying the taxes".
If adopted by the WHO Board in January it would go forward to the WHO Assembly in May, where governments would be encouraged to implement the strategy paper as policy.
European Travel Retail Council (ETRC) Secretary General Keith Spinks said: “This is a direct attack on the duty free industry and it will have to be addressed. The wording is unequivocal: WHO is seeking to remove the tax-free status of alcohol for travellers.
“As a strategy paper it will probably be adopted by the Executive Board in January, and will then pass forward to the Assembly. We should note that this is not a binding document, but many governments would feel an obligation to implement the strategy with the strength of UN backing behind it. In that case it would create chaos, with certain countries enforcing the details of the paper, and others rejecting them.
“We have been monitoring the progress of this document since a draft was produced in October. In that draft there was no reference to travellers’ purchases of tax-free products, so we are surprised to see such an explicit reference to them in the latest paper now.
“Our first task at ETRC level is to find out how much support the document has among EU states, and to talk to politicians to have the threat to the industry removed. We urge other stakeholders – airports, airlines, retailers and brand owners who benefit from this US$6.2 billion a year industry – to talk to their contacts at government level and get their support. We must do all we can to win this argument.”
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