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		More than 1000 British jobs - 700 in Scotland - will be lost from the Scotch Whisky industry as a result of a ban on duty free sales within the EU from 1999, a new study published today reveals. At least a further 350 jobs will go from Gin and Vodka production.
		Removal of the duty free market for travellers between EU member states will lose the Scotch Whisky industry sales worth £136 million, a figure greater than Scotch Whisky's fourth largest export market, Japan.
		Author of the report, Professor Sir Donald MacKay, Chairman of economic consultants Pieda, said that the blind determination of the European Commission to press ahead with abolition will cost jobs in urban and rural Scotland, the very areas designated by the EC as most requiring assistance in employment creation.
		He said: "It is perverse that the Commission should worsen employment prospects in economically disadvantaged areas where at the same time it is injecting cash to create jobs.
		"The Commission is threatening £2.9 billion of duty free sales, 70 per cent of the total EU duty free market. Yet it appears unwilling to undertake a proper economic assessment of the effect of its action for fear that it will be shown to be too economically damaging to the whole sectors of EU business."
		Scotch Whisky dominates EU duty free drinks markets, capturing 28 per cent. Gin and vodka account for a further ten per cent, and will be hit with the loss of £48 million in sales, according to the report prepared for the European Travel Research Foundation.
		Travellers to and from northern EU member states: UK; Scandinavia and Germany, where excise duties and consequently duty free sales are highest, will suffer most from increased travelling costs, forced up by the removal of duty free, the loss of whose contribution to lower ticket prices will threaten the viability of some regional airports and ferry companies.
		The Director General of The Scotch Whisky Association, Hugh Morison, welcomed the report, saying it added weight to the argument that the Commission should not press on with abolition until genuine harmonisation of alcoholic drinks taxes has been achieved.
		Mr Morison said: "When the European Commission legislated in 1992 to ban duty free as from 1999, it was envisaged that greater progress towards a single market would have been achieved. This has not happened. Today's 'single market' still consists of fifteen member states with fifteen different drinks tax regimes in which each category - wine, beer and spirits - is taxed differently. Spirits face tax discrimination in all of them. Despite this, the EC is determined to press ahead, and even ignored the European Parliament's call for a study into the economic impact of abolition.
		He added: "The Commission calls duty free an anomaly in a single market. That view might be sustainable in a genuine single market. At present none exists. The reality is that duty free is the only true single market, where tax does not distort price. Its abolition will only worsen discrimination against spirits.
		"The importance of duty free to UK business, and the threat to British jobs supported by the duty free trade, deserves the positive support of the UK government.
		"The new government has committed itself to creating jobs and improving competitiveness. It has just 672 days to knock sense into the EC, and fight for the retention of duty free sales in the EU until a genuine single market is achieved, in which competition is not distorted by tax. Or it can do nothing, and add more than 1000 new recruits to the list of those seeking work from welfare."

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