Eurotunnel boss sees no Brexit impact, was joking about duty free boost

PARIS (Reuters) - The boss of Eurotunnel said on Thursday that Britain leaving the European Union would have little impact on the under-the-English-Channel business, dismissing as a joke his prediction last year about getting a boost from new duty-free shopping.

Slideshow ( 2 images )

Chief Executive Jacques Gounon also told Reuters in an interview that he was expecting higher second-quarter sales for Eurotunnel - which runs under the water between England and France - because of the Euro 2016 football tournament in France and thriving freight trucks traffic.

“I do not see a visible and identifiable impact on Eurotunnel’s business from a British exit”, Gounon said, referring to Britain’s June 23 referendum on EU membership.

“We are a vital economic artery between Britain and the Continent, with very high customer loyalty... Eurotunnel benefits from a permanent and continuous traffic flow that has economic justifications and for which we do not expect disruption in the medium-to-long term.”

Last November, Gounon told the Financial Times newspaper the tunnel could get an “incredible boost” from Britain leaving, predicting the return of duty free shopping traffic under which Britons used to make the trip in order to load up on tariff-free drinks and cigarettes. Cross-border duty exemptions within the EU were abolished in 1999.

“That lighthearted comment was made many months ago and the arguments have moved on a long way since then; overall we believe that the impact for Eurotunnel would be neutral, whatever the result of the referendum,” Gounon told Reuters.

Even a sharp drop in the value of the pound would not change anything, he said.

“In 22 years of operation, there has been no clear correlation between the Pound level and the fact that our markets are growing 2-3 percent a year.”

The British government has stepped up warnings against leaving the EU and most economists expect an exit would deal a blow to Britain’s economy in both the short-and longer-term and to the British Pound.

But Gounon doubted much would deter British tourists using their cars for a trip to Normandy, Brittany or the French Alps. Some have country houses in France they are likely to continue visiting, Brexit or not, he said.

Eurotunnel made two-thirds of its revenue of 1.222 billion euros (93 million pounds) last year from the shuttle services, with Britons representing 80 percent of car passengers.

In 2015, a record 10.4 million passengers took the Eurostar train, while Eurotunnel’s shuttle services carried 2.6 million passenger vehicles and 1.5 million trucks.

Gounon said he expected trucks traffic, which in April set its sixth consecutive month of record usage, to reach a targeted of 1.6 million by year-end.

There was however still “a small concern” about Eurostar traffic, which fell 3 percent in the first quarter 2016 from a year earlier after the March Brussels attacks and 6 percent in the fourth quarter 2015 after the November Paris attacks.

Editing by Andrew Callus/Jeremy Gaunt