Duty-free retailers on Thursday vowed to fight the passage of a World Health Organisation (WHO) convention that would keep tax-free tobacco out of their shops, warning it would deal a death blow to the industry.

Delegates to a conference of the Tax Free World Association (TFWA), comprised of duty-free retailers said that raising prices for tobacco products has been proven to be ineffective in reducing consumption.

Negotiations on a global treaty on smoking, called the Framework Convention on Tobacco Control, are currently underway with the WHO pushing for a ratification among its 191 member nations by next year.

Under the convention, the WHO and anti-tobacco activists are proposing a ban or a restriction on the sale of duty-free tobacco, arguing that higher prices would reduce consumption. They have also said that duty-free tobacco is an unfair subsidy for travellers and raised concerns it could be used as a channel for smuggling.

"On their premise that cheaper tobacco increases consumption, our key argument is that duty-free does not increase consumption," said Keith Spinks, director-general of the International Travel Retail Confederation.

He said that the abolition of tax-free tobacco by the European Union in 1999 has not made an impact on overall consumption. Spinks also said that the duty-free industry is among the "most controlled" sector for retailing tobacco which should ease concerns over it being used as a channel for smuggling.

Yearly turnover for duty-free tobacco is about 2.4 billion dollars, accounting for 12 per cent of the total tax-free industry sales, Spinks said. In Japan alone, it employs 100,000 people, he added.

Other delegates said the presence of duty-free tobacco in their shops has served as an attraction for travellers to enter and buy other things such as liquor, chocolates and perfumes.

Paul Topping of Britain-based duty-free operator Alpha cited research which showed that 86 per cent of those who bought tobacco made it as a "predetermined purchase" and that 49 per cent said they will not go to duty-free shops without tobacco.

He told delegates at a workshop that "we will be facing a crisis of some sort if tobacco goes" with other delegates saying it would spell the end of their business. Spinks said that duty-free shopping is part of the overall travel experience, and is not a subsidy.

"It has been there since 1949. It is part of the overall commercial package of airports, airlines and ferry companies," he told AFP on the sides of the workshop.

The delegates said they will increase the pace of their lobbying ahead of a meeting of WHO regional members in October to consolidate their positions to be presented at a WHO general assembly next year in Geneva.

"We feel that if tobacco is a precedent that can be set... it might be that the next step will be alchohol. They want to control consumption," Spinks said.

The draft treaty could affect advertising, farming subsidies, education, bans on smoking in public places and a crackdown on tobacco smuggling.