The Winter Olympics are hurting main street in Livigno's duty-free mountain enclave

LIVIGNO, Italy — On the climb to Livigno, atop the mountain pass before the road glides down to the village hosting snowboarding at the Winter Olympics, there sits a lonely customs checkpoint. Its guardhouse and gate are the only signs of an internal fiscal border within Italy, one that encircles the snow-blanketed valley and the duty-free status it has enjoyed for centuries.

The tax exemption that makes Livigno a shoppers' paradise, paradoxically, has left it not receiving the full economic bonus from hosting the Olympics, at least in the short term. On the contrary, shopkeepers are getting squeezed — even if hotels and restaurants are packed and cashing in. Still, everyone is hopeful the Games will yield a longer-term upside for the village.

Questioning economic benefits is routine for Olympic host cities, and it's been the talk of the town on Livigno's main street during the Games. Unlike in other Olympic mountain venues, business owners told The Associated Press that athletes, fans, workers and volunteers have boxed out visitors who come chasing duty-free deals in what is usually a bumper month.

''I'm not positive about the Olympics, because usually you are working more than double in this period, because this period for us was a high season. Now, this period is like our low season,'' said Olga Salari, owner of a toy story full of Lego sets. Olympic visitors, she added, ''don't even visit the shops.''

How bad has it been? Salari said she has already seen a 70% drop in sales compared with an average February. The Olympics run from Feb. 6-22.

Visitors to all six mountain venues must have either accreditation, accommodation reserved, event tickets or a ski pass — and so can't be day trippers only out for a deal.

Duty-free since Medieval times

When a paved road leading south, and later a tunnel north to Switzerland, finally arrived in the 20th century, that duty-free status became an economic elixir because it attracted tourists.

Visitors can purchase 300 euros ($356) worth of goods without Italy's 22% sales tax. There are specific limits on perfumes, cigarettes, cigars, liquor and gasoline.

Livigno's tax break has made it a haven for skiers who seize the chance to pick up a watch, cosmetics, perfume, electronics or a carton of cigarettes before the drive home to Austria, Germany, Switzerland and elsewhere. Outside of the Olympics, anyway.

''The tourists are more interested to see the competition. They're not so focused on shopping,'' said Manuel Galli, whose family owns an electronics store.

Some mountain venues are already getting a boost

The committee has said that the Olympics have spurred Italian authorities to upgrade the electrical distribution systems of Livigno and the other mountain host sites. Improvements to Livigno's health clinic and rail service are also legacy investments.

Other mountain venues' stores seem to be getting an economic boost.

Cortina d'Ampezzo's Vice Mayor Roberta Alverà told the AP by text message that the town has seen ''a significant influx of people.''

And they're not just filling hotels and restaurants. Visitors, as well as Italians who own second homes in the posh town, are also filling the shops along Cortina's pedestrian-only Corso Italia that runs through the center of town.

In Bormio's historic center, the cobblestone walkways have been filled with fans throughout the men's Alpine ski racing program, and its shops have seen plenty of activity.

Sergio Schena, a member of the organizing committee for the area of Livigno, said it's normal for some businesses to see more activity than others, but the long-term impact will be positive. The global spotlight should draw tourists from farther away, as happened in Turin after it hosted in 2006, he said.

''What we expect to happen is that the markets change, and we get more tourists from the United States and Asia,'' Schena said.

That doesn't suit some shop owners. Salari said her business model is based on people driving to Livigno and using the extra trunk space to take home purchases. She fears tourists who travel by plane will only buy goods small enough to fit in their luggage.

Still, most people in Livigno — even the other shopkeepers — are hoping Schema is right, trusting that the televised images of snowboarders and freestyle skiers soaring off its slopes and snow park have put Livigno on the world map, and will eventually attract even more tourists.

''This is very important because (the Games) are providing 360-degree publicity around the world and Livigno is coming across very well,'' said Derio Claoti, the owner of a shop that sells perfumes, whose sales have taken a 70% sales hit.

''We hope that the advertising that it's making for Livigno will work for the future,'' Longa said.

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Associated Press writers Colleen Barry in Milan, Andrew Dampf in Cortina and Pat Graham in Bormio contributed.

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