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The issue encountered while using DISTINCT in a SELECT statement is that it can significantly slow down the performance of the query, especially if there are a large number of rows being fetched. This is because the database has to compare each row with every other row to ensure that there are no duplicates before returning the results. Additionally, using DISTINCT can also cause unexpected results if the query includes columns that have different values for each row, as DISTINCT will eliminate all duplicates, regardless of whether they are truly identical or not.