Can I buy an iPhone in Duty Free?

One of the most requested item for travellers concerns Apple's iPhone. The original iPhone was launched in June 2007 with the 5th generation, the iPhone 4S, launched in October 2011 - some 183.2 million handsets sold up until the end of the first quarter of 2012.

So why are Apple products not seen widely throughout the world in Duty Free retail outlets?

Well there are numerous reasons for this -

• Such is the demand for iPhones, Apple have to limit the number of countries they can launch into. Therefore duty free is not top priority.
• Most phones are sold with a SIM lock which restricts the use of the phone to one particular carrier, a common practice with subsidized GSM phones. Unlike most GSM phones however, the phone cannot be officially unlocked by entering a code. The locked / unlocked state is maintained on Apple's servers per IMEI and is set when the iPhone is activated.
• Apple's favoured method of distribution is via exclusive contracts with country operators so customers have to buy into a contract with the provider. Since duty free retailers cannot offer a phone air time contract and would be selling to customers leaving the country this would take the retailers outside of the Apple model of distribution.

However, with Apple having some of the hottest electronic items in the world with the iPhone, iPad, iMac, some of the larger international duty free operators have stocks which prove popular as the prices are usually below the normal prices on the domestic market.

Can I buy Duty Free in.......?

Some of the most common questions from international travellers are "Can I buy Duty Free in?" and "What am I allowed to take?".

These questions are valid since buying and transporting duty free goods around the world is not so straight forward. For instance take in to account the following issues...

• Alcohol - there are many Muslim countries that do not allow alcohol importation (Saudi Arabia, Kuwait) - some allow under strict circumstances (Qatar allows from licensed premises only and for foreigners with a licence). There are other countries such as Turkey which allow alcohol.
• Tobacco - while there is no prohibition on tobacco in any country there are increasing restrictions on what can be imported and the also the increasing amount of taxation imposed on the domestic market. This increase in tax has fuelled grey market trade and smuggling.
• Electrical Goods - with small margins, ever changing model updates and very competitive domestic markets it is not so clear where the best prices lie.

Two areas which will move to the forefront in the future will be Duty Free Arrival Shops and also online retailing by duty free operators. This will reduce duty free goods being transported all around the world and duty free operators aligning their prices more towards savings against domestic market prices.

Cigarettes disappear from UK supermarket shelves as of April 2012

As of 6th April 2012 all tobacco products in all supermarkets and shops (only over 280 sq m) must be hidden in closed cupboards or under the counter away from view. Smaller shops and specialist tobacconists will have to fall into line by 2015. This is part of the tough government anti smoking legislation which is aimed to help discourage younger people from taking up the habit.

While there are only relatively few countries taking similar action - Ireland (2009), Iceland (2001), Norway (2010) and Thailand (2005) and 10 states in Canada (2004), (and with Australia moving towards plain packaging for all cigarettes and a ban on passengers importing duty free cigarettes as well), the number of smokers in the UK has fallen from 45% (1974) to 21% currently. The government is looking to reduce this to 18.5% by 2015.

The Duty Free industry is currently not part of the latest legislation but it is certain that the Tobacco manufacturers and Duty Free Operators will watching this trend with much trepidation as it is only a matter of time before legislation encroaches on duty free territory.

A Duty Free mission from Brazil to Argentina and back.

A Duty Free Shop or Freeshop, as it is known in Latin America, is a growing phenomenon in the continent, especially with the new found strength of the Brazilian economy. Brazil, whose GDP recently overtook the UK, is now the powerhouse of the region with the development of oil reserves and with the forthcoming football World Cup in 2014 and the Olympic Games to follow in 2016, everything bodes well for the growing richer middle classes. Add to this the accelerating desire for Brazilians to travel abroad and the high domestic cost of luxury products, sometimes loaded with 250% import tax, (especially for imported beauty, fragrance and cosmetics brands) and you have a potential explosion in the duty free retail market.

A recent article by Natalie Erlich of the CNBC Business Network, outlines the growth of the Beauty Products sector in Latin America and the dominance of world brands produced by the majors of Estée Lauder, L’Oreal, LVMH, Proctor & Gamble and Unilever. CNBC quoted some significant numbers from Cedric Prouvé, group president of International for Estée Lauder; sales in airports of their cosmetics brand M.A.C accounted for 40% to Brazilians in Argentinian duty free airport stores and 30% to Brazilians from Chilean airports.

This has not gone unnoticed by the Transport Ministry, who are finally gearing up the infrastructure for the expected traffic influx for The Soccer and The Games. For the first time airport development has been franchised out to foreign firms to construct new terminals in both Natal and Sao Paulo, others are expected to follow. These Operators will bring airport terminals with a retail bias and the much needed non-aeronautical revenues, so common at European and Asian airports.

Then, you have the border crossing Duty Free shops located at many of the frontier points in Mercosur countries. Mercosur is the Latin version of The EU common market, except (that is) for duty free sales, where they are expanding the market and not abolishing it as they did in Europe. Crossing between Mercosur’s Uruguay, Paraguay, Argentina and Brazil can be and is becoming an unforgettable shopping experience.

Duty Free Shop Puerto Iguazú, located near the famous Iguassu Falls and between the busy tourist border crossing to see the Argentinian or Brazilian version the Cataratas do Iguaçu, claims (with some justification), to be the best duty free shop in the world. Better described as an emporium, this Tax Free store sells a typical range of luxury branded duty free perfumes, cosmetics, liquors and tobaccos as well as home appliances such as kettles, toasters, televisions, microwave ovens and anything electrical required for the home or on your travels. All sold at prices well below Brazilian market levels. Whisky, especially 12 year old brands, such as Johnnie Walker Black Label and cigarettes are sold at prices matching the likes of Dubai Duty Free. All the other products are sufficiently competitive to encourage Brazilians to drive the 1250 km from Sao Paulo just to stock up, whilst taking in The Falls for a weekend. Duty Free Allowances are generous compared to Europe too.

Interestingly, at this Shopping Centre you can buy duty free when coming from Brazil, turn around and return home without the need to cross into Argentina. This is another phenomenon, not known to frontiers like the Canadian Border Crossing Stores into the USA, where you have to leave the country for a certain period.

Coming soon to these Duty Free Shopping Centres will be internet sales and online Duty Free pre-order, so buying Tax Free and avoiding the queues will evolve just like booking a hire car did some years ago.

Search here, to check all world Duty Free retail outlets, rules, regulations and customs allowances for your trip.

Proposed New Security Checks on Passengers by the U.S. (even though you are not going there!!!!)

On first going to University in the USA in the early 1980s it was relatively straight forward - I filled out my H1B visa application form to study there, I bought a round trip ticket and flew to Philadelphia.

But as everyone is quite aware now it is not as easy even going on vacation there - pre-authorisation is required via the Electronic System for Travel Authorization (ESTA) is a programme and this is a requirement for everyone!. The simple task of buying duty free goods is no longer a formality with complicated rules on liquids, tamper proof bags and also forward journeys when you arrive in the USA.

Now, there are plans afoot at the insistence of the US Department of Homeland Security which require British Airways and other airlines flying to certain airports outside America to submit passengers' personal data to US authorities. The information is checked against a "No Fly" list containing tens of thousands of names. Even if the flight plan steers well clear of US territory, travellers whom the Americans regard as suspicious will be denied boarding.

The scheme due to start in April covers flights to Canada, Cuba, Mexico and the Caribbean.

So who will be affected by the new rule?

725,000: Number of British visitors to Canada each year. Airports affected: Ottawa, Toronto, Montreal and Halifax
300,000: Number of British visitors to Mexico each year. Airports affected: Mexico City and Cancun
160,000: Number of British visitors to Cuba each year. Airports affected: Havana, Varadero and Holguin.

plus the traffic to the other Caribbean countries.

Looking after our security or draconian measures? It has certainly taken a chunk of money out of our duty free money as there certainly will be a cost attached to this!

Olympic London awaits the Tax Free Shopping boom

With the Easter holiday getaway starting this week and the Olympic Games coming to London this summer, Britain’s airports and Tax Free Shopping Centres are hopeful that this will bring a huge surge in retail sales. But, as always during big events and holiday periods, there is always a potential hurdle to overcome first.

This year, London’s Stansted airport is preparing for a baggage handlers strike over the Easter break, but as this airport handles many low cost flights travellers are getting used to taking carry-on cabin luggage only with them. This should help to avoid part of the problem.

Meanwhile, Europe’s largest low-cost carrier Ryanair, the airline who helped to precipitate the luggage change by encouraging flyers to carry their baggage on board rather than check it in, seem locked in a perennial battle with the EU transport administrators.

Whilst Michael O’Leary, the forceful CEO of Ryanair, wants more carry-on baggage, the EU Transport Department is pushing through with measures to curb the commercial wings of airlines. Issues such as airline credit card charges and compensation are on the EU Motion, but the largest issue to be discussed is the restrictions imposed by some budget carriers imposed on their passengers with a rule known as “the one bag rule”. Airports in Europe claim this baggage rule is hurting their airport retail sales, whereas some airlines seem to disagree.

As the baggage battle rumbles on, both parties seem to have forgotten that Duty Free shopping was abolished in The European Union over 10 years ago and hence goods can be purchased on arrival as well as on departure from airports.

Duty Free shopping on arrival is well known in Latin America , Oceania and SE Asia, but is unheard-of as yet in Europe or North America. Now, travellers can discover where they can buy duty free in the baggage hall and avoid the baggage and security issues by checking the global search site for duty free and tax free shopping.

Tax Refund retailers have it much easier as all tourists to London’s famous shopping centres need to do is purchase their goods in mainstream shops and then use one of the many tax refund firms to recover and re-pay the VAT sales tax to them. All the rules related to tax-refund shopping can also be found at the world search for duty free shopping.

What is Duty Free?

People use this phrase a lot but how many know what it stands for and where did it come from?.... Let us take a look....


Duty Free goods historically are free of duty and any local, national taxes (e.g. sales tax, VAT, excise duties) with the obligation that the goods are exported. However, times have moved on now we are faced with Duty Free Zones (DFZ), bonded warehouses areas used to store goods until re-export or duty paid on them to release onto the local market - and also Duty / Tax Free countries.

The origins of Duty Free lie in Shannon Airport (Ireland) in 1947 where the first Duty Free Shops were established specifically on the back of the growth of Transatlantic traffic to the USA with a legislation allowing to sell without taxes. This duty free shopping concept became the model for other airports, followed by cruise ships, port terminals, border crossing points and airlines.

One notable change came in 1999 in the European Union (EU) with the abolition of duty free shopping sales between member states. To this day there is a lot of confusion at airports as the Duty Free Shops have dual prices - one for people traveling within the EU and one for outside the EU.

Duty Free Shopping trends for the future?

With Duty Free shopping sales at €44 billion for 2011 and double digit percentage increases over the next four years it is estimated that it will reach €64 billion in 2015 - far out stripping domestic market increases throughout the world. While it is expected there will be duty free operator consolidation there are few areas which will move to the front of discussion -

• Arrival Duty Free Shops - an increasing number of countries have passed legislation to include arrival duty free outlets including the latest addition of Switzerland in 2011.
• Internet Retailing - with this becoming an increasing force in overall retailing it is inevitable that the Travel Retailers will have to take this phenomenon more seriously. With the special nature of duty free retailing it will take a lot more thought to tap into this market but the rewards are there for those who are successful.

Please leave your thoughts or ideas........

EU to challenge duty free one bag rule.

Moves are afoot in Brussels to bring certain airline practices such as the renowned "one bag carry-on baggage rule" to order. A recent trade campaign by lobby group ETRC, who appear to represent European airports and their concession retailers, has stepped up their action and called all duty free and travel retailers to order and asked them to present their views to Brussels through an online EU questionnaire.

Duty Free News International one of the leading trade publications for the industry published this press release issued by the lobby group and their partners Hume Brophy of Ireland, "European Parliament calls for end of one-bag rule".

Of course, for the flyer wishing to buy goods in the airport this is all good news, but longer term is this the route that will benefit passengers? Catharine MacIntosh from zerobaggage.com thinks not as she has been developing her zero baggage concept for some time now. MacIntosh holds the theory that weight can be reduced on aircraft and that many essential goods, such as toiletries, need not be purchase or carried outbound at all. Many Eco groups seem to agree.

Meanwhile in Brussels, the EU Transport Commission wishes to legislate against many of the alleged "airline unfair practices" whilst seemingly wishing to protect the airports and ensure that the so-called "ancillary revenues" (from which airlines benefit) are more equally distributed. A recent article in the Los Angeles Times explains in detail how airports now see themselves as Mall Operators and no longer simple transport locations.

Where will this leave the passenger? Strange things can happen in life and the conventional theories do not all ways hold true. A good example of this is how everybody loves to hate Ryanair and yet their traffic grows and grows. They are now the largest airline in Europe and larger than many traditional airlines such as British Airways. They certainly make more profit.

What is it about an airline with so many alleged onerous and unfair practices that attracts more and more people to their flights? The same could be said of Spirit in the USA.

This blog advocates the sale of duty free goods on arrival as it offers the consumer a practical option, whilst avoiding all those baggage and airline liquid security issues.

Perhaps this baggage battle is not about the flyer at all, but more about who controls a larger share of the retail pie? Either way, The European Commission have decided that it is their mission to protect the traveler and to alienate foreign airlines such as the Chinese, for using too much carbon.

Whilst the airports and airlines battle it out for their share of the revenues, check before you fly to see if you can buy on arrival and how much baggage you can carry and to where.

Search the world for duty free on arrival "The App"

Every airport, every airline, ferries, cruises, border stores and tax-free shopping... check before you fly!

www.dutyfreeonarrival.com

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