arrival duty free

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........