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.
