The ‘sucker deal’ view of duty free

on 24 November, 2015

An article in The New York Times exploring where to find the best duty free bargains in the Americas caught my eye recently.

To sum up the way many Americans feel about duty free shopping the author quoted a memorable line from George Costanza, that neurotic, penny-pinching character from the hit ’90s TV sitcom Seinfeld. “Duty free is the biggest sucker deal in retail!”

Despite rising airport retail standards, duty free shopping has never really caught on in the US, where comparatively few travel internationally and where duty free price savings versus the domestic market are small. The same public scepticism over duty free is growing in parts of Europe too – just look at the furious uproar in the UK this summer over boarding passes, where retailers were accused of pocketing VAT savings rather than passing them on to travellers.

This wasn’t an isolated case of duty free bashing. In recent years I’ve lost count of the number of news stories published in the mainstream press which decry duty free shops as rip-off merchants, comparing prices for identical products bought on the high street and at the airport.

In many ways the travel retail industry only has itself to blame for this state of affairs. From its earliest days in the 1950s and ’60s airport retailers have played up the idea they were offering travellers handsome savings on liquor, tobacco and fragrances. However, with duty free inside the European Union axed in 1999 and airport rents continuing to rise, maintaining savings while turning a profit is getting harder and harder for both suppliers and retailers.

The public image of airport shopping in Europe and North America badly needs the attention of a talented team of spin doctors. Genuine price savings have to be communicated more effectively and backed up with evidence, while exclusivity, provenance and gifting need to be moved up the agenda. In an age where groceries can be ordered in seconds from a smartphone, customers need to have a good reason to lug a bottle of spirits around with them on their travels.

Happily, the perception of duty free shopping in Asia Pacific among travellers is still mainly a positive, aspirational one. And for all the talk of a regional slow-down, the broad direction of the liquor business there still seems firmly upmarket. For instance, Whyte & Mackay has just opened its first The Dalmore airport store at Taiwan’s Taoyuan international airport. Opened until the end of the year, the pop-up in Terminal 1 stocks a range of rare expressions, including The Dalmore Alexander III, the only single malt whisky in the world produced using a six- cask finish, and The Dalmore Constellation Collection, a 21-strong selection of rare single-cask expressions.

Similarly, this month sees DFS Group’s fifth annual Masters of Wines & Spirits event in Singapore, which this year celebrates 50 years of Singaporean independence. The collection, which will be exhibited at the retailer’s new duplex store in Singapore Changi airport Terminal 3, comprises 60 über- premium pieces from 47 luxury drinks companies. Rarities include a case of Château Cheval Blanc 1939, presented in its original wood case and straw and released for the first time; Port Ellen 33 Years Old Single Cask, hailing from the revered but now closed Islay distillery; and The Macallan Five Decades Collection, which features five Fine & Rare single- cask vintages from 1946, 1950, 1975, 1989 and 1995.

Unsurprisingly, I was given none of the prices for any of the products mentioned. It really is a case of if you have to ask the price you really shouldn’t be browsing in the first place. Clearly, for the moment at least, in some parts of the travel retail world price isn’t everything.

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