The Duty Free Shopping Copa runneth over for travelling Brazilians.

Brazil is fast becoming the consumer product cash cow for major brand owners with an overheating demand for “produtos importados”, or branded consumer products, in our speak.

Brazil’s domestic retail prices for consumer goods are far higher than in Europe, The USA and neighbouring Paraguay or Bolivia, so “shopping tourism” is now a major business from Brazil. Duty Free Shopping Centres have become a high priority target for shopping tourists, especially for Fragrances, Beauty and Cosmetics products.

In an attempt to dampen exploding consumer demand and to protect local manufacturing, Brazil’s President Dilma Rousseff has recently introduced a range of protectionist import tariffs whilst disregarding the price of some locally produced products, which may already be up to 25% more expensive than branded imports.

The paradox is that Dilma’s protectionist policies are helping to drive up prices of all consumer products and this has precipitated an outbound Tax Free Shopping tourism boom. Their currency, the $Reais is also at its highest level for years against the Dollar, Pound and Euro, so not only are overseas products cheaper, but cheaper still with an estimated 20% overvalued currency. Take this equation into a Duty Free Store and Brazilians have become like the proverbial “kids in a sweetshop” when passing through border stores or airports.

Yahoo Brazil’s InfoMoney Report recently enlisted the advice from Braztoa (Brazil Association of Tour Operatos) Magda Nassar and Julio Serson of the Brazilian Hotel Operators Forum (FOHB) to suggest the best shopping locations for outbound tourists.

The USA came out as the top recommendation, especially during the department store liquidation sale periods according to Julio Serson. The Duty Free Special Territory Panama, where the price for electronics is the lowest in the Latin continent, came a close second. Add to that an expanding COPA Airlines network to Brazil with a large regional airline hub at Panama Tocumen airport and you have a recipe for Tax Free shopping success. Magda Nassar was quoted as saying “As a Tax Free shopping country, prices in Panama are super competitive”.

Nassar also mentioned some interesting travel shopping ideas not normally associated with Brazil, Cruises to Panama and shopping in Dubai and other Middle Eastern States such as Lebanon. With Emirates Airlines now flying from both Rio de Janeiro and Sao Paulo to The UAE, it is fascinating to note how the Brazilian spending tentacles are spreading further afield and how gold and jewellery savings were highlighted.

But there is caution in the air too. An excellent report by Ambrose Evans-Pritchard, International Business Editor for Britain’s Daily Telegraph, highlights the risks and statistics quoting influential sources in his report ………

The Latin Tiger may have overtaken France, Italy, and Britain to become the world’s fifth largest economy on some measures but it has also been relegated to 126th place by the World Bank for 'ease of doing business', behind much of Africa. Cyclical warning signs are flashing amber across the board.

Knight Frank’s global survey shows that Brazil’s house prices rose 26pc last year, leading the world by far. The global average was 0.5pc. "Prices are crazy," said Eduardo Paes, Rio’s mayor. Even 'favelas' are frothy as developers close in. A good slum is worth a four-bedroom house in Arizona - if you can prove ownership.

Brazil’s economy ground to halt late last year. It has since rebounded, but may struggle to repeat the great leap forward of the Lula years given the headwinds of a super-strong real (20pc overvalued says Goldman Sachs). Labour productivity has not remotely kept pace with China or the Asian tigers, which is why industrial output has almost halved to 14.6pc of GDP, a level last seen before the great industrialization drive of the of late 1950s. The country is becoming 'post-industrial' before it is rich.

But, Brazilians are feeling rich already, especially now they travel abroad en masse and search the world for Duty Free bargains.

Calls for Child-Free Flights!

 

According to a recent new poll carried out by JetCost on 1,666 adults nearly two thirds of the respondents claimed their biggest grudge inflight was "loud children" followed by poor food and lack of legroom. The poll then went onto to identify that 53% of respondents would be in favour of child-free flights.

Ongoing issue for airlines - children on flights

Other issues include reclining seating and also seat allocation but even historical surveys still point to the children issue on flights although there is no clear evidence of any airline adopting such a stance.

However, there may be a movement towards this as Malayasian Airlines new Kuala Lumpur - London A380 service will ban all children under 12 years old from its top deck in response to customer complaints about crying children. Kuala Lumpur airport is one of growing number of airports in the Far East offering duty free on arrival to its incoming passengers.

 

Bahrain F1 Grand Prix 2012 - will it go ahead?

With the Chinese F1 Grand Prix going ahead this weekend (12-14th April) the subject everyone in the Formula One circuit is talking about is "will the Bahrain Grand Prix go ahead?". 

With the first Bahrain Grand Prix taking place in 2004 even taking the Best Organised Grand Prix by FIA the cracks first started to appear when the 2011 Bahrain Grand Prix was cancelled due social unrest within the country. The race was not rescheduled for later on in the season. The same thorny issues of social unrest and civil protests still exists which leaves the 2012 hanging in the balance. 

Bernie Ecclestone, CEO of Formula Management / Administration, is adamant that the teams will be there and there is no security risk to the competitors. He will be meeting all the racing teams principals in Shanghai although officially the issue of Bahrain will not be on the agenda.

While Bahrain gets over 2 million visitors annually, the majority of those coming from other regional Arab countries, there is an increasing number from outside of the region. With the country having duty free on arrival shops the country can ill afford to have negative publicity which will affect the increasing important tourism industry replacing the depleting oil industry.


Only time will tell.....

The Smartphone Duty Free City of the East but located in the West.

Paraguay’s Ciudad del Este, or translated from Spanish “City of the East”, is in the West to most Europeans as it is located on the great South American Paraná River that cuts a frontier between Mercosur’s tri-border area of Paraguay, Brazil and Argentina.

The City of the East is indeed a Latin equivalent of the famous Far Eastern shopping havens of Bangkok and Hong Kong, with electrical products and gadgets the lifeblood of this city’s retail bonanza. Strolling the main street after negotiating the precarious Friendship Bridge from Foz do Iguaçu in Brazil, there are shops, mini malls and stalls selling every conceivable electrical appliance at prices far cheaper than in the adjacent and modernising Brazil, just across the river.

C de E is supposed to be threatening, but during the hustle and bustle of the day and the midday autumn heat rising to 35 degrees, the only risk encountered would be buying too many pairs of socks. Likewise, why is every foreign tourist named “taxi”, whenever they travel to such locations?

Goods are sold at Duty Free, Tax Free or low-tax discounted prices. The city is a (Duty Free) Special Freezone, created to capitalise on the border crossing traffic coming from Brazil’s industrial and economic heartland cities of São Paulo, Londrina, Curitiba and Campinas, encompassing a population rising to 20 million or more.

Mobile phones are the in-demand item, especially the Apple iPhone and iPad, which can be bought for around 40 per cent less than in Brazil and without a service contract. A multitude of other cell phones are also available as are spares, cables, batteries and accessories for all makes of mobile. A replacement battery for the iconic Nokia 6310 or 6230 costs USD$1 per unit and to date charging well, unlike a similar version bought at Bangkok’s MBK.

Paraguay has the infamous reputation of being the copy capital of the Americas, but there was zero evidence of fake products in the plush stores operated by Mannah’s “La Petisquera”, “Macedonia” or the largest department store “Monalisa”.

The latter provides a very good early morning coffee and a live pianist giving you Sammy Cahn’s best. Not, the three Paraguayan Indians on the harp one expects.

Yes, some of the mini malls are a little unkempt, but when did you last find a similar arcade in Europe that can fix your camera or phone in an hour, rather than negotiate a sophisticated westernised customer service system equivalent to a maze?

At the arrival or departure border crossing and right next to the Customs control is the stylish “Shopping del Este” Centre, a quality Mall that would grace any European city, with air conditioning that works to the full and easily entices you in from the Middle Eastern like, dry heat.

In fact, the heat is not the only Arabic similarity as many of the traders who run the commerce in the city have Lebanese or Gulf roots and it is strange to hear Bukra, Insha'allah and Tamam mixed with Buenos Dias, Gracias and Tudo Bem.

The final hurdle is to return to Brazil over the bridge, by bus, taxi or on foot and passing the nonchalant Paraguayan Customs and Immigration Officials. When asked what the duty free allowances are for arriving into Paraguay, the Customs Officer needed some convincing to find the exact exemptions. His bemusement as to why anyone would want to bring goods into Paraguay was somewhat justifiable if you consider that everything in Brazil is more expensive.

With all the hearsay Paraguayan threats avoided, the biggest danger is the miniscule guard rail protecting you from the mighty Paraná, 200 hundred metres below.

And the Brazilian taxi driver who takes you home.

Clearly, they hadn’t yet been to Ciudad del Este to get their counting gadgets working properly!

Click here to check all world Duty Free shopping centres and Allowances.

Duty Free translations

Duty Free = Libre de impuestos = hors taxes = livres de impostos

Arrivals shops = tiendas al la llegada = lojas francas na chegada

Check before you fly at.....

www.dutyfreeonarrival.com

www.dutyfreeonarrival.com

We have moved!

http://dutyfreeonarrival.com

http://arrivals-dutyfree.com

http://dutyfreealallegada.com

http://dutyfreenachegada.com

http://dutyfreealarrivee.com

Will airline retail sales fly high over the heads of the airports?

Duty Free was established at Shannon Airport in Ireland in 1947. It is now a $30Billion Business. But, does the classic duty free model make sense for airlines today? Are airlines receiving an appropriate return from their duty free business? The classic duty free model, as it pertains to airlines, is that goods are purchased in an airport "outbound" or in the air and "exported" by being carried through the air to a different country.

But what proportion of total duty free revenues do airlines receive? The answer is an astounding 8 percent in 2007, according to statistics supplied by Generation Publications, “Global Duty Free and Travel Retail data 2008”.

In other words, 92% of duty free revenues go to the duty free companies and the airports, not the airlines, while the airlines' passengers are the central customers to the duty free and travel retail business. Does this huge unbalanced revenue stream now make sense in today's economic environment with IATA predicting that the airline industry will lose $11 Billion this year? At the same time, airports and duty free companies will largely be profitable in 2009!

From the mere 7% of duty free revenue that airlines receive, they assume the fuel costs to transport duty free goods around the globe. Not only is this a cost to the airlines, but it's also estimated that carrying duty-free goods in the air adds 2 million tons of C02 to the environment, according to UNEP’s “Kick the C02 Habit” climate-change campaign.

Whilst airlines are being forced to join Emissions Trading Schemes to reduce their environmental impact, they emit needless emissions through transporting tonnes of duty free goods for relatively little economic return to them! The ACI North America has grasped this trend and openly support Canada’s lobby for the change to arrivals duty free and Atlanta airport is inviting parties to join a group to research and advocate the same policy. Meanwhile the other regional divisions of ACI, especially in Europe where intra-EU duty free sales no longer exist, seem slow to embrace the idea.
Is the solution to have duty-free shopping in the air for pick-up at the destination airport? Could duty-free shopping even be done in advance via the airline website or onboard using seat back internet for pick-up at the arrival airport?

In-flight internet could change the whole market and increase revenue for airlines, as through the “walled gardens” now being installed on aircraft, airlines can now run onboard shopping channels and direct their customers to affiliate retailers on the ground so to achieve “virtual ancillary sales revenues”. Soon travellers will be able to sit on board and order, for immediate delivery at their destination, from the online shops of retailers like Bloomingdales, Marks & Spencer or El Corte Ingles.

How will the airports and their concessions react to this change? Since the Irish opened their shop in Shannon, the airports and their retailers on the ground have competed with their counterparts in the air, rather than working with them to achieve a greater penetration and spend from passengers.

Airports have become glamorous outbound shopping malls, whilst the airline business has fragmented into low-cost carriers and “legacy” airlines who want the fast, cheap transit of their passengers. With baggage becoming a major revenue source, outbound purchases will be driven into the hold to generate increased profits.

This is not good news for airport retail operations, as carriers will embrace revenues from the internet and cellfone use, so it won’t be long before Amazon, QVC or Ebay spot the opportunity to generate huge revenues from travellers fixed to a seat-back screen or laptop, for hours on end.

Suppliers at the Airline Information ARAC Conference confirmed that passengers were “much more tranquil” when in-flight internet was available. A SITA survey named onboard wifi as a major requirement from passengers and stated that online ancillary purchases such as hotels, insurance and retail sales will double in the next few years. 13% of those surveyed asked for a pre-departure duty free portal to speed their transit through an airport. All passengers wanted reduced airport “dwell times”.

Perhaps the airports should now work together with the airlines, so to increase sales in this new travel retail world in the sky, whilst giving the consumer what they really want.

UNEP wish to change Duty-Free?

Par exemple, des études montrent que si tous les passagers aériens voyageaient avec moins de 20 kg de bagages et qu'ils achetaient le reste de leurs articles dans une boutique hors-taxe, à leur arrivée, cela réduirait les émissions mondiales de gaz à effet de serre de deux millions de tonnes de dioxyde de carbone (CO2) chaque année.

For example studies indicate that if every airline passenger reduced to below 20Kg the weight of goods and items carried and bought what they needed on arrival at a duty-free lounge, this could cut global greenhouse gas emissions by two million tonnes of carbon dioxide (CO2) a year.

http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=538&ArticleID=5829&l=en

http://dutyfreeonarrival.com

http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=538&ArticleID=5829&l=fr

http://horstaxesarrivee.com