Evidence of the negative effect of the slashing of the Australian duty free allowance at the tail end of 2012 has come to light from research undertaken by DKMA.

 

Data from the Switzerland-based airport market analyst, focused on international traffic to Australia, show that passenger behaviour has changed significantly on these routes.

 

Across all nationalities travelling to Australia, DKMA found that, following the introduction of the reduced allowance [from 250 to 50 cigarettes], the percentage of passengers purchasing tobacco plunged from 37% to just 12% and that the average duty free spend of passengers travelling to Australia fell by -35%. For those passengers who did buy tobacco, their average spend dropped even more… by -43%.

 

Director at DKMA, James Ingram (left), tells TRBusiness: “Our data is based on traffic from a series of hub airports, mostly in the Gulf and India, and they show the swift reactions of passengers to the allowance change.”

 

OTHER CATEGORIES AFFECTED

Other categories have also been affected as purchasing patterns altered. The proportion of passengers buying alcohol and fragrances fell too. DKMA says: “Passengers who purchased cigarettes were fairly likely to purchase alcohol as well so by losing them, the shops are also losing out on (overall) duty free sales.”

 

The only positive from the study was that for Australian passengers travelling outside the country (i.e. not returning home) there was no noticeable change in behaviour.

 

[To read a full market analysis of the tobacco category see the February issue of TRBusiness.]