ASUTIL’s Secretary General, and José Carlos Rosa, COO, Dufry DO Brasil are convinced that the duty free allowance for Brazilians shopping at the country’s land border stores will remain at $300 or even increase next July.

 

On the 21 July the Brazilian Government announced that it was planning to halve the duty free allowance for Brazilians shopping at the country’s land border stores. Just two days later, it announced that it would delay implementation for another year.

 

Speaking exclusively to TRBusiness, José Luis Donagaray, Secretary-General for ASUTIL(Asociación Sudamerica de Tiendas Libres) – the South American travel retail association – said that he was not worried: “Today there are no changes anyway. Next year they will discuss this matter all over again.

 

“Next year, because we will hear more about the permission of border stores on the Brazilian side of the border, Brazil will negotiate with Paraguay, Uruguay and Argentina on all of these things [including the allowance].

 

Donagaray gave TRBusiness an exclusive video interview at last year’s TFWA Cannes.

 

GOOD NEWS FOR BOTH SIDES

“I believe that next July, the allowance will stay at $300…Maybe it will even go up to $500, but it won’t go down to $150 for sure.”

 

Dufry Brasil’s Rosa told TRBusiness that he wholly echoed Donagaray’s sentiments. “I don’t see it happening because it will have a huge impact on the other side of the border.

 

“For you to have a good business on the Brazilian side does not mean the business on the other side has to be bad, you can generate good business on both sides of the border.

 

“I think that this postponement will give everyone time to discuss the matter and my personal belief is that that the allowance will stand as it is and will not go down and people are already discussing the possibility of bringing it up to $500.”

 

BRAZILIAN BORDER STORES NEXT ON DUFRY’S AGENDA

In March, Rosa told TRBusiness that Dufry Brazil continues to wait on legislation clarification of Law, 12.723 before it can open stores at the Brazilian border, but that he was confident that it will happen.

 

The finer details of Law, 12.723 – which was approved in October 2012 by Congress to allow for the construction of duty free shops in Brazilian cities on the border – are still under discussion by the authorities in Brazil. The only part of the law, which has been confirmed is that each of the 26 municipalities in Brazil must change its own state legislation to make duty free stores possible in that region.

 

Rosa said that ‘Brazilian bureaucracy’ could mean that issues could take some time to resolve. “All of the procedures have to be defined by the Secretary of Customs.

 

“All we know is that some time in the future, border stores will be created this side of the border, but it’s not yet defined. Will they be allowed to sell only to foreigners? Will they be allowed to sell to Brazilians coming back into their country? What will be the limits or allowances? What will be the model – will it be one store per border or one, let’s say, free zone per border? Nothing is defined, so, yes we believe there will be border stores in Brazil, yes we do, but we don’t know when or how.”