Rio Grande do Sul MP Frederico Antunes says Brazilians will have a monthly $300 allowance when Brazilian border shops open from June 2015.

 

This was the single most important message for border shop retailers, suppliers and government officials, as nearly 100 met for the second time at the Hotel Rivera Casino & Resort in the Uruguayan border town.

 

The wider meeting also later addressed the current situation facing border shop operators in the six Uruguayan cities where duty free sales are permitted, under the umbrella slogan: “Facing up to New Challenges”.

 

Potentially the most important news of the meeting was delivered by Frederico Antunes, a regional MP from Rio Grande do Sul in Southern Brazil in the last morning presentation. Antunes advised delegates that the rules on the operation of Free Shops in Brazilian territory are now almost finalized.

 

He added that the expectation now is that new border stores on the Brazilian sides of its borders will be able to trade by the end of June 2015 – subject to Brazilian nationals being restricted to a monthly $300 dollar per month, per person allowance.

 

Apparently, this will be controlled by a special software programme linking the stores to a database controlled by La Receita Federal, the Brazilian Customs Authority. Antunes also advised the meeting that shop operators will be able to manage stores in more than one border location.

 

The meeting organized jointly by the South American Duty Free Shops Association (ASUTIL) and the Uruguayan Chamber of Free Shops  (CEFSU) had earlier heard from José Luis Donagaray, Secretary-General of ASUTIL and Carlos Loaiza his opposite number at CEFSU, after the event was officially opened by Rivera Mayor Marne Osorio.

 

REGIONAL ECONOMIC OUTLOOK

The first presentations looked at the regional economy and the outlook for the year ahead, with ASUTIL’s regular and popular economist/speaker Carlos Melconian.

 

He described a complex situation facing Argentina, while Brazilian economist Alberto Furuguem informed the delegates of the choices facing Dilma Rousseff as she prepares to begin her second term as President of Brazil.

 

Economist Magdalena Domínguez then closed the economic analysis with a look at the options facing Uruguay, with the country fighting inflation as its two powerful neighbours try to avoid the problems of low GDP growth and an uncertain international outlook.

 

Clara Pérez from travel retail market research specialist m1nd-set kicked off the afternoon session with an in-depth look at purchasing behavior in the different duty free stores in the area, placing special emphasis on border stores and ferries as opposed to airports.

 

The afternoon continued with a series of presentations showing the new business model that is beginning to emerge in several border towns on the Uruguayan side of the border with Brazil, where shopping malls and complexes have both duty free and duty paid stores coexisting side by side – along with food courts and entertainment options aimed at families.

 

Mario Garbarino of Garbarino Lombardo, talked about the Río Branco Shopping and hotel complex where DFA Uruguay is planning to open a 4,000sq m anchor store, while Víctor Hugo Bonnet, Vice President of London Supply presented details of the recently completed extension of the company’s flagship store in Puerto Iguazú in Argentina, which now measures just over 9,000sq m.

 

By contrast, Claudio Marchesano and Santiago de Tezanos of the Melancía Mall gave details of construction progress at the latest shopping complex in Rivera, where both Neutral and Grupo Wisa are due to open 4,000sq m stores around June 2015.

 

London Supply’s Iguazu flagship store has just undergone major expansion.

 

NEW STORE DEVELOPMENTS

This section on new developments was then closed by Rafael Parodi of Siñeriz Shopping who shared details of the history of one of the oldest companies in the town; he also announced plans to add 6,000sq m of retail space to the company’s 10,000sq m flagship store, along with an enlarged food court with a wide variety of gastronomic options.

 

The conference closed with Enrique Canon, Director of the Uruguayan Customs Authority pointing to the important control function carried out by the Customs Authorities ensuring that the operations of the border shop operators throughout Uruguay comply with current legislation.

 

Canon was joined by Enrique Urioste, CEO of Neutral, President of ASUTIL and Board member of the management Commission at CEFSU. Urioste stressed that both ASUTIL and CEFSU were determined to ensure that the genuine retail business existing in Uruguay remains a winning formula for all industry players.

 

Commenting on the growing success of this conference event, ASUTIL Secretary-General José Luis Donagaray said: “This year we had almost 100 delegates at the conference, an increase of 15% on last year. The first impressions are very positive – the agenda was very full.

 

“In the morning we heard from three important economists and they left us with a good idea of what could happen for the rest of the year and what lies ahead in 2015. In the afternoon we have been able to see that several operators are committed to new developments and we will see new and bigger stores opening next year.”

 

Carlos Loaiza of CEFSU added, “The success of the event is a clear sign of the interest of our members and the suppliers to increase their knowledge of the economies of Uruguay and our neighbours in Brazil and Argentina and how this will affect our business over the coming months.

 

“We have all learned something today and the owners of the free shops on the border will continue to face the challenges of the current situation in a very determined fashion. The leading operators are holding firm to their expansion plans and are still optimistic in spite of the new challenges that they will be facing.

 

“Our Association is convinced that we will be able to ensure that the governments of Uruguay and Brazil will look at a full agenda to ensure that the new legislation affecting Free Shops in Brazilian territory, will be drawn up to ensure competitive terms with the existing businesses that have been operating for many years in Uruguay.”

 

LAST, BUT NOT LEAST…

Last Tuesday night’s welcome dinner was organized by Siñeriz Shopping and sponsored by the leading free shop operators in Rivera, including Siñeriz, Neutral, Grupo Wisa, Duty Free Americas and The Place.

 

[A generous $3,850 donation from the fees paid by delegates at this year’s conference was made to the Caqueiro Social Project, a non-governmental organization that looks after the recreational and educational needs of young people living in the Caqueiro district of Rivera– Ed].