The New Zealand Government is reducing its duty free allowance from 200 to 50 cigarettes from November 1 this year.

 

This follows TRBusiness’ expansive coverage yesterday of Associate Health Minister Tariana Turia’s description of duty free tobacco as ‘an anomaly’, alongside the strong hint she is working towards its total removal in the channel by 2025 [Click here: http://www.trbusiness.com/index.php/regional/asia/15204-new-zealands-turia-smoke-free-oceania-by-2025.html]

 

This morning, Auckland Airport has acknowledged the government’s decision to follow Australia’s example set back in 2012. Auckland Airport’s General Manager Retail and Commercial said: “Auckland Airport will play its part in working with Government to inform travellers of the proposed change to the duty free allowance well before 1 November. It is important to the maintenance of New Zealand’s reputation as a tourism destination that this is done well.”

 

Auckland Airport estimates that the potential full year impact of reducing the duty-free allowance from 200 cigarettes to 50 cigarettes could reduce the company’s revenue by approximately $7 million to $8 million.”

 

Of course, this is only an estimate and it seems highly likely that customer penetration levels in Auckland’s two competing operations of DFS Group and JR/Duty Free will fall once tobacco allowances are reduced later this year. The will obviously impact on other merchandise – particularly impulse purchases – with fewer customers in the stores to make them. This is also likely to be an issue for LSTR which operates airport duty free shops in New Zealand.

 

TOP IMAGE: Auckland International Airport.