The Central and Eastern European Travel Retail Association’s (CEETRA) Travel Retail Forum in Warsaw addressed a number of regulatory issues, while data from m1nd-set showed a strong proportion of impulse buying in the channel.

The event took place at Warsaw Chopin Airport on 26 October. Topics discussed included illicit trade, sustainability, and how geographical indications (GIs) can boost retail. 

In his welcome address, CEETRA Chairman Andrzej Milaszewicz emphasised the organisation’s mission to provide a platform for brands, airports and retailers to connect.

Milaszewicz also detailed how the organisation had engaged with policymakers in the region.

Passenger recovery, he said, was exceeding pre-Covid levels in some airports. Yet he outlined the changing backdrop for the industry in the region. 

CEETRA: Impulse buying key

Clara Susset, Chief Operating Officer at research agency m1nd-set, then shared insights into passenger behaviour in the region.

Across the central and eastern European region, 64% of shoppers were identified as impulse buyers, compared to 57% globally.

Data from m1nd-set also showed that 60% of shopping purchases were impacted by interactions with sales staff. Despite this, only 33% of those in duty free stores made contact. 

Susset described increasing the current interaction levels as having “huge potential” to impact conversion. 

She continued: “43% of duty free purchases here are made for the purpose of gifting; this is radically different from what we observe globally”. 

Immediately following the pandemic, shippers were purchasing more for their own consumption, but this was only a temporary trend, she observed. 

Chopin Airport insights

Witold Janiszewski, board member at airport operator Polskie Porty Lotnicze, then gave details of developments at Warsaw Airport.

The operator is about to launch a valet car service, the first in the region, which will allow cars to be parked for passengers and picked up for them on their return. 

He said traffic was recovering at Warsaw and other airports, partly because many people with Ukrainian and Belorussian nationalities were choosing to fly from Poland.

In total, 49% of passengers through the airport bought products, with 38% consuming F&B.

He did however state that despite the growth at the airport, the 11,200 sqm retail space was unlikely to be expanded. 

“We have to manage between the comfort of passengers and the space for retail,” Janiszewski said. 

Regulatory challenges

Illicit trade expert Nick Hodsman took to the floor to report on the economics of tobacco products in duty free. 

He said the industry accounted for 50,000 jobs directly and indirectly across Europe. 

Hodsman also said that he believed the duty free industry was the most secure retail channel in the world. Less than 0.1% of illicit trade is linked to the channel. 

“Tobacco producers have to ship to bonded warehouses, and are under licence,” he explained. 

“The retailers are under licence, too, and need to report on any products which they can’t prove to have legally left their stores.” 

He added: “Tell me about any other industry, where to purchase the product you have to present your boarding pass.”

Despite this, the industry is under threat from illicit trade. “Counterfeit products may be labelled duty free, and consumers are led to believe that they are duty free,” he detailed. 

The Duty Free World Council (DFWC) has a campaign dedicated to tackling illicit trade called Trusted, Transparent, Secure. 

Sustainability spotlight

European Travel Retail Confederation (ETRC) Policy and Communications Director Nicole Regecová then summarised the recent Mapping and Impact Analysis of EU Sustainability report.

It examines impact, addresses risk and opportunities, and includes recommendations for high-level strategy when it comes to sustainability.

An example Regecová shared was the European Commission’s proposal for a Green Claim directive. It has been designed to bring clarity to voluntary environmental claims and labelling schemes. 

She also added that European-level sustainability priorities may shift in the coming years given upcoming elections in many countries. 

Geographical Indication opportunities

Global Polish Vodka Ambassador Maciej Starosolski presented the importance of GI products across the whole value chain. 

As an example, he cited the ‘Polish vodka’ label which, since 2013, has required the spirit category to be produced locally. Other examples include Scotch whisky and Tequila. 

GIs provide an additional level of protection for the producers. There were 215 distilleries in Poland 30 years ago, but only 50 are left today.

Starosolski said that many of those would not have survived if it were not for GI regulations. 

Finally, Monika Borys, Global Brand Manager at Dr Irena Eris, shared details of the luxury brand’s strategy.

Founded by the pharmacist and researcher of the same name and now exported to 40 countries, she stressed the importance of duty free. 

Advice gave advice for brands looking to enter the channel: “Be strong in your local market, be present in other international markets, and then target duty free in that market.”

At CEETRA’s April 2023 Forum, Milaszewicz reminded delegates of the organisation’s role to “bring together all local ecosystems, not only airports, airlines or operators, but also brands, producers and tourism”.