During the last month, many top DF&TR retailers have stressed the importance of the tobacco category to TRBusiness and Dubai Duty Free and Aer Rianta International in particular.

Dubai Duty Free Executive Vice Chairman Colm McLoughlin is one retailer not afraid to go on the record on the subject and he thinks every airport should have quality smoking lounges.
“Come to Dubai now and we have very top placed smoking lounges and I think they should be there. Tobacco and cigarettes are still a big category as far as Dubai Duty Free is concerned, running at about 8-9% of our total business every year.

“There were discussions recently with the GCC health ministers in the region as part and parcel of the World Health Organization and they have arranged a six-month delay in any new rules that are here. We have absolutely no problem if the government decide upon health warnings. If they decide graphic health warnings, we will comply with whatever the instructions are. We think the tobacco category is sound – as far as we’re concerned – for the foreseeable future, but we will, of course, introduce whatever rules are made.”

For his part, Aer Rianta International CEO Jack MacGowan agrees with the importance of the tobacco category and he says it is very important that this business is actively managed and protected as much as possible.

 

MORE ACTION NEEDED

He said: “If you look at it commercially with the margin, the space it uses and the sales densities within that, it’s really very hard for us an industry to replace that.”

MacGowan says this is one of the negatives facing the business from Ireland to North America and also the Middle East and other parts of the world.

He says it is vital that this business is protected as much as possible and he unhesitatingly adds that this is a situation “that deserves more attention from industry leaders”.

So does he subscribe to the argument that a lot of customers coming into the shops for tobacco – who then buy additional items – simply wouldn’t come in otherwise?

“I think that’s absolutely the case and I’ve got evidence of that,” said MacGowan. “If those people are not buying tobacco in our shops in the future, we’re going to have to rethink our offer so that we have something to offer to drag them in.”

He added: “I would be also calling for the approach that Sarah Branquinho and the ETRC Group have followed in Europe. I think that’s been relatively successful and the same approach needs to be applied in the other regions of the world such as North America and the Middle East.”