MEADFA provides updates on supply chain and regulatory challenges

By Charlotte Turner |

In excess of 220 participants, with good representation from African companies, attended MEADFA’s ‘The Future of Travel Retail Supply Chain’ webinar yesterday, which featured presentations and insights from Anna Marchesini, Head of Business Development, m1nd-set; Roger Jackson, MD Organico Solutions and MEADFA – Board Member & Chair of Liquor Group along with Richard Gray, CEO ARIME, MEADFA board member & Chair of Advocacy Committee, Threats and Opportunities.

 

The session was expertly moderated by John Hume, Managing Partner of Hume Brophy.

 

Sherif Toulan, MEADFA President, initiated the webinar by extending his thoughts and prayers to those victims of the Russia/Ukraine conflict. “We will all be impacted,” he said.

 

While acknowledging the popularity of the webinar format, he did insist that nothing can truly replace physical events and platforms and highlighted the success of MEADFA’s physical conference event which took place in Dubai at the end of last year.

 

“I am very pleased to say that MEADFA’s determined efforts in the last few years whether in terms of advocacy or networking, have resulted in a growing number of members, reaching to a total of 61 to date, welcoming seven new members since the beginning of this year.”

 

NEW SUSTAINABILITY COMMITTEE ON THE HORIZON

In 2019 MEADFA created an advocacy committee that is chaired by fellow board member, Richard Gray. In order to better serve MEADFA members, the association has also created a membership committee led by fellow board member, Roger Jackson. “Now we are in the process of forming a sustainability committee under the leadership of fellow board member, Mohamed Munif,” added Toulan.

Anna Marchesini, Head of Business Development, m1nd-set, provided an overview of the traffic developments in the Middle East & Africa

Anna Marchesini, Head of Business Development, m1nd-set, provided an overview of the traffic developments in the Middle East & Africa

 

“Creating a research and events committee is our near-future project. It is our firm belief that MEADFA should develop regional and industry-specific reports which will be extremely useful to MEADFA Members.”

 

Following Toulan’s address, Anna Marchesini, Head of Business Development, m1nd-set, provided an overview of the traffic developments in the Middle East & Africa, powered by its data partner IATA. According to m1nd-set, international departures from the Middle East region are expected to reach 98% of pre-pandemic volume by 2024. For Africa, m1nd-set and IATA expect this figure to be slightly lower at 93%.

 

“The footfall in Middle East & Africa, which has been stable throughout the 2017-2020 period, continued the same trend also in 2021,” highlighted Marchesini.

 

 

PURCHASE RATE, FOOTFALL AND CONVERSION RATES

However, she revealed that the percentage of buyers (out of total travellers in Middle East & Africa in 2021) decreased compared to what was observed in the years before covid and the most recent conversion values in Middle East & Africa are also below the average of 2017-2020, mostly driven by the first half of 2021.

 

Jackson, Managing Director of Organico Solutions and MEADFA Board member, moved the conversation forward with his presentation on the problems facing the supply chain and how these should be addressed.

 

“Forecasting is becoming really difficult,” he said and proposed that the relationship between supply chain and EPOS was out of rhythm. He also said he believes that more locations need to adopt automated retail services, such as walk-out technology, whilst revealing an alarming number of those working in supply chain (44%) plan to leave their roles due to fatigue. “They are considering career changes,” he said before warning that this could create further erosion of expertise in the sector. “We don’t want a large exodus due to fatigue.”

 

‘AUTHENTIC FULFILLMENT OF ESG COMMITMENTS’

Later on he addressed a question from one of the participants about a reluctance from retailers to adopt innovative brands and products during a time of great uncertainty. He said that with no accurate base line for sales at the moment, he is not surprised by this reaction. “We have to look at the last 5-6 years of data, so we can really understand what’s happening with sales.”

 

Roger Jackson spoke about the contributing factors to today's supply chain challenges as well as the impacts to the travel retail industry.

Roger Jackson spoke about the contributing factors to today’s supply chain challenges as well as the impacts of those to the travel retail industry.

 

He warned about the pitfalls of making long-term targets at this point and said that the industry needs to move away from blaming Covid for inefficiencies and lack of stock on shelf.

 

As he concluded his presentation he also said that all companies should be focused on ‘authentic fulfilment of ESG commitments’.

 

TRACK & TRACE: EDUCATION IS KEY, SAYS RICHARD GRAY

Richard Gray, the driving force behind MEADFA’s advocacy committee, provided an update on the duty free landscape for the Middle East region. “We are seeing a complete mix at the moment. We’re seeing some high-end products being sold in high volume, but we’re also seeing a return of a different type of consumer.

 

“We’re seeing some families starting to travel again. We’re seeing people who are concerned about their wealth and income. Where people were looking to self-treat, they are now re-evaluating the cost of getting on a plane, household bills, cost of living etc.”

 

Richard Gray, the driving force behind MEADFA's advocacy committee, provided an update on the duty free landscape for the Middle East region.

Richard Gray, the driving force behind MEADFA’s advocacy committee, provided an update on the duty free landscape for the Middle East region.

On advocacy, he said that his main focus was trying to determine just how much people understood about the different legislation that is being forced on the business, with track and trace threatening to ‘ostracise’ the travel retail industry in particular. He identified that some were intent on giving the industry a ‘pretty bad name in terms of what we sell and how we sell it’.

 

“We are great believers in track and trace because it will stop smuggling and counterfeit goods,” he added. “But our stock is so very well controlled…It’s not just about the cost of a sticker, it’s the cost of a sticker for the sake of just 1% of a company’s trade…On this particular issue we need to be very united.”

 

INCREASED SALES DEMAND FOR DF EXCLUSIVES

Sherif Toulan appeared on the cover of the TRBusiness November ezine last year.

Sherif Toulan appeared on the cover of the TRBusiness November ezine last year.

He called for a collective effort from all members to help MEADFA educate governments about the damage track and trace could do to the travel retail business. “It’s about protecting our industry as a whole,” he added.

 

“We need to get in front of ministers who make the decisions…It’s about proving that we’re not the issue here and having an open book [policy]…we’re selling tobacco in a very controlled environment.”

 

Speaking after the event, MEADFA President, Toulan said: “I am delighted with the turnout we had for this first webinar for 2022. The success of the various MEADFA events has shown that our industry is keen to regain its strong performance and profitability.

 

“It clearly demonstrates the interest and importance the travel retail sector has in the context of the recovery from the global Covid‐19 pandemic. As we build back from the pandemic, we have seen consistent growth of international passengers in the region throughout 2021, to slowly approach Q1 2020 levels.

 

“This has been seen in key countries such as UAE, Qatar, Saudi Arabia, Egypt and Morocco.

 

“Indeed, so far this year we have seen a sharp increase of duty free exclusive purchases amongst international travellers across the Middle East & Africa, up 59%. Today’s webinar served to reinforce the enthusiasm in our industry as we continue to recovery throughout 2022.”

 

 

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