ASUTIL: Brazilian border DF stores set for March opening

By Andrew Pentol |

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ASUTIL Secretary General José Luis Donagaray.

Brazilian border duty free stores could be operational by March 2019, according to ASUTIL Secretary General José Luis Donagaray.

Speaking during the first ASUTIL webinar, which took place last week, Donagaray said The Department of Federal Revenue of Brazil (Receita Federal) had confirmed the required software to operate Brazilian border duty free stores would be ready by the end of the month.

Interested parties can then apply to operate stores in any of Brazil’s 32 twin cities bordering the likes of Colombia, Venezuela, Argentina, Paraguay, Bolivia and Peru.

As reported, ASUTIL President and Dufry General Manager Brazil and Bolivia Gustavo Fagundes revealed during this year’s inaugural Summit of the Americas that legislation was finally approved  to open land border duty free stores in Brazil. The followed the submission of a draft bill back in 2012.

BORDER BREAKTHROUGH

Reacting to the the significant border-related breakthrough revealed in Orlando, Dufry Group CEO Julián Díaz (see below) told TRBusiness Deputy Editor Luke Barras-Hill during the event: “There is great value to deliver. Dufry is involved and one of the priorities in the country is to participate in the market.

“We need to understand the customer’s behaviour and motivation in going places [where you can go] without any restriction.”

Shedding further light on the Brazilian border situation, Donagaray said he did not know how long applications would take and that there were suggestions the first stores could open by the end of the year. He said: “This might mean some of the smaller stores, but the bigger outlets, operated by the larger retailers in places such as Foz de Iguacu, Rivera and Ciudad del Este will not begin trading before March 2019.”

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Interested parties can apply to operate stores in any of Brazil’s 32 twin cities once the required software to operate these outlets is released at the end of the month.

Donagaray, who revealed a guarantee of R$2m ($480,045) is required to submit an application, said stores could be transformed from domestic outlets to duty free shops. “We are not sure how many companies will apply. It is not so easy to operate on the border as there are financial and logistical elements to consider.”

On latest more general developments in Lain American countries such as Brazil, Argentina and Uruguay, he added: “In Brazil, elections are taking place and we will know more what is happening in the coming weeks. In Argentina, where duty free sales have dropped -25% in the past two months, there is no political uncertainty, but economic concern instead.

“Although figures are starting to improve, we still expect reduced growth and employment come the end of the year. The recovery is expected to start at the beginning of February next year.”

Another issue discussed during the webinar was the mobilisation of the industry amid the threat of the World Health Organisation’s Illicit Trade Protocol.

“We are working hard to try and involve customs offices and finance ministers in the various countries while working with operators and tobacco companies. This is a big issue and only the first step,” he acknowledged.

Dufry Group CEO Julián Díaz

Dufry Group CEO Julián Díaz.

NEXT YEAR’S SUMMIT

Looking ahead to next year’s Summit of the Americas, Donagaray remarked: “We recently held a meeting in Miami attended by 30 or 40 suppliers which reacted well to the new layout. They were also pleased to hear new measures are being taken to stop those who haven’t paid from coming inside. This year, people must be registered in order to enter.”

In addition, the conference sessions on Monday, Tuesday and Wednesday will last 1.5 hours instead of 2 hours. He said: “We will have panels focusing on airports, inflight, technology and the key product categories. There will also be a presentation from the CEO of one of the main operators.”

Regarding other summit-related issues, he added: “The new hotel is very good and has many nearby attractions. The social activities on the Monday and Tuesday nights will also change and the evenings will be more informal.”

Finally, Donagaray referred to the re-launched ASUTIL website, which has more information about the region including studies from Swiss company m1nd-set. It also features exclusive information for ASUTIL members.

 

 

 

 

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