Brazil duty free change ‘will stimulate higher sales’

By Luke Barras-hill |

Bello-Horizonte-International-Airport

Belo Horizonte International Airport.

Brazilian airport stakeholders have applauded the Federal Government’s move to lift the duty free purchase threshold as a unique opportunity to broaden retail sales across different product categories.

The Ministry of Economy confirmed on Tuesday (15 October) in a decree that Brazilians returning from overseas travel would now be permitted to purchase up to US$1,000 worth of duty free goods (up from US$500) as of 1 January 2020.

President Jair M. Bolsonaro revealed the tweaked plan to the customs regime of Brazil’s duty free shops in ports and airports in a tweet last week.

‘OUTDATED PURCHASE QUOTA’

Reacting to the new, a spokesperson from RIOgaleão Tom Jobin International told TRBusiness: “RIOgaleão points out that the government-approved measure of doubling the limit for shopping at airport free shops to $1,000 is a great benefit to travellers who disembark from international trips.

“The $500 purchase quota was set in 1991 and does not match the reality of prices in the current scenario, taking into consideration inflationary re-adjustments in both Brazil and the United States.

“The authorisation mainly facilitates the acquisition of higher value products, such as electronics, home appliances, watches, sports equipment, premium drinks, among others.”

Dufry-Rio-T2-Arrivals

Dufry Terminal 2 arrivals shop at RIOgaleão Tom Jobin International Airport in Rio de Janeiro.

The airport says it considers the initiative to be a positive development for relations between Brazil’s airports and free shop operators, ‘who would have more opportunities to market their products and increase the mix of offers’.

“RIOgaleão believes that Rio de Janeiro passengers, who already have an excellent experience, will have even more benefits and reasons to choose Tom Jobim International Airport as their arrival point in Brazil,” it added.

MARKET POTENTIAL

Dufry, which operates at the likes of RIOgaleão and São Paulo-Guarulhos International among others is set to benefit from the changes to the regulation, but the travel retailer declined to comment when approached, merely stating it was ‘discussing the opportunity internally’.

As revealed by TRBusiness, the travel retail giant and its partner Hudson recently scooped concessions at Florianópolis International Airport’s new terminal.

Tobias Markert, CEO of Floripa Airport said: “Dufry has proven to be a professional partner that understands how to react to such [allowance] changes in an efficient manner.

“We, as a private airport operator, welcome all measures that make the Brazilian market more attractive. This specific change of increasing the allowance to US$1,000 will increase product diversity and make it possible for the duty free shops to sell more items such as smartphones and electronic devices as well as clothes and accessories from international brands. This opens a new market with great potential.”

DFA-Cogonhas-Airport

DFA runs shops at a number of Brazilian airports, including São Paulo-Congonhas (pictured).

Duty Free Americas (DFA) also operates at many of Brazil’s main airports, including São Paulo-Guarulhos International, Tancredo Neves-Confins in Belo Horizonte and Afonso Pena International in Curitiba.

DFA’s Dov Falic acknowledged the allowance raise as ‘very important’ for the travel retailer’s customers.

“Any time a country increases their duty free allowance it is a great win for the customer,” he told TRBusiness. “Duty free is always at the top of mind of the Brazilian shopper and this will help them plan ahead of their travels. We will keep trying to increase the selection and assortment for our customers. This also allows us to sell certain merchandise we weren’t allowed to sell before.”

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