The Asociación Sudamericana de Tiendas Libres (ASUTIL) and co-organiser Chamber of Uruguayan Free Shop Operators (CEFSU) are to run a second Latin American border store conference next year following the success of the inaugural event (Primer Encuentro de Border Duty Free Shops de América Latina, La Frontera Hoy) at the Sheraton Porto Alegre Hotel in Brazil earlier this month.

Around 170 delegates took part in the two-day conference with the aim of unboxing the Brazilian duty free land border shops business.

“This was a very simple event, but people were very satisfied,” José Luis Donagaray, Secretary General, ASUTIL commented in a recent webinar hosted by the association. “This is a tailor-made event for the smaller family-owned companies.”

Donagaray, who thanked the ASUTIL team for developing the conference in just 2 months said: “We don’t have the date and venue for next year’s conference, but it will not take place in Porto Alegre. Early November was chosen for the inaugural conference as it was the only time available due to the elections in Uruguay (27 October and 24 November), start of the summer season in Uruguay, elections in Argentina (11 August and 27 October) TFWA Cannes Exhibition (29 September to 4 October) and Christmas period. Maybe we can do it next June in somewhere like Rio, São Paulo or Montevideo.”

PRODUCT INFORMATION

The conference itself is aimed at a different type of customer, emphasised Donagaray. “It was very successful because delegates received a lot of information about the products available in the Brazilian border stores.”

“Gustavo Fagundes, General Manager, Brazil and Bolivia, Dufry Group also spoke of the need to modify and improve certain aspects of the law pertaining to the Brazilian border shops.”

In the aftermath of the event, Donagaray promised to contact the relevant authorities to address cost issues around monitoring the usage of Brazilian land border duty free allowances. As of 1 January 2020, the Brazilian land border duty free allowance will rise from $300 to $500, according to a Ministry of Economy document seen by TRBusiness on the Brazilian government’s website.

Brazilians returning from overseas travel will also be entitled to purchase duty free goods at airports to the value of $1,000 after the allowance was raised from $500, also effective 1 January 2020.

“There is a service in Brazil called Serpro, the country’s federal data processing service which helps determine whether shoppers have used their $300 land border duty free allowance. On each transaction, there is a consultation to a database for a fixed rate. The database shows how much people purchased and how much more they can buy.

“The consultations, however are very expensive, which is why we believe the system requires further analysis.”

In terms of content, delegates learnt that a further seven Brazilian border duty free stores will open by the end of the year, taking the total tally to 13.

According to a presentation slide showed to participants in the webinar, three stores will open in the South Brazilian state of Rio Grande Do Sul, which has around 12 million inhabitants — four times the amount of Uruguay.

One is located in Uruguaiana and will be operated by Duty Free Americas, while the other two will be run by Free Shop Mauá and Brasil Free Shop in Porto Mauá and Quarai respectively.

A further two outlets will be located in the Paraná state, home of the Iguaçu Falls. Foz Do Iguaçu will be the exact location for both stores, which will be operated by Duty Free Americas and Sky Duty Free.

The final two outlets due to open in the near future will be in Guajará-Mirim, a municipality in the Brazilian state of Rondônia and Bonfim in Roraima, Brazil’s northernmost state. The Guajará-Mirim shop will be operated by Top Internacional and the Bonfim outlet by Sem nome.

As reported, Dufry Group finally opened its first Brazilian border duty free shop in Uruguaiana on 22 August 2019. This followed the approval of the required regulation to operate land border duty free stores in any of Brazil’s 32 cities bordering variously with Argentina, Paraguay, Peru, Colombia, Bolivia, French Guiana, Uruguay, Guyana, Venezuela and Suriname.

Donagaray said: “The first cities opening border stores are the ones with the most people. The big players will open in the big cities. After, the family owned-businesses will open stores in the cities they live. This is how the Brazilian border business will develop.”

KEY CONFERENCE LEARNINGS

Further reflecting on the key learnings from the conference, he believes suppliers will have a clearer idea in terms of how to ‘work well’ in Brazil.

Presentations from Diego Lico, President, Chamber of Free Zones of Uruguay — who explained that the distance from Uruguay to the border is nearer than the distance to the border from São Paulo or Rio —  and Luis Fernando Lorenzi, Auditor-Fiscal/Superintendent, Receita Federal also added value. Maria Villanueva, Senior Consultant, m1nd-set also presented a study outlining the buying habits of consumers on the Brazilian border.

“Buying habits on the border are not too similar to those in airports but there are some similarities,” Donagaray concluded.

Looking ahead, TRBusiness and Duty Free Innovation, founders of the Travel Retail Sustainability Forum (TRSF), have partnered with ASUTIL and IAADFS, to host the Forum’s first official meeting during the Summit of the Americas in Orlando next year.

The meeting, which has been organised with the support of the Summit of the Americas’ host associations, will take place on Monday afternoon, 30 March from 16.30 – 18.00 at the Summit hotel venue, before the Summit’s Opening Cocktail.