BRAZIL
Brazil’s border store wait continues; allowance rise stays on the agenda
A recent meeting of key South American duty free stakeholders convened by the National Union of State Legislators (UNALE) in the presence of Receita Federal (Brazil’s federal revenue and customs service) laid out guidelines for the regulation of the long-awaited land border shops on the Brazil side, as Luke Barras-Hill reports.
U
Above: José Luis Donagaray, ASUTIl Secretary- General.
nder the proposed
guidelines, laws of which were approved in 2012,
border stores can be established in any of the 32 border twin cities (see map), in either special areas or determined by each city. Currently, Brazilians can purchase
up to $300 per month without having to prove they travelled, nor are they obliged to buy all items in one place or on the same day. A 50% tariff will apply to imported products exceeding $300 (although there are limitations on quantities for alcohol and tobacco). Importantly, Brazilians will still be
able to take advantage of a $300 allowance to purchase in duty free shops in neighbouring countries, although the document states Receita’s intention to reduce this threshold to $150 unless a global Mercosur agreement is struck. In any case, the wait to see
new stores goes on. José Luis Donagaray, Secretary-General, ASUTIL tells TRBusiness that such a scenario is likely to occur by the end of the year. Seperately, the prospect of
Brazil raising its arrivals duty free allowance for citiziens in a similar move to Uruguay and more recently Argentina – which raised its threshold from $300 to $500 earlier this year – is something the association is working on, with Donagaray hoping that a move could be achieved this semester. Invariably, this would deliver a sizeable boost similar to the success experienced in Argentina and Uruguay. “Of course, when you have an
increase [in allowance] you see a lot of promotions and cross-selling, which is very good,” Donagaray adds, confirming the success to-date of the neighbouring countries’ policies.
The wait to see new stores on Brazil’s land border goes on. José Luis Donagaray, Secretary-General, ASUTIL, says such as scenario is likely to occur by the end of the year.
TRBusiness 28 TRBUSINESS
Healthy 2018 growth After the headwinds experienced in 2016, signs of a Latin American recovery, notably in Brazil, were more pronounced in the last quarter. While unable to share exact
figures, Donagaray confirmed growth for full-year 2017 mirrored the +30% rise reported in Q1 2017. “The economy recovered at the
end of 2016, which was a very hard year, and continues to do so,” he comments. “We’ve had a lot of
tourists and business is doing well – much better than in 2016, but not better than 2013/14. For 2018, we can see growth of around +20% versus 2017.” Dogged exchange rate volatility
seen in the US and Americas continues to challenge global travel retail, but macro-economic and fiscal development in countries such as Brazil – which has dragged itself into post-recession recovery mode – harbours brighter hopes for the region. “No one knows what will happen
to the currencies,” Donagaray notes, but qualifies: “We are not expecting to have any surprises.” The debut Summit of the Americas
has garnered much attention since IAADFS and ASUTIL announced last year the decision to co-locate their respective events in a single show. In a move that echoes industry sentiments related to costs, efficiency and value, both associations have been working extremely hard to bring together a programme that reflects the business in the Americas. Delegates will be eager to assess how the show’s new format will play out, before it heads ‘downtown’ in 2019 to a location yet to be disclosed. At the time TRBusiness went to press, not a great deal of detail on the 2019 venue was known, other than the fact it will be a large facility similar to the Marriott, with huge advantages in its proximity to shops, restaurants and other amenities. “We are happy – next year, with a
new venue, we will be even happier,” concludes Donagaray. “The improvement has to be
continuous every year to adapt to the needs of the customers and what is happening in the world.” «
MARCH 2018
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