MIDDLE EAST: IRAQ DUTY FREE
Plenty to look forward to for Iraq Duty Free after ‘positive year’
Having opened its new arrivals shop at Baghdad International Airport earlier this year, Iraq Duty Free is pressing ahead with its departure store renovations, as Andrew Pentol discovers.
2018 sales target of $9m. Last year we generated $7m.” He adds: “Alcohol is sold freely
in Iraq, but customers like to have a trusted source to obtain it from. They know Iraq Duty Free has partnerships with key international liquor suppliers and that all products are 100% authentic. This is why sales have increased.” The absence of a sales quota on
liquor sales is a significant advantage for IDF, according to Jabbour. “Customers can buy four bottles of liquor, for example and a case of beer or wine and still not be questioned. This also helps increase sales.”
Above: Ministry of Transport Administrative Agent, Ahmed Karim Abdel Ayoub at the opening of the Baghdad arrivals shop earlier this year.
F
or Iraq Duty Free (IDF), which operates arrivals and departures shops at Baghdad, Basra and
Sulaymaniyah International Airports, 2017 was a positive year with a double-digit turnover increase. In 2017, preliminary duty and tax
free sales in the Middle East rose +5.9% to $5.9bn (Source: Generation Research), with IDF contributing alongside the likes of Dubai Duty Free, Qatar Duty Free and Bahrain Duty Free. Last year, a +7% surge in global
tourism arrivals to $1.32bn (Source: UNWTO) was driven by increases in Africa (+8%), Asia Pacific (+6%), the Middle East (+5%) and the Americas (+3%). But according to IDF General Manager Fouad A Jabbour, the company is not really affected by tourism.
“Sales from Iraqi passengers will always either be around the same level or sometimes a little higher.”
Fouad A Jabbour, General Manager, Iraq Duty Free
84 TRBUSINESS
He tells TRBusiness: “In general, Iraqi travellers are always going away on business or travelling for a few days on vacation. “Sales from Iraqi passengers will
always either be around the same level or sometimes a little higher thanks to new offers and products.” This year started with the opening
of the new 135sq m arrivals shop in the Iraqi Airways Nineveh Terminal at Baghdad Airport. The previous 95sq m arrivals
shop, which was not big enough to accommodate all required product categories, closed at the end of December 2017. This forced IDF to manage with its best-sellers until the opening of the expanded store in March. Key to IDF’s recent success has
been the re-introduction of the liquor category in February after a 13-year absence. The category is now available in-store following government approval. The impact was instant with the
category driving a year-to-date sales increase of around 25%. Jabbour says: “The re-introduction
of alcohol makes a massive difference and we are confident of reaching our
Contract extends to 2029 Currently operating two departures and two arrivals shops in Baghdad as well as one arrivals and one departures store in Sulaymaniyah, Financial Links (operating as IDF in the duty free arena) first signed a contract with the Iraqi Civil Aviation Authority and Iraqi Ministry of Transportation to run all Iraqi airport duty free shops in 2004. The agreement was due to
expire in 2019, but was recently extended until 2029. Under the terms of the contract, the Iraqi Civil Aviation Authority and Ministry of Transportation receive 10% of annual sales. This percentage is not linked to a minimum turnover. As previously mentioned, IDF also
assists with wider airport renovations in order to help them reduce costs. Since the opening of the new
arrivals shop in the Iraqi Airways terminal in Baghdad work has started on the renovation of the existing 508sq m departures shop which will remain the same size. Jabbour comments: “We
have recently closed the Nineveh terminal departures store and opened a temporary location so sales can continue.
OCTOBER 2018
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