COMMENT Not a case of expect the unexpected
Now and Then... T
RBusiness has published its 23rd edition of the
flagship October edition, complemented of course by the inimitable Top 10 International Operators report. Essential reading in an otherwise forgetful
year. While the emergence of Covid-19 means 2020 can be resolutely consigned to the annals of history, this horrendous year has at least demonstrated that the human race is resilient and capable of change, be it adapting to a dynamic home working routine, starting new business ventures or making philanthropic gestures, big or small. International travel and tourism has been
one of the major casualties of the virus, and with mass population immunisation a way off, it will be a protracted and painful route back for travel retail. Here in the UK, the sterling work carried
out by the country’s airports since the summer (when restrictions on non-essential retail were lifted) to jumpstart commercial businesses received a jarring hit from government in September. The much-anticipated confirmation that
duty free liquor and tobacco sales for EU- bound travellers from the UK was violently punctured by a government decision that poses grave ramifications for non-excise duty goods. Responses in a HM Treasury and HM Revenue and Customs consultation launched in March revealed that airside tax free sales at UK airports (excluding liquor and tobacco) will end in January 2021 [see p22 for more]. DF&TR associations, together with other
air transport stakeholders, have voiced strenuous opposition to a move that could cost thousands of jobs, put livelihoods at risk and sever a crucial artery of commercial income, which contributes an important share of non-aeronautical revenues to so many airport operators. Aside the fiscal impact, the symbolic
tremors could leave deeper scars, with foreign visitors potentially turning their backs on UK travel retail in favour of more attractive tax savings on the continent. In the aftermath of the announcement on 11 September, confirmed in the consultation
74 TRBUSINESS
The top 10 DF&TR operators amassed sales of $6.8bn in 1999.
and via a written ministerial statement from Exchequer Secretary to the Treasury Kemi Badenoch, sources told TRBusiness that the ‘hammer blow’ to tax free sales was a complete surprise. The UK Travel Retail Forum, which is
leading advocacy efforts to reverse the decision, said it understood the consultation to be a mere fact-finding exercise on the potential merits of extending the current extra statutory concession (a legality that permits tax free sales). There are still a matter of months before
the UK cuts its official diplomatic strings with the EU and the lobby points out that at this stage, nothing has been legislated (on the decision to axe tax free sales). But worryingly, as TRBusiness understands,
the decision does not appear to hinge on whether the UK ends up striking a trade deal with the EU before the end of the Brexit transition period (31 December). As reported in October 2000, the world’s
Top 10 duty free and tax free retailers made up 34% ($6.811bn) of the $20 billion global duty free and travel retail market in 1999. In 2019, the top 10 accounted for around 65% ($51bn) of the estimated $79bn global market. Of course, that share will suffer next year on account of 2020. This, unlike the tax free decision, is to be expected. But that offers scant consolation to DF&TR. «
TRBusiness is independently and equally owned by Nigel Hardy and Janice Hook. It is available on a subscription package basis only and is published by TRBusiness Ltd every month.
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OCTOBER 2020
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