Duty-Free on Arrival
Other benefits of the policy include:
The UK Travel Retail Forum (UKTRF) is the UK’s leading membership organisation for promoting the interests of travel retail and duty free businesses in the UK. At present, the Forum has over 50 members and has grown significantly as a result of the industry’s recovery from the pandemic and the uniqueness of the UK market post-Brexit. Current members include most UK airports, airport retailers (Avolta, Lagardère, Boots, WHSmith), food and beverage operators (such as JD Wetherspoons and The Restaurant Group), producers (Pernod Ricard, Rémy Cointreau, Bacardi) ferries, flight onboard operators, and other internationally renowned players in global travel. It has been an influential voice for the industry since its formation in 2000.
The increase to inbound personal allowances in January 2021 has resulted in a 45% increase in overseas duty free purchases by UK citizens returning to the country. However, as these purchases are made in departure stores abroad, UK businesses have yet to experience the benefits. The Government has rightly recognised the role of aviation in driving economic growth, and duty free on arrival offers a complementary policy to ensure that the UK’s regional airports have the commercial strength to compete internationally.
Arrivals Duty Free would create a new, sustainable source of commercial revenue for the UK travel industry and the many businesses that rely on the travel retail market as a financial cushion.
Increasing the international competitiveness of UK regional airports: Regional airports are particularly reliant on commercial income to ensure their international competitiveness, in some cases accounting for close to 50% of revenues. Travel retail and duty free is a major component of this income. With over 60 countries currently having arrivals duty free stores in place – including in Asia, the Middle East, Australasia, and all non-EU countries in the EEA – the UK’s regional airports are currently at a competitive disadvantage. Duty free on arrival would allow regional airports to reinvest revenues in further developments and flight routes from their airport, supporting their resilience, and making them more attractive to tourists and international passengers.
Cost neutral: Polling suggests that nearly three-quarters (72%) of people would not change their domestic purchasing habits of alcoholic spirits, meaning arrivals duty free would have a nominal impact on high street sales and UK tax revenues. York Aviation’s research states that arrivals duty free has the potential to increase UK sales of duty free products by up to £100 million per year. The research calculates that an increase in sales of this volume, coupled with the income tax collected from the jobs created, could generate an additional £50 million in tax revenues for the Government.
Good for businesses: The increased availability and visibility of duty free products provides an opportunity for producers to showcase the best of their goods, including Scotch whisky and other high-quality spirits. The UK’s spirits industry has long been at a competitive disadvantage as a result of high tax burdens. With point-to-point travel making up a higher proportion of traffic at regional airports, duty free on arrival offers the opportunity for regional airports to showcase the best products from their region.
Job creation and improving regional connectivity: The creation of new retail areas at UK airports will trigger significant capital expenditure for building works as infrastructure is adapted to take advantage of the new opportunity – resulting in further local economic investment. The increase in sales can be reinvested in new routes, improving passenger numbers and connectivity to regional areas.
A sustainable and significant new contribution to revenues: Independent research from York Aviation has found that the introduction of arrivals duty free would increase average spend per passenger by 20-30 per cent – money which can be reinvested into UK travel hubs.
Convenient for passengers: Polling by Yonder Consulting found that 45% of travellers regard carrying duty free purchases back to the UK on their flight as an inconvenience. Arrivals duty free provides a more seamless travel experience, giving passengers the option to make their purchases at the end of their journey.
