In the town where I was born lived a man who sailed to sea and he told us of his life in the land of duty-free.
First published in Prestige Magazine (November 2012 edition).
Note: Apologies on behalf of Prestige Magazine for the grammatical error in the first line of the printed version.
The Beatles’ classic is actually a children’s song – not, as many would believe, a cryptic drug anthem. It overflows with an unbridled, childlike enthusiasm, which I wanted to reference here right now, because it’s how I feel, as I’m sure does any lover of fine spirits, whenever I step into the duty-free liquor wonderland. The expression “like kid in a candy store” has never been more apt. You may think that this sounds like an overblown infatuation, perhaps a contextual attraction – after all what else is there to do in airport whilst you wait for a flight? If you did you would be wrong. There are several rational, emphatic reasons why duty-free (sometimes referred to as travel retail) is as good as it gets when it comes to buying booze.
The original (and on-going) purpose of a duty-free store is to offer for sale goods that are exempt from certain taxes and duties which would otherwise be levied within that jurisdiction. This doesn’t always guarantee good pricing – as with all retail businesses it depends on the individual operator. It does however confer a significant advantage, and, given an efficient retailer, a nexus where competition, good purchasing, and effective management have satisfactorily come together, the results can be astounding, so much so that many of these duty-free retailers have become redistributors as well. It’s cheaper for many in the trade to buy from them because of the volume discounts that they command than to buy directly from official distributors or even the suppliers themselves. My regular port of call is Dubai Duty-Free, one of the muscular superheroes of this milieu. I’ve taken the liberty of noting a few random examples, adjusted for bottle size, alcohol content and exchange rate, and comparing them to local pricing (as represented by Makro, our most cost-effective retailer, to further make the point).
The extent of the advantage varies from product to product but the general trend is unmistakable. An average discount of 25% across this basket speaks for itself.
I don’t have access to any data but common sense suggests that frequent travellers would be wealthier, and have a tendency to command more disposable income than less frequent travellers or non-travellers, in a very general sense of course. They are also a focused and entirely captive audience. Travel retail has thus evolved into a highly prestigious shopping ambit. Airports accommodate many of the world’s most exclusive luxury brands, the Cartiers and Louis Vuittons, the Dom Perignons and Cohibas, precisely to capitalise on this phenomenon. In the sphere of distilled spirits this translates into a benefit that I find particularly interesting. The latest, premium offerings are almost always available in duty-free before they’re launched anywhere else. Suppliers often use travel retail outlets, specifically those in busy high-profile airports such as Heathrow, CDG, Changi or Hong Kong, as a showcase for their brightest stars. As a result the duty-free shopper will invariably have immediate access to the best-of-the-best, and at the best pricing to boot.
A well-stocked duty-free shop is a veritable Aladdin’s cave. You may not find the sheer volume of variety that you would in a wholesaler or liquor superstore, especially in the budget categories, but there is always broad range of quality, international brands on offer. You’re likely to find products that may not be available at all in your home country, or limited edition duty-free exclusives that are unavailable anywhere other than duty-free. I recently came across a Yoichi 20 year-old Japanese whisky, the 2008 World Whisky Award winner for best single malt. Good luck finding this in South Africa. The duty dynamic, the fact that many countries allow repatriation of duty-free purchases calculated by bottle instead of volume, has also led to the proliferation of unusual sizes in duty-free, most commonly the 1l bottle, but 3l and 4.5l bottles, rare everywhere else, also abound.
In case the preferential price isn’t enough motivation, suppliers tend to reserve a big chunk of their promotional budgets for duty-free. The most popular is the buy-two-get-something-free deal. And the something-free can be significant indeed – a high-quality bag or case, or a 350ml bottle – especially when you consider that the pricing is already razor sharp.
A quick note in conclusion
The idea of a duty-free shopping was conceived by Irishman Brendan O’Regan who opened the first store at Shannon Airport in Ireland 1947. I’m already grateful enough to the Irish for inventing whiskey, but this really puts them over the top. I think I’m going to wear green permanently in tribute.