Duty-Free Retail Industry Impacted Heavily by Air Security

Confusion on duty-free liquids in airport setting and connecting flights hurting business

The aviation security issue is creating a crisis of confidence among many North American air travellers, which is threatening to have asevere impact on duty-free liquor sales at airports across the region. In stark and welcome contrast, the unaffected Mexican border and US cruiseship sectors are growing strongly, although beleaguered retailers on the Canadian land border are struggling to cope with a drop in US traffic.

At US and Canadian airports the issue is the confiscation of duty-free liquids from passengers catching connecting flights at transit security points, a consequence of the discovery last August of an alleged plot by UK terrorists to blow up a US-bound jet with liquid explosives. Anybody caught carrying liquids and gels over the 3fl oz (100ml) limit in their hand luggage is liable to have them confiscated.

The US Transportation Security Administration (TSA) and the Canadian Air Transport Security Authority (CATSA) are strictly enforcing the new rule. Last month, for instance, national newspaper USA Today reported that between October 2006 and January this year Miami International airport confiscated more than nine tons of oversized bottles from passengers. Many of these unlucky customers were returning US holidaymakers who had bought duty-free liquor in the Caribbean.

The International Association of Airport Duty Free Stores executive director Michael Payne says it is hard to quantify what damage the restrictions are having nationwide. "No information is yet available,but the new security legislation is having an impact," he tells TRI."Some airports are less affected than others because they have less transit traffic and fewer flights to the European Union (EU) or otherparts of the world where this is an issue."

North American airport retailers are making strenuous efforts to educate customers about the new regulations. Los Angeles World Airports concessions manager Karen Tozer has nothing but praise for DFS Group's hands-on approach to tackle the problem, for instance. "DFS worked closely with the TSA, airlines and the airport to educate passengers about the new security restrictions from day one," she recalls.

"The problem was further complicated by the EU's introduction of restrictions on transit passengers in November last year, which also had an impact on unit sales of liquor and wine," she adds. "We and DFSboth support the Airports Council International's proposal for a global solution through the use of universally accepted tamper-evident bags and harmonised security procedures."

Consistency is key

Marketing and promotions director Mona Lee Tam at The Nuance GroupNorth America, which operates duty-free stores at Calgary and Toronto Pearson International airports, says: "Our staff have been trained to recommend that a customer does not buy if we believe there is a good chance that their liquor purchases will be confiscated."

The trouble is that the continuing industry-wide lobbying effort aimed at ensuring that countries accept each other's airport security regimes and the viability of tamper-evident bags could take several months. In the meantime liquor suppliers are worried that irreparable damage is being done to the trade's image. Remy Cointreau international director global travel-retail Francois van Aal warns: "Confused passengers would rather not buy at all than risk seeing their purchasesconfiscated in transit.

"Lost buyers may be lost forever. We need to see clear consistent information at airports worldwide. Our sales staff need to be properly trained so that they can provide accurate information to passengers. It would be helpful to have a simple leaflet explaining who can buywhat and where, and how they must carry their purchases."

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