Ned
08-13-2006, 09:12 AM
Here's another unintended consequence of the new rules. It makes me think that the Feds are going to have a hard time keeping the new rules in place, at least as currently constituted. The cry of merchants can already be heard in the halls of Congress.
Originally posted by from CNBC by Julia Boorstin August 12 2006
Airline ban on liquids hits duty-free shops hard
Billions in sales of perfume, liquor at risk until restrictions are lifted
NEW YORK - Travelers are now dumping their sodas and shampoo bottles and that’s not all that’s being lost. The multi-billion dollar duty-free business is taking a serious hit.
Airline travelers in the U.S. and Britain are prohibited from bringing all gels and liquids on board. A serious hit to the big business of duty-free.
“$27 billion is the size of the global industry,” said James Featherstone, Editor of Duty Free News International. "That’s something that’s approaching what you see at a pretty substantial western European city in terms of retail sales annually."
Many duty-free retailers are prevented from selling liquids to travelers between Britain and the U.S. Those nations are a significant chunk of the $27 billion business. Britain is the biggest duty-free market, with $6 billion in sales, while North America brings in $3.5 billion in annual revenues.
About one-third of duty-free sales are liquid, including $3.2 billion of sales in women’s fragrances and revenues from wine, beer and spirits, adding up to $4.75 billion.
But it’s more than just the numbers. Duty-free is a crucial platform for high-end brands.
“Even though it may not be a large portion of their parent company’s bottom line, they see it as being a very important market for them because they’re getting high-end consumers who have a lot of money to spend, who in a way are going to be pioneer consumers for these products,” said Featherstone.
The CEO of the largest U.S. duty-free operator says the Transportation Security Administration is preventing his stores from selling any liquids at all, and that liquor and fragrances comprise three-quarters of his business.
"It is a concern now, and there is a panic," said Simon Falic, chairman of Duty Free Americas.
Security at duty-free shops is already tight.
"Our merchandise is all screened post-security," said Falic. "We deliver at the gates with personnel that has cleared security."
Now, duty-free retailers and spirits and fragrance companies are losing tens of thousands of dollars a day until the TSA allows them back onboard. It's not clear how long the government will ban duty-free liquids on flights, or how many airports will be affected.
Until the ban is lifted, many duty-free shops are arranging to deliver items to customers' homes or ship items in cargo and distribute them on arrival.
But it’s sure to be a costly process.
URL: http://www.msnbc.msn.com/id/14303374/
Originally posted by from CNBC by Julia Boorstin August 12 2006
Airline ban on liquids hits duty-free shops hard
Billions in sales of perfume, liquor at risk until restrictions are lifted
NEW YORK - Travelers are now dumping their sodas and shampoo bottles and that’s not all that’s being lost. The multi-billion dollar duty-free business is taking a serious hit.
Airline travelers in the U.S. and Britain are prohibited from bringing all gels and liquids on board. A serious hit to the big business of duty-free.
“$27 billion is the size of the global industry,” said James Featherstone, Editor of Duty Free News International. "That’s something that’s approaching what you see at a pretty substantial western European city in terms of retail sales annually."
Many duty-free retailers are prevented from selling liquids to travelers between Britain and the U.S. Those nations are a significant chunk of the $27 billion business. Britain is the biggest duty-free market, with $6 billion in sales, while North America brings in $3.5 billion in annual revenues.
About one-third of duty-free sales are liquid, including $3.2 billion of sales in women’s fragrances and revenues from wine, beer and spirits, adding up to $4.75 billion.
But it’s more than just the numbers. Duty-free is a crucial platform for high-end brands.
“Even though it may not be a large portion of their parent company’s bottom line, they see it as being a very important market for them because they’re getting high-end consumers who have a lot of money to spend, who in a way are going to be pioneer consumers for these products,” said Featherstone.
The CEO of the largest U.S. duty-free operator says the Transportation Security Administration is preventing his stores from selling any liquids at all, and that liquor and fragrances comprise three-quarters of his business.
"It is a concern now, and there is a panic," said Simon Falic, chairman of Duty Free Americas.
Security at duty-free shops is already tight.
"Our merchandise is all screened post-security," said Falic. "We deliver at the gates with personnel that has cleared security."
Now, duty-free retailers and spirits and fragrance companies are losing tens of thousands of dollars a day until the TSA allows them back onboard. It's not clear how long the government will ban duty-free liquids on flights, or how many airports will be affected.
Until the ban is lifted, many duty-free shops are arranging to deliver items to customers' homes or ship items in cargo and distribute them on arrival.
But it’s sure to be a costly process.
URL: http://www.msnbc.msn.com/id/14303374/