INDIA. The International Spirits & Wines Association of India (ISWAI) has criticised proposals to halve the duty free liquor allowance in India, saying that it “will break the back of this channel”.
As reported, airport companies, investors and travel retailers are becoming increasingly alarmed at proposed cuts to the arrivals duty free allowance in India.
These proposals suggest halving the liquor allowance from two litres to one litre and eliminating the tobacco allowance. The ISWAI, which is a representative body for multinational alcoholic bodies that have operations in India including Diageo, Pernod Ricard, Bacardi and Brown-Forman, has outlined the possible consequences of this proposition, saying that duty free represents “a small but significant channel for upmarket brands”.
ISWAI Executive Chairman Amrit Kiran Singh said: “Reducing the allowance of duty free alcoholic beverages by half will strike at the root of the business of concessionaires at the airport and reduce the profitability of the airport operators.”
A statement issued by the ISWAI also cautioned that any change to operating conditions as a result of the proposed changes would lead to increased commercial disputes between airports and concessionaires.
In his analysis of the situation, Singh added that reducing the duty free limit for alcohol to bring India in line with other countries would be unfair as India’s basic customs duty of 150% is higher than most other countries.
“Volumes of scale help duty free operators provide more attractive prices and range at their airports. Reducing the duty free allowance by half will reduce the importance of Indian duty free and make Indian duty free less attractive than competing airports. Travellers will buy products at Dubai, Singapore and London before travelling to India. This will eventually kill the duty free channel in India,” he said.
“We would humbly suggest this proposal if at all being considered by the ministry be stalled, in the best interest of India,” Singh concluded.
