EUROPE. The new President of the European Travel Retail Confederation (ETRC), Dufry Global Commercial Director Nigel Keal, says that he wants to revive the espace voyageur concept in helping to legitimise travel retail.
Espace voyageur was launched in the 1990s in the run-up to the abolition of intra-EU duty free. It championed the notion that the travel retail channel should be considered a separate entity from domestic retailing for key regulatory purposes. Keal told The Moodie Davitt Report: “It is time to dust that off. There was a lot of work and research done in those days that we need to re-look at and let’s see if there is a desire for the EU Commission to engage with us in the coming years to protect travel retail as a separate entity.
“Everything that is done at the moment is done with the domestic market in mind and therefore we have to discuss it on a country level. We need to see if there is a sufficient will to take travel retail separately.”
In 2018, the Irish government passed wide-ranging legislation governing the sale of alcohol, but with exemptions made for duty free on key measures. Keal added that he hoped to see more legislators in Europe take a similar approach when enacting legislation that can impact travel retail.
Keal joined Dufry 13 years ago as Procurement Director after previously being with World Duty Free, which Dufry acquired in 2015. His background is in the beauty buying side and he has been on the ETRC’s Supervisory and Managing Board for several years. As a result, he has a strong relationship with former ETRC President and the new President of the Duty Free World Council (DFWC) Sarah Branquinho. “I am filling some big shoes as far as Sarah and [outgoing ETRC President] Frank [O’Connell] are concerned,” Keal said.
“But I know them both personally and as part of the ETRC so they are helping ease me in. I have a lot of respect for them, [former TFWA President] Erik [Juul-Mortensen] and all the other members of the Board that did a fantastic job to get the ETRC where it is today. It is now about how we take it forward.”
One way Keal said he is looking to take the confederation forward is by using his contacts in the beauty sector to increase membership of the ETRC within this category.
“I have good relationships with suppliers and I am now in a position to explain the benefits the ETRC can bring. The beauty industry has never been that proactively involved with the organisation because they haven’t needed to be, so it is good for me to be able to impress upon my contacts in various categories the very pertinent value of the ETRC,” he said, adding that the confederation now has a “good nucleus of key brands and suppliers” across the core categories.
Keal said he wants to be proactive in the face of challenges faced by the travel retail industry. Top of his in-tray of challenges and opportunities for the ETRC are: Brexit, labelling and tobacco.
The UK is scheduled to leave the European Union on 31 October and, if it does so without a transition deal in place, there will likely be an immediate return for duty free shopping on routes between the UK and the European Union.
However, the situation is in flux, with the UK Parliament passing legislation designed to prevent a no-deal Brexit. “We are keeping our ear to the ground and knowing what the opinions are should anything take us by surprise,” Keal commented.
The ETRC has been proactively leading the way on product labelling. As reported, the Confederation has run a pilot for its off-label solution at Hamburg Airport and the software is being firther developed. Keal said the solution is “the way forward” for the ETRC.
The latest on labelling from ETRC Secretary General Julie Lassaigne:
“We get a lot of questions from members and non-members because people see it as a way of preserving the integrity of the packaging in travel retail. When we see all the challenges we face across different categories when it comes to labelling requirements, this is definitely the answer for us.
“We are now working with our members on a one-year project to build a fully functional platform across cosmetics, alcohol and confectionery. The intention is to be able to roll that out with a limited number of suppliers and SKUs with several retailers across Europe so we can get a better understanding of how this will work on a bigger scale. The primary objective of that one-year project will be to get the green light from the [European] Commission and regulators that we can use that solution in travel retail. We will hopefully launch that project by the end of this year.”
Meanwhile, the ongoing threat of greater restrictions to tobacco sales remains an issue for the European travel retail industry. The next meeting of the countries that ratified the World Health Organization’s Illicit Trade Protocol (ITP) will take place in 2020. Ahead of this ,Keal billed 2019 as “the year of track & trace” as the industry seeks to show the duty free channel is not being abused for criminal purposes.
He added: “The ETRC has been able to ensure the majority of retailers are compliant with track & trace in the relevant category, which has taken a lot of work. We will be working with the DFWC because it has much wider implications around the world.”