BRAZIL. The Brazilian Ministry of Economy has officially confirmed that the duty free allowance for travellers entering Brazil via a land border will increase from US$300 to US$500 from 1 January, writes John Gallagher. Ordinance No 601 confirming the new allowance has already been published in the State Gazette.
This measure follows a previous announcement on 15 October, when the government confirmed that the duty free allowance for travellers arriving in the country by air would increase from US$500 to US$1,000.
As reported, both measures had been announced by the country’s President Jair Bolsonaro using his Twitter account earlier in October.
The news follows last week’s inaugural duty free border store conference in Porto Alegre, hosted and organised by South American duty free association ASUTIL and CEFSU, the Chamber of Uruguayan Free Shop Operators. For our detailed coverage of both days of that event, click here and here.
Speaking yesterday in a conference call about that event to industry media, ASUTIL Secretary General José Luis Donagaray hailed the strong attendance of 170, noting that planning only began in August. He said that the event, Encuentro de Frontera, would run next year although timing and location had yet to be decided.
He paid tribute to the organising teams at ASUTIL and CEFSU for putting together a compelling programme in a short timeframe, and highlighted the rich information that emerged from the event for both established and new operators, plus the networking and business opportunities it provided.
He said: “We had many of the new operators who, apart from the larger players like Dufry and DFA, are family-owned. Many of them had never attended the ASUTIL Conference and it is very unlikely that they would attend the Orlando show so this forum is for them very important.”
He confirmed that seven new stores would open by year-end, adding to the six that have already opened on the Brazilian side of the border under recently introduced legislation. The stores in operation to date are Dufry do Brasil, Central Free Shop, Brasil Free Shop and New York Free Shop in Uruguaiana, Free Shop Caraballat in Jaguarão and Emporio Duty Free in Barra do Quarai.
The new stores were introduced at the event by the retailers themselves, and in detail by local politician Frederico Antunes, who was a key influence in ensuring the necessary legislation was passed to permit the new channel of trading inside Brazilian territory.
Donagaray said that it was too early to quantify the potential size of the business, as so much hinges on the Brazilian economy and currency shifts. But he noted the size of the population in the Rio Grande do Sul region, which is home to the early border store developments.
“Rio Grande do Sul is home to 12 million people, which is bigger than Uruguay,” he said. “Also there are many more travel connections being developed to this region, including from other parts of Brazil, that will increase its potential.”
He said more work needed to be done on easing the bureaucratic burden on retailers and shoppers, but said ASUTIL was working hard on this.
According to official Customs data more than US$600,000 in sales had been invoiced by the stores that had opened by the end of October, with most of this (US$483,000) to Brazilian shoppers, around US$100,000 to Uruguayans and the balance mostly to Argentine nationals.
