JAPAN. Arrivals duty free shops could open at Japanese airports “within months” as part of reforms to the tax system that are set to be passed by government in April. We first reported on the move to legislate for arrivals duty free last August.
Narita International Airport Corporation Retail Operations management commented on the move to The Moodie Davitt Report in a meeting today, noting that the channel would be permitted as part of an update of tax regulations.
“New tax legislation will be effective from April,” confirmed Deputy Vice President Retail Operations Department Marketing Division Hiroomi Eguchi, who was joined by Senior Manager Retail Strategy Masamoto Mayuzumi, Manager Retail Strategy Daisuke Takayama and Supervisor Retail Operations II Kyoji Fukuda.
The team said that the detail of how to implement the new rules still needed to be worked out with the relevant authorities at Narita. It is also yet to be confirmed which spaces will be made available to house the shops at the airport. Initially, the spaces will probably be small, given the lack of space for the channel in arrivals at Narita’s three terminals.
Liquor, tobacco and cosmetics are likely to be key categories, with inbound Japanese the key target audience.
Narita Airport management expressed hope that they would open the first arrivals duty free stores in the country, noting that this could happen “within months” of the new rules taking effect.
“It could appeal to returning Japanese who do not want to carry bottles of liquor around on their trip and be a convenient last-minute shopping option,” said the airport company.
No decisions have been yet made on which retailers will be offered space in arrivals, but at Narita, airport company subsidiary NAA Retailing looks a strong contender for the initial spaces.
As we noted last year, the prospect of duty free shopping on arrival has surfaced many times in Japan, notably during the height of the Japanese outbound travel boom from 1966 till the late 1980s. Local duty free retailers and airports have often complained that overseas retailers were benefiting from high off-shore spending to the disadvantage of Japanese companies. But resistance from Japanese domestic market retailers always stopped any progress. That is now about to change, not only in Tokyo but around the country. It is a big boost in particular for newly privatised airports Sendai International and Kansai International.
With China set for a big expansion of Arrivals duty free shopping through China Duty Free Group, CNSC and possibly others, and a related extension of downtown post-Arrivals duty free retail, the Japanese embrace of arrivals duty free is a highly significant move for travel retailers both at home and abroad.
