DENMARK. This new section is dedicated to a round-up of forthcoming events and information relating to the Danish Duty Free & Travel Retail Association.
UPDATE: 4 JUNE 2004
SWEDEN. Around 120 delegates are expected in Stockholm next week for the second Nordic Travel Retail Seminar.
The event, to be held on 8-9 June, is highlighted by a presentation of the first-ever cross-border and cross-category research study in the Nordic region. The research, conducted by AIM/Nielsen, was conceived in response to a perceived lack of reliable knowledge of post intra-EU duty free abolition consumer perceptions.
The research study, organized by event hosts the Nordic Travel Retail Group (formerly the Danish Duty Free & Travel Retail Association), and championed also by the Norwegian and Finnish trade associations, has received widespread support from many companies in the region.
The outcome of the study as well as a working party’s evaluation of the document and “˜list of solutions’ will be presented on Tuesday.
Other highlights include an introduction from Vin & Sprit Global Duty Free Director and TFWA President Erik Juul-Mortensen; an “˜inside perspective’ from former Alpha Retail Managing Director Hilary Lewis and a question and answer session on the AIM/Nielsen research.
The afternoon session will include an “˜outside perspective’ from Peter Rhedin, a lecturer at the Swedish Institute and former President of the Swedish America’s Cup syndicate in the early 1980s. Feedback from the Seminar Working Group will feature three presentations:
– “˜Consumer perception’ by Patric Sjöberg, President of SAS Trading
– “˜Pricing and price proposition’ by A&E Petersen CEO Dan Kongsted
– “˜The business model’ by Nordic Travel Retail Group Chairman Alan Bork
The day will conclude with an extended panel and audience discussion.
The seminar is moderated by The Moodie Report publisher Martin Moodie.
UPDATE: 10 MAY 2004
DENMARK. At its annual general meeting last week, the Danish Duty Free & Travel Retail Association changed its statutes to create a new duty-free and travel retail association, with the purpose of forming a representational platform for travel retail companies in those Nordic countries currently without an association – namely Sweden and Iceland.
In addition, the three Baltic countries Estonia, Latvia and Lithuania are included. Norway and Finland already have duty-free and travel retail associations.
To reflect the wider Nordic approach the association at the same time changed its name to the Nordic Travel Retail Group. The purposes of the change are:
• To enhance the representational coverage in the Nordic region
• To strengthen the industry’s ability to delay and offset threats against the industry from legislators and others
• To create a more effective communication network for the industry in the Nordic Region
• To enable more extensive industry initiatives difficult for one single country to undertake e.g. market research.
Nordic Travel Retail Group chairman Alan Bork commented: “The fact is that the Nordic travel retail market is very much a cross-border business. We share common issues and face common threats. With this move we are providing the industry in the Nordic region with a representational body which covers the whole region and leaves nobody aside.
“Of particular focus are the three new EU member states Estonia, Latvia and Lithuania who not only for geographical reasons but also for trade reasons can be considered part of the Nordic region. They will in particular be able to benefit from the experiences post 99 from implementing the travel retail concept replacing the genuine duty-free concept.”
The new Nordic Travel Retail Group will work closely together with the existing associations in Norway and Finland. The first occasion for a Nordic gathering is the upcoming Nordic Travel Retail Seminar, to be held in Stockholm on 8 and 9 June. At this gathering the first ever cross-border and cross-sector duty free and travel retail market research is to be presented. A group of industry executives representing all sectors and all Nordic countries met recently in Stockholm to evaluate the outcome of the market research and to create a “list of solutions” which will also be presented at the Seminar in June.
UPDATE: 24 FEBRUARY 2004
SCANDINAVIA. Following the success of last year’s Nordic Travel Retail Seminar organised by the Danish Duty Free & Travel Retail Association, a second event will be held on 8 and 9 June.
The seminar will present the outcome of a dedicated research study into consumer attitudes to duty free that resulted from the first seminar. That event closed with a list of issues relating to the future of the region’s travel retail industry.
The Danish Duty Free & Travel Retail Association (www.rejsehandel.dk) said: “A working group to be called the Seminar Working Group was formed to further discuss the various issues. At its first meeting last September, the group launched a comprehensive research study to make up for what was believed to be a substantial lack of reliable knowledge of post-abolition consumer perceptions.
“This first ever cross-border and cross-sector market research study in the Nordic region is well under way and the results are due later in the spring. The Research Study, championed by the Norwegian and Finnish trade associations, has received widespread support from many companies in the Nordic Region.”
The Seminar Working Group includes 16 senior industry executives representing all sectors; landlords, suppliers and retailer and representing all Nordic countries; Finland, Sweden, Norway and Denmark. It is to convene in late April at a two-day meeting in Stockholm to evaluate the outcome of the research study and to draft a ‘list of solutions’ addressing the issues identified at last year’s event.
The June event will be moderated once again by Martin Moodie, publisher of The Moodie Report.
Invitations will be posted in early March.
UPDATE: 20 JANUARY 2004
Dates confirmed for 2004 seminar
DENMARK. The Nordic Travel Retail Seminar, organised by the Danish Duty-Free & Travel Retail Association has been confirmed for Tuesday 8 June 2004.
UPDATE: 26 SEPTEMBER 2003
“Danish Duty Free & Travel Retail Association takes new steps in research and customer communication”
DENMARK. Nordic travel retail industry executives met again in Copenhagen this week to discuss difficult issues facing the business
Following a decision made at the Nordic Travel Retail Seminar organised by Danish Duty Free & Travel Retail Association in August to form a Working Group to discuss the industry’s problems, this Working Group convened on Tuesday 23 September for its first gathering in Copenhagen.
Sixteen travel retail industry-executives representing all industry sectors; suppliers, retail operators and landlords as well as covering all the Nordic countries Denmark, Sweden, Norway and Finland met to discuss industry issues as they were expressed in the “closing statement” of the Nordic Travel Retail Seminar.
Alan Bork, chairman of Danish Duty Free & Travel Retail Association expresses his satisfaction with the outcome of the meeting:
“Considering that this industry is not only still dealing with the aftermath of the duty free abolition in 1999, but is also burdened by the global crisis in the travel industry, it is relieving to see how the various players in the industry can set aside their narrower business interests and take part in a broader discussion on how to deal with the problems facing the industry.
“In the Danish association we are particularly happy to see that not only all sectors are represented but also people from all the Nordic countries participate in these discussions. Only together will we be able to re-build this business into former greatness”.
The latest meeting in Copenhagen concluded that the key issues to be addressed are: the price proposition post-1999, the consumer perception of the tax free and duty free and travel retail concept, customer communication (to deal with the wide-spread confusion among travellers) and ultimately a discussion on whether the business model is still viable in the post-abolition market situation.
As pointed out many times before by various industry executives the lack of information-sharing and available consumer research was also discussed at the meeting. As a major outcome of the meeting the Working Group decided to initiate a Nordic-wide research project into consumer-perception. A research group was formed and will in near future be contracting a market research company to undertake such a study. The Danish Duty Free & Travel Retail Association has undertaken the task of co-ordinating the project.
Another issue discussed at the meeting was the “loss leader” strategy of influencing consumer perceptions by emphasising the price-proposition through exceptional prices on selected lines. Suppliers and retailers agreed they will meet up again in near future to investigate further into the possibility of testing this concept.
The Working Group will meet again in the middle of January 2004 to discuss further. The research project is expected to be finalised by that time which will benefit discussions with an updated market situation.
UPDATE: 5 SEPTEMBER 2003
Spirits tax cuts send Nordic travel retail into a spin
DENMARK. Sweeping cuts in Danish spirits taxes from 1 October are set to have significant repercussions for the country’s liquor trade. The spirits tax will decrease from €36.96 per litre (100% proof) to €20.16, a decrease of -45.5% before VAT. Travel retail (duty paid) spirits buying by Danes will be hit, mainly on the ferries, as a very high percentage (some claim as much as 52%) of all spirits consumed in Denmark are currently bought either in duty free/travel retail or lower tax Germany.
Besides motivating Danes to shop at home, the tax cuts will also encourage Swedes to buy duty paid (either in domestic or in intra-EU travel retail) in Denmark. Excise rates in Sweden (though lower than non-EU Norway) are among the highest in Europe. The big question being asked by regional suppliers and retailers is when will other countries such as Sweden, Finland and Norway follow suit? Already, as of 20 August, part of that answer has been delivered, with Finland announcing a drastic -44% cut in spirits taxes from next March to offset competition from Estonia (which will join the EU in May 2004).
The Moodie Report spoke to one of the region’s most powerful suppliers, V&S Global Duty Free & Travel Retail president Erik Juul-Mortensen (also president of Tax Free World Association) about the changes.
The Moodie Report: We understand that Denmark will reduce spirits taxes on 1 October?
Erik Juul-Mortensen: Correct – and, as reported on August 20, Finland will follow suit on March 1, 2004 by approximately 40%!
The Moodie Report:: What will the Danish cuts mean in real terms?
Erik Juul-Mortensen: The current tax level will be reduced by approximately -45%. The rate in Denmark is now DKK 275 per litre of pure alcohol and this will be reduced to DKK 150 per litre of pure alcohol (approximately €20.10). This means that the excise on a standard bottle of spirits of 45% by volume will be reduced by DKK 39.39 or € 5.30. The retail price will be reduced by around € 6.70.
In Germany the alcohol tax excise tax is €13.03 per litre of pure alcohol for spirits, equal to €4.10 per bottle of 70 cl and 45% alcohol.
The Moodie Report: Is this only excise duty rate we are talking about or a VAT rate change as well?
Erik Juul-Mortensen: Excise rate. On top of excise we have VAT at 25% in Denmark and 16% in Germany
The Moodie Report: This must mean big repercussions for domestic and duty free as I read that 52% of all spirits consumed in Denmark are bought in Germany and duty free/travel retail?
Erik Juul-Mortensen: Although the private imports from Germany and duty free are both considerable, there are doubts about the percentage, all depending on the source/interest group. As you may know, V&S Group is by far the biggest supplier to the Danish market with approximately 50% of the total market and we estimate the figure to be somewhat lower.
There is no duty free between Germany and Denmark, Sweden so there will be no major issue for duty free. The hit could and would be in travel retail or Travel Value. It should also be remembered that effective January 1, 2004, every Dane can buy up to 10 litres of spirits at every visit to say Germany [see 24 hour rule, below].
The Moodie Report: Does this mean the duty free saving will be largely eroded for Danes (though not Swedish or Finnish or Norwegian customers)?
Erik Juul-Mortensen: There will be no effect on duty free; however there will be on travel retail/Travel Value and on domestic sales. Norwegians would still be able to buy duty free when coming from Germany, Denmark etc as Norway is not an EU member.
The Moodie Report: Will it lift sales to Swedes as they come to Denmark for spirits and can buy bigger volumes?
Erik Juul-Mortensen: This will be negative for the Swedish state monopoly retail, as quite rightly it could be expected that more people will come to Denmark for their requirements. Sweden could be forced to follow suit [with a duty cut]. As mentioned, Finland has already made a move. .
The Moodie Report: What will this mean for duty free overall? Will it mean a big switch to the domestic market for spirits buying? Or is the saving still enough to keep business strong?
Erik Juul-Mortensen: There will be no major change for duty free. Travel Retail will come under pressure from the domestic market. We also expect that part of the German border sales will transfer to Denmark. This, however, will be countered by the change in import regulations effective on January 1, 2004
The Moodie Report: What will happen to the Swedish business?
Erik Juul-Mortensen: We expect a significant increase in the retail business bordering up to Sweden, e.g. in Elsinore, Copenhagen and Frederikshavn. For the latter, this should stimulate the number of passengers onboard Stena Line from Gothenburg to Frederikshavn.
The Moodie Report: Any other important repercussions?
Erik Juul-Mortensen: The relative importance and increase of ready-to-drink products in the domestic market could decrease as these products with their relative high prices will loose their competitive edge. But that could also be wishful thinking!!
The 24-hour rule
From 1 January 2004, the previous 24-hour limitation on Danes travelling abroad (the “24-hour rule”) before being able to buy liquor and cigarettes will be lifted. Current regulations say that travellers must be out of the country for at least 24 hours and after that only have a 1.5 litre liquor allowance on return. The new rule abolishes the time regulation and raises the personal limit to 10 litres, which could be purchased on every trip to, say, Germany.
The Moodie Report: Are the two changes (24-hour rule and spirits tax decreases) directly linked?
Erik Juul-Mortensen: Yes, they both pull towards establishing one common market. The change of import allowances brings an end to the long row of extensions which Denmark (and more recently Sweden and Finland) has been able to negotiate with the EU. The end of this forced the Danish Government to reduce alcohol taxes prior to January 1, 2004, so yes the two things are directly linked
The Moodie Report: Will the end of the 24 hour rule mean a shopping boom?
Erik Juul-Mortensen: Yes, to some extent although it is expected that this will fade out during the first months of 2004.
The Moodie Report: Are we talking about duty free or travel retail pricing here?
Erik Juul-Mortensen: Domestic Retail and not duty free and not travel retail. It has no importance for duty free and travel retail will be under pressure to show sufficient savings against domestic retail.
The Moodie Report: How will the ferry companies react to this in terms of routes and prices onboard?
Erik Juul-Mortensen: It is doubtful if major changes in routes will occur. But it could be envisaged that the ferry operators (again) will turn to the suppliers for better prices in order to be able to show sufficient savings in their travel retail prices against the domestic trade. As this will be more than difficult to obtain (from some suppliers!) it could also be envisaged that some changes in assortment will occur.
The Moodie Report: What are the key implications for suppliers?
Erik Juul-Mortensen:: Yet again, it could lead to extra pressure on suppliers in the Trinity [landlords + retailers + suppliers] to give price concessions for the retailers in Travel Retail to stay competitive with domestic market pricing.
UPDATE: 20 AUGUST 2003
Joint working group created to advance interests of Nordic travel retail industry and arrest “image crisis”
NORDIC REGION. A powerful working group, representing airport authorities, airlines, ferry operators, concessionaires and suppliers has been formed to address a worsening image crisis in the Nordic duty free and travel retail market.
In an industry first, all sectors of industry are coming together to advance the industry’s cause and to address a number of urgent concerns that are afflicting one of the world’s most important duty free regions.
The working group arose out of the Nordic Travel Retail Seminar held in Copenhagen yesterday. The meeting, which was sold out, attracted a packed audience of well over 100 delegates from all sectors of the business and all countries in the region.
A statement was issued at the end of the conference, which read: “This gathering of the Nordic travel retail and duty free industry believes that the business in the region faces a major image crisis and a number of serious issues that all elements of the trade – retailers, suppliers and landlords – must address if the industry is to go forward in the future.
“These include:
– Low penetration rates
– The price proposition post 1999, particularly in light of the enlargement of the EU and Norway’s ultimate access to the EU
– Adapting the business model to a win/win/win model in which all parties – landlords, retailers and suppliers – view themselves as stakeholders in the business to the ultimate benefit of the end user, the travelling consumer
– Poor consumer perception of travel retail
“As a result, it has been decided, with immediate effect, to create a Nordic-wide working group, representing all sectors of industry, to address these issues and seek resolutions. The group will report back through the Danish Duty Free & Travel Retail Association to ensure that these issues and the measures put in place to address them are aired throughout all sectors of the business.”
The Nordic working group so far includes the following individuals (more will be seconded if necessary):
Erik Thomsen, Inflight Service; Dan Kongsted, A&E Petersen; Johan Båsk, Silja Line; Lars Hjartbo, My Travel; Kenneth Guldbjerg, Copenhagen Airports; Patrick Sjöberg, SAS Trading; Gordon Jacobsen, Color Line; Kim Aakgaer, Saether; Alan Bork, Danish Duty Free & Travel Retail Association; Göran Nord, Stockholm Arlanda Airport; Claus Langer, Pernod Ricard and others to be named.
A full report on the seminar will appear on The Moodie Report.com soon. The event was held on the DFDS vessel, the M/S Pearl of Scandinavia, took delegates from Copenhagen to Oslo during the dinner after the seminar
Comment:. The conference, which was moderated by the writer, was one of the best, I have attended in recent years. An industry-driven event, it offered extraordinary value for money and attracted all key sectors of the business in this heartland of the duty free industry. The frankness of the debate was surprising, as was the widespread recognition that this is a business and a region facing crisis.
The consumer price proposition and the industry’s financial model (both closely inter-related) came under particular attention and it was encouraging to see the meeting close with a clear call for action – one that mirrored the mood of change at a global level seen at the Trinity Forum in June. The Danish Duty Free & Travel Retail Association should be congratulated on an outstanding initiative and for taking the lead in addressing the industry’s problems.
UPDATE: 3 AUGUST 2003
Nordic seminar a sell-out as major issues loom in region
DENMARK. The Nordic Travel Retail Seminar, organised by the Danish Duty-Free & Travel Retail Association on 19-20 August 2003, has been declared sold-out.
The event is being moderated by Martin Moodie, publisher of The Moodie Report.
The seminar is being held in an unique and appropriate setting, onboard the DFDS Seaways M/S Pearl of Scandinavia, which will sail to Oslo, Norway, while the post-seminar Gala dinner takes place. Delegates fly back to Copenhagen from Norway the next morning.
Well over 100 delegates have registered for the event, which is themed: “Is the duty free and travel retail industry in the middle of an image crisis?” It will focus on a series of issues that are threatening one of the world’s key traditional duty free markets.
An impressive speakers’ line-up includes representatives from the airport, retailer and supplier communities. Speakers include: Arlanda airport commercial affairs director, Thomas Cassel and Oslo Gardemoen airport commercial director Espen Ettre; The Nuance Group business development director Mark State and Color Line retail manager Gordon Jacobsen; A&E Petersen managing director Dan Kongsted; Danish Duty Free & Travel Retail Association chairman Alan Bork; plus two guest speakers, Gebr Heinemann managing director Gunnar Heinemann and Dubai Duty Free deputy managing director George Horan.
For further information, please contact Alan Bork, chairman, Danish Duty Free & Travel Retail Association by e-mail at: alan.bork@mail.dk
Danish Duty-Free & Travel Retail Association
Objectives
Our primary objective is to ensure the best possible conditions for the travel retail industry. Therefore we inform the consumers about the advantages of shopping when travelling.
Messages
The Danish Duty Free & Travel Retail Association has two primary messages:
1. The Association wishes to tell the consumers that it is still inexpensive to shop when travelling; and less expensive than shopping at high street prices.
The background for this message is an analysis carried out by DDFTRA in December 1999. This analysis showed that many travellers believe that there is no longer money to save when shopping during travelling.
Consumers are convinced that the changes in the customs system on 1 July 1999 have made it too expensive to shop while travelling despite the fact that most prices are still on the level of 1 July 1999.
2. In addition, the Danish Duty Free & Travel Retail Association takes on the task of informing consumers about the customs system for trade in airports, on board airplanes, and on board ferries when travelling abroad. The DDFTRA analysis showed that many of the consumers find the custom systems far more confusing and difficult to understand after the changes of 1 July 1999.
Members
The Danish Duty Free & Travel Retail Association is an association of Danish companies working in various ways within the travel retail industry: operators, suppliers, ships’ chandlers, stores in airports and onboard ferries.
Board
- Retail Manager Alan Bork, Københavns Lufthavne (chairman)
- Director Thomas Just Karberg, Hans Just
- Director Henrik Tornager, Scandlines Danmark
- International Sales Manager – Duty Free Tage Juul Christensen, House Of Prince
- Purchasing Manager Lars Hjartbo, MyTravel Airways
- Regional Manager Peter Roland, Bryggerigruppen (supplier)
- Sales Manager Lars Münter, A&E Petersen (supplier)
Secretariat
Rejsehandel – Danish Duty Free & Travel Retail Association
c/o Rostra Kommunikation
Kalkbrænderiløbskaj 4-6
DK-2100 København Ø
Denmark
Tel: +45 70 23 00 53
Fax: +45 33 15 94 22
Email: info@rejsehandel.dkinfo@rejsehandel.dk
Web: www.rejsehandel.dkwww.rejsehandel.dk
