Senate approves +140% increase in Brazil’s Arrivals duty free allowance

BRAZIL. In big breaking news, the Brazilian Senate has backed a proposed increase in the individual allowance for duty free purchases made on arrival at the country’s airports from US$500 to US$1,200.

The Senate’s Economic Affairs Committee approved the proposal on 13 August, to be applied to passengers arriving at airports from overseas.

The proposal still needs to pass through Brazil’s lower house, the Chamber of Deputies, before becoming law.

Supporters of the move argued that the current US$500 limit (which has been in place for many years) has not kept pace with increasing prices in recent years, and increasing the limit would help stimulate tourism.

The news has huge repercussions for Arrivals duty free shopping in Brazil, by far the most important element of the business.

For the country’s overwhelmingly dominant travel retailer, Dufry, any lift in allowances would have profound importance. In 2012 Brazil generated around 27% of group sales and nearly one-third of EBITDA. Critically, an estimated two-thirds of Dufry’s duty free business in Brazil is generated by Arrivals shops.

The Moodie Report is seeking further clarification regarding the proposals.

The news will be particularly welcomed by Dufry, which is planning a major expansion of its Brazilian Arrivals stores in key locations. Pictured above and below are artist’s mock-ups of the expanded Arrivals store at São Paulo Guarulhos Airport.

NOTE: According to Dufry Brazil, the current allowances for arriving passengers are as follows:

– US$500, which can include:

– 24 bottles of alcholic beverages with a maximum of 12 bottles per category, such as whisky

– 10 units of perfume or cosmetics

– 20 packs of cigarettes (400 sticks)

– Plus other related duty free items

Food & Beverage The Magazine eZine