TAIWAN. The duty free industry in Taiwan faces a major threat from new Customs Administration regulations that will force travel retailers to report detailed information on shoppers and their purchases to the government.
Local retailers and suppliers fear that the rules – announced on 31 July ahead of a seven-day consultation period – will have a severe impact on their business if implemented as they stand, both in terms of passenger convenience and resistance as well as compliance costs.
Under the new rules duty free retailers will have to register the personal data of every passenger making a purchase at their stores, as well as reporting their purchases by both product and quantity.
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Government departments have blamed Arrivals duty free shopping (pictured is an Ever Rich Duty Free Arrivals shop at Taipei Taoyuan Airport) for disrupting the local market. But any resultant damge to Arrivals sales will simply benefit Departures duty free shopping in overseas countries. |
As well as the effect on transaction times caused by explaining and implementing the new data requirements – and the big impact that such delays will have on sales – there are also concerns that customers will react strongly against having personal data collected for the government by a third party.
One source said: “While most other countries are trying their best to simplify transaction procedures, Taiwan is making it more difficult for travellers.”
The international standing of Taiwanese airports will also be damaged due to declining customer service and invasion of privacy, the source suggested, adding that passengers will instead choose to shop at airports at other stages of their journeys (see The Moodie Report comment below).
A source told The Moodie Report: “Taiwan is known to protect human rights. This will become a joke. This kind of practice should not happen in Taiwan.”
Another fear is that customers travelling in tour groups and buying on behalf of their companions will be deterred from purchasing by the complicated new rules.
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The government-owned Taiwan Tobacco and Wine Monopoly Bureau stores will also be negatively impacted by the new legislation, if passed |
The Ministry of Finance said that the amendments to Customs Act Article 61.4 are intended to ensure compliance with rules on the sale of products from Mainland China, as well as guaranteeing that age limits on the sale of liquor and tobacco are observed.
It added that the move was also in part a response to requests from other government departments to restrict Arrivals sales in order to preserve “domestic market order”.
Retailers have been given until 6 August to send comments or questions to the Ministry of Finance. No indication has been given yet of when the new regulations must be implemented.
The move would also affect government-owned duty free retailer, the Taiwan Tobacco and Wine Monopoly Bureau.
Industry executives wanting to give feedback during the consultation period can contact customs@webmail.customs.gov.tw by e-mail.
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Taiwan’s duty free retailers, led by Ever Rich and Tasa Mang, are admired worldwide for their commitment to giving back to local society |
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COMMENT: Taiwan’s duty free industry has been one of the world’s best and most efficient in recent years, helping to fund both airport infrastructure development and tourism growth, writes Martin Moodie. Its airport retailers also lead the world in terms of their commitment to local society.
These regulations therefore, if passed, will not only hurt retailers, but will also dent airport revenues and damage the Taiwanese community. Equally, they will erode the credibility of one of Taiwan’s most successful tourism-related sectors, isolating it from normal business practice around the world.
The new rules also raise important confidentiality issues for suppliers, as the government will have access to highly sensitive sales information that sources fear could be leaked.
The argument that domestic markets are hurt by Arrivals duty free shopping is an age old one. If Taiwan gives in to that argument it simply benefits the Departures duty free business in other countries. And Arrivals duty free shopping is likely to become established in several other countries in Asia and around the world, as governments seek to maximise returns to the local economy from spending by international travellers [A new report on Arrivals duty free shopping worldwide will be available shortly from The Moodie Report – please e-mail Research Manager Victoria Bowskill at Victoria.Bowskill@TheMoodieReport.com].
It is to be hoped that common sense prevails and that a thriving and much-admired business sector is allowed to flourish unencumbered by the shadow of “˜big brother’ that will surely lead to mass consumer resistance.
