Thai Government to Close Duty-Free Arrival Stores After Losing 3 Billion Baht

[hotchilli]

6 hours ago, thesetat2013 said:

Given that tourism only recently began to boom. I do not see why the duty-free stores don't wait it out to begin showing profits again. Covid and international travel must have hurt their businesses quite alot and it will take time to recover from years of bad air traffic. 

Same goes for many Thais... but the can't shut-up shop, they need a living.

[Thailand]

This relates to duty free on arrival not duty free on departure where most people will do their shopping.

Simply duty free on arrival is non profitable so sensible to shut them down?  

[Spilornis]

The loss referred to in the article is customs revenue. It's not that the shops themselves are making a loss.

IIRC there was an article some months ago about the Government buying out the duty free concession holder. It may also have been linked to the reduction in the wine tarrifs.

Strange move...

[newnative]

9 hours ago, hotchilli said:

By closing stores?

555 You have to hand it to them--they can spin anything.

[Sweet Swede]

I have  bought almost nothing at duty free for many years, mainly because "duty free" does not mean profitt free. I noticed that for tobacco and spirits they often are just slightly cheaper than in the store in the country where the duty free is sold. Ten years ago 200 Camel were 50 bath cheaper at 7/11 than at the airport duty free shop. We were in Tokyo 5 years ago and at a local shop were we stayed i bought a 70 cl Remy Martin VSOP cognac for 3500 Yen, but at Haneda Airport Duty free the price for 50 cl of the exaclly same Cognac was 5500 yen. And most of the souvenirs, Duty Free sell at Suvarnabhumi, can be bought for a fraction of the DF price at Chiang Mai Night Bazar. The only thing I bought the last 15 years which has been really price worthy has been deoderant sticks and some of my favorite perfums when they been displayd att special price. 

[TallGuyJohninBKK]

22 hours ago, snoop1130 said:

Duty-free on arrival to be scrapped at Thai airports: Cabinet

 

Note the reference in the above headline to "duty-free on arrival."

 

Even though the ensuing article doesn't make it clear or reinforce the point, other news reports on this topic are clear that the government is only talking about closing the duty-free shops in the Thai airport arrivals areas -- and not in the departure areas.

 

For example:

Duty-free on arrival to be scrapped at Thai airports: Cabinet

The Cabinet on Tuesday confirmed that all duty-free shops in the arrivals areas of Thai airports will be closed to boost spending in domestic shops, aiming to generate up to 350 billion baht annually.

 

https://www.nationthailand.com/news/policy/40039344

 

"Based on the current situation assessment, travelers entering the Kingdom through international airports can purchase duty-free goods up to 20,000 baht in total value. This has led to decreased domestic consumption and shopping."

 

https://www.khaosodenglish.com/news/business/2024/07/02/thailand-to-suspend-arrival-duty-free-shops-to-boost-domestic-spending."

 

Neither of the above cited articles make any mention of the outbound departures-side duty free shops. But presumably, that's why the duty free operators in the OP cited report aren't complaining, because they'll still have that probably larger part of their business undisturbed.

 

Speaking personally, when I arrive to Thailand on an international flight, the last thing I want to do is dawdle around attempting overpriced "duty-free" shopping, and the first thing I want to do is get past the looming Immigration gauntlet and hustle my way OUT of the airport as quickly as possible.

 

 

 

Edited Wednesday at 09:24 AM by TallGuyJohninBKK

[khunjeff]

We seem to get exactly the same responses to every news item about duty free sales.

 

1) "I've never seen duty free stores on arrival": then a visit to the eye doctor might be in order, since there are shops literally flanking the entrances to the immigration hall, and at least five more in the baggage hall. They're brightly lit and pretty hard to miss!

 

2) "Prices are cheaper at regular stores": if you're looking at local products, which aren't subject to import duty, then yes, they will always be cheaper outside (and these usually aren't sold on arrival). Prices at King Power are far higher than they should be, but for high tax items (alcohol, tobacco, cosmetics, and luxury goods), the duty free stores are indeed usually cheaper, though sometimes not by much. Many people are confused by the fact that the price on a bottle of liquor is the same as outside, but don't notice that the duty free bottle is 1000ml and the one in town is 700ml. Look at the Thai girls buying cosmetics or perfume at duty free, and you can be sure that they carefully researched the prices downtown before deciding to make their purchases at the airport.

 

3) "No one buys duty free on arrival": the 3 billion baht worth of goods that were sold in the shops in the arrival area would seem to challenge this belief!

 

That having been said, this is obviously a stupid idea. The idea that purchases are completely fungible, and that a person who can't buy duty free will instead spend that money in a shop downtown, is patently ridiculous. I only buy a bottle of booze on arrival because the price is good; I will not buy the same bottle outside at a higher price, and I certainly won't buy a bottle of Hong Thong at 7-11 to replace the Glenlivet that I wasn't able to get at the airport.

 

Even the government seemed to recognize this when they first floated this idea last year, and said that closing the arrival duty free would be combined with a lowering of alcohol taxes to encourage more buying from regular shops. What happened to that tax reduction? 

 

"a reduction in beverage taxes will incentivise tourists to purchase beverages locally, contributing to the circulation of money within the economy. With an appropriate tax structure for beverages, Thai citizens will find it more affordable to buy beverages domestically," said Finance Ministry permanent secretary Lavaron Sangsnit."

 

https://www.nationthailand.com/thailand/policies/40033367

 

 

[john donson]

This is part of a strategy to make Thailand a renowned tourist and shopping destination.

 

 

yeah, that will attract more tourists, no tax free shopping zone, unique in the world?

[khaowong1]

Anyway, always noticed hardly anyone buying stuff in the arrival duty free.  If no one is buying stuff, how did they lose 3 billion baht?

•  

[rickudon]

After a long flight, you just want to get out of the airport. Also, you do not pass by any duty free shop on your route from plane to immigration, then baggage reclaim and customs, at least i have never seen one. The delay at immigration usually means your baggage gets to the carousel same time you do.

As for departure duty free, prices usually higher than UK supermarket - also they never seem to have the brands i like. 16 years and have never bought anything.

[Bday Prang]

15 hours ago, Kiwirod said:

Thai Duty-Free shops have always been a lot more expensive than elsewhere anyway !!!!!!

Always plenty of people blowing money in those duty free shops though,,  I have never understood anybody buying anything in duty free shops with the possible exception of tobacco

[cowellandrew]

And if only he had purchased some ball bearings!

[OneMoreFarang]

I would really like to see the calculations and assumptions behind their thinking - if there are any.

 

It reminds me of unsuccessful hotels who decide to raise the prices to make more money... 

Edited Wednesday at 05:19 PM by OneMoreFarang

[Dave0206]

8 location's lose 3billion baht per year that's over a million baht per day .someone is making a fortune in rent because no way salaries come near that

[khaowong1]

5 hours ago, Bday Prang said:

Always plenty of people blowing money in those duty free shops though,,  I have never understood anybody buying anything in duty free shops with the possible exception of tobacco

I agree, the only thing I have ever bought in there was tobacco.  

[khaowong1]

5 hours ago, OneMoreFarang said:

I would really like to see the calculations and assumptions behind their thinking - if there are any.

 

It reminds me of unsuccessful hotels who decide to raise the prices to make more money... 

Don't you just love that..  What the heck are they thinking? 

[Thailand]

14 hours ago, TallGuyJohninBKK said:

 

Note the reference in the above headline to "duty-free on arrival."

 

Even though the ensuing article doesn't make it clear or reinforce the point, other news reports on this topic are clear that the government is only talking about closing the duty-free shops in the Thai airport arrivals areas -- and not in the departure areas.

 

For example:

Duty-free on arrival to be scrapped at Thai airports: Cabinet

The Cabinet on Tuesday confirmed that all duty-free shops in the arrivals areas of Thai airports will be closed to boost spending in domestic shops, aiming to generate up to 350 billion baht annually.

 

https://www.nationthailand.com/news/policy/40039344

 

"Based on the current situation assessment, travelers entering the Kingdom through international airports can purchase duty-free goods up to 20,000 baht in total value. This has led to decreased domestic consumption and shopping."

 

https://www.khaosodenglish.com/news/business/2024/07/02/thailand-to-suspend-arrival-duty-free-shops-to-boost-domestic-spending."

 

Neither of the above cited articles make any mention of the outbound departures-side duty free shops. But presumably, that's why the duty free operators in the OP cited report aren't complaining, because they'll still have that probably larger part of their business undisturbed.

 

Speaking personally, when I arrive to Thailand on an international flight, the last thing I want to do is dawdle around attempting overpriced "duty-free" shopping, and the first thing I want to do is get past the looming Immigration gauntlet and hustle my way OUT of the airport as quickly as possible.

 

 

 

It appears a number of people are hard of reading!

[Lancelot01]

On 7/3/2024 at 1:24 AM, hotchilli said:

Maybe the duty free prices were just too much.... but then again aren't they always located airside in departures, or does Thailand also have arrivals duty free shops?

Not sure how closing them will spread tourists money more widely?

They've already bought what they want during the holiday at cheaper outlets.

Not sure how the Thai suppliers to duty free shops will take this loss in revenue?

The stores are in arrivals between immigration and customs.