Duty free wine and spirits suffer 2.7% decline

Global sales of duty free declined by 2.3% in 2015, with the wine and spirits category reporting a 2.7% drop in sales, according to the Tax Free World Association (TFWA).

TFWA president Erik Juul-Mortensen at the 21st TFWA Asia Pacific Exhibition & Conference

Fragrances and cosmetics were the only categories to show an increase in sales, growing by 2.3%, according to prliminary figures released at the 21st TFWA Asia Pacific Exhibition & Conference, which took place in Singapore last week.

TFWA president Erik Juul-Mortensen unveiled new data from travel retail specialists Generation Research which showed that in 2015, for the first time since 2009, global duty free and travel retail sales fell. Overall, duty free sales in 2015 totalled US$62 billion, which was 2.3% down on the previous year.

Despite wine and spirits sales falling by 2.7%, this represented a slower rate of decline than other categories, including confectionery and fine food, which saw a 4% downturn, and watches and jewellery, which declined by 13.2%.

Wine and spirits is still the second largest category within duty free, accounting for 16.5% of global sales representing a value of US$10.2 billion. The category comes in after fragrances and cosmetics which saw sales of US$19.5 billion last year and accounts for 31.5% of all sales.

In Asia Pacific markets, duty free sales of wine and spirits remained almost level (declining by a negligible 0.1%), and were valued at US$3.3 billion. Within this market, wine and spirits accounts for just 13% of sales, behind fragrances and cosmetics at 40%, and fashion and accessories at 16%. This, the TFWA said, indicated the potential for significant growth within the duty free sector in Asia Pacific.

“It is clear that while there are a number of challenges facing the duty free and travel retail sector, the wine and spirits category has not been as affected as some, and there are no shortage of opportunities to be had in this important channel,” said Juul-Mortensen.