WHO takes aim at duty-free liquor and tobacco

The World Health Organization (WHO) has put forward a proposal to abolish the duty-free liquor business, and is still pursuing a similar ban on duty-free tobacco.

The proposal on liquor – which took the aviation and travel retail industries by surprise – was outlined in a strategy paper exploring ways of reducing the harmful effects of alcohol consumption. Released on 3 December, the paper recommends "taxing sales of alcoholic beverages to, and/or the importation of such beverages by, international travellers".

A meeting of the WHO Executive Board, an influential group of health officials from 34 leading countries, will now discuss the proposal at a meeting on 18-23 January 2010. If adopted, the proposal will then be put to the WHO's full annual General Assembly in May. The 193 governments that make up the General Assembly would then be encouraged to implement the strategy paper as policy.

Abolition of duty-free liquor sales would have adverse consequences for airport operators and retail companies, particularly given the growing profile over recent years of non-aeronautical and commercial income. According to duty-free analyst Generation, duty-free wine and spirit sales totalled USD3.44 billion in 2008, accounting for nearly 16 per cent of all airport duty-free revenue. Duty-free industry organisations such as the Brussels-based European Travel Retail Council (ETRC) estimate the annual global value of duty-free alcohol sales at USD6.32 billion, of which USD3.49 billion was sold at airports.