Introducing duty-free shopping for arriving passengers would make the UK’s aviation and tourism scene more competitive internationally, according to the boss of Gatwick Airport.
In an interview with City A.M., Stewart Wingate, who has led Britain’s second largest airport for over a decade, said: “One of the things we continue to lobby the government on is why we don’t take advantage now that we are outside of the EU and offer that product to passengers arriving into Gatwick or the other UK airports.”
More than 60 countries around the world have implemented arrivals duty free, including nations in Asia, the Middle East and Oceania. In the UK, the government substantially increased inbound duty free allowances after the UK left the European Union but passengers are still not able to purchase products on arrival at duty-free prices in British airports.
The Gatwick boss said introducing duty-free arrivals would make the UK more competitive against international rivals and stimulate jobs in the retail sector, while having little to no impact on domestic sales.
“If you would go to let’s say, Oslo airport, when you arrive into Oslo airport, as you go through the reclaim areas, there’s the ability to buy duty free products at that point on your journey,” Wingate argued. “Now that we’re not in the EU, it would strike us that one of the freedoms and one of the opportunities that we have, if we so choose, is to do likewise.”
There are concerns the EU may implement a change to its policy before Britain, which would damage sales at UK departure stores. When Norway introduced duty-free arrival stores in 2005, sales to Norwegian-bound passengers at Aberdeen airport fell by 40 per cent, with the average spend per passenger halving.
GVA boosts from arrivals duty-free would be estimated at some €300m (£253m) for Spain, €190m for Italy and €580m for France, according to modelling from the European Travel Retail Confederation.
Although major hubs like Heathrow, Manchester and Gatwick would be significantly impacted by a change to duty free policy, it is Britain’s regional airports that would likely benefit the most. Both Teeside and Southampton net a significant proportion of revenue from their duty free segments, which are hugely important for their financial sustainability.
The debate over duty free shopping echoes calls in the aviation sector over the so-called tourist tax, which was introduced in 2021 when the then Chancellor Rishi Sunak scrapped VAT-free shopping for international visitors.
A chorus of business figures including the fashion designer Sir Paul Smith and hotelier Sir Rocco Forte argue it is driving wealthy buyers from around the world to other European cities, while hurting businesses in the UK capital.
Wingate said he backed those calls.
“Let’s say I’m coming in from the Middle East or I’m coming in from the US… If [I] want to buy more expensive items… Am I gonna do that in the event that I can’t claim back the tax on the products that I buy or, alternatively, am I gonna go to Amsterdam or Paris or Madrid, or any European city where I can do that?”
The Treasury was approached for comment.