Conference paints bright future for Middle East retail

27 August, 2008
Page 14 
Speakers at the annual Middle Eastern Duty-Free Association conference held in Dubai last month delivered an upbeat forecast for the travel retail business for 2008 based on continuing regional economic growth, rocketing passenger traffic and ambitious airport expansion plans.

MEDFA president Anthony Chalhoub told delegates that regional passenger traffic had grown 17.8 per cent in the first half of 2007, well ahead of the global average, with airports such as Dubai (+26 per cent), Qatar (+50 per cent) and Sharjah (+36 per cent) leading the way.

Airport expansion projects are at an all-time high, he noted, citing the examples of Bahrain, which has increased its capacity from 7 million to 15 million, and Abu Dhabi, which has grown from 6 million to 20 million.

The Middle East accounted for less than 4 per cent of total duty-free wine and spirits sales in 2006, but Pernod Ricard Gulf general manager David Freeborn told the MEDFA conference that the regional trends for liquor were positive, with value outpacing volume as customers moved towards premiumisation.

The high percentage of wealthy ex-pat workers travelling to and from the region, as well as the increasing importance of affluent Asian transit passengers at Middle Eastern airports, makes the market an important location for super-premium products .

Diageo Global Travel & Middle East corporate relations director Tim Rycroft sounded a more cautionary note, however. In his speech he warned the audience that in the light of World Health Organization and individual government s' crackdown on the harmful effects of alcohol, retailers should consider the positive promotion of responsible drinking in their stores.

European Travel Retail Council president Frank O'Connell gave an update on how the global aviation security restrictions are impacting the region. He warned that if Middle Eastern retailers wanted to continue to sell liquor and fragrances to passengers transiting within the EU, their respective countries would have to formally apply to the EU to have their aviation security standards mutually recognised. "There is no other way of doing this now or for another three years, at least," he said.

To date, only Dubai has applied to the EU for recognition.