Thai Retailers Association recommends state open “public pick-up counter” to facilitate “downtown du

 

One of the policies the government can pursue to realize shopping tourism is liberalize duty-free shop trade, particularly increasing the number of downtown duty-free shops.  Downtown or airport-based duty-free shops represent a segment in the retail industry with promise and strong growth potential. 

Based on Technavio’s Global Duty-Free Retailing Market 2015-2019, the duty-free retailing industry worldwide is estimated to be worth Bht 3.6 trillion and 43% of duty-free shops are in Asia Pacific, with a major market being South Korea (13%).  According to Technavio, the duty-free retailing industry is forecast to grow at a rate of 51% in the next five years.

Downtown duty-free shops offer an alternative outlet for foreign visitors to shop.  They also play a role in stimulating more spending by foreign tourists, which is good for other related industries such as hotels, accommodation, spas, restaurants, souvenir shops as well as land, water and air transportation.

Increasing the number of downtown duty-free shops – a rising industry to stimulate the economy, will create more jobs in all sectors – manufacturing and services.  It will contribute to a distribution of income to communities.  The image of Thailand as a country which promotes duty-free retailing liberalization will be enhanced.  It will generate tax revenues for Thailand from personal income tax, corporate income tax and value added tax.  It will also provide an outlet for SMEs to sell more local products and Thai brands to foreign visitors.

Pick-up counter is a channel in the process to deliver goods purchased from downtown duty-free shops to tourists as required by the Customs Department Announcement No. 20/2006 regarding duty-free shop procedures signed 21 March 2006.  The Customs Department requires delivery of goods from downtown duty-free shops to be conducted at a pick-up counter set up in an airport.  In international practice for the management of downtown duty-free shops, a single neutral pick-up counter is required to be set up as “public pick-up counter”.  It is required to be run by a neutral juristic person which is independent of a particular airport-based or downtown duty-free shop otherwise the state or each international airport operator will have to find sufficient spaces for downtown duty-free shops.  It is impractical to provide such a space in international airports and is also difficult to supervise the area.

Based on the above principle for Thailand, Airports of Thailand Plc. (AOT) should be responsible for providing a space for setting up a public pick-up counter in all international airports under its supervision.  In doing this, the Customs Department shall give approval according to the customs law and AOT shall operate the counter or permit a neutral juristic person to operate on its behalf.  A particular duty-free shop operator or stakeholder or one with legal obligations should not be assigned to operate the counter.  Since goods from downtown duty-free shops, which have been sold to customers, will be put in transparent bags as required by the Customs Department, it will allow the counter operator to know business information of all business competitors that leave their goods at the public pick-up counter.  Among business information to be exposed are which shop sells what product, which product sells well and at what price.  It is marketing information, which if known to competitors, could tip the balance.              

Shopping tourism has become an important tool used by governments of countries to drive the economy and it has been proven effective in stimulating the economy by many countries in Europe and Asia (Hong Kong, Singapore) from the past to present.  Even big economies like the People’s Republic of China and Japan have adopted the policy.

In order to realize shopping tourism effectively, one of the actions that must be taken is liberalize the duty-free shop trade, particularly increasing the number of downtown duty-free shops.  Pick-up counter as a compulsory component required by the law and which many see as an obstacle is an easy thing to do if the government sector has an internationally accepted policy to make it public pick-up counter.  AOT or a neutral juristic person should be assigned to operate the counter. AOT and the Customs Department must have a system to share information on goods delivery to ensure transparency.

The Thai Retailers Association is asking all government agencies concerned – the Ministry of Finance, the Ministry of Tourism and Sports, the Customs Department and AOT to carefully take into account the enormous benefits Thailand stands to gain and to work together to make a public pick-up counter possible at all international airports under AOT’s supervision.  It is necessary to make the customs law effective in order to allow downtown duty-free shops to use the service, which will lead to actual liberalization of duty-free shop trade.

About Thai Retailers Association

The Thai Retailers Association represents business operators in Thailand’s retailing industry.   A non-profit organization independent of politics, it currently has 113 retailers nationwide as members.   

The Thai Retailers Association has worked as a key coordinator for government agencies related to the retailing industry. It shares information for the agencies to make important policy decisions. It also constantly supports tourism.  Among its major contributions, the association together with the Board of Trade of Thailand, the Federation of Thai Industries and the Thai Bankers’ Association submitted a proposal to the government for the exemption of value added tax for foreign tourists in a major push to attract international visitors to Thailand under the Amazing Thailand campaign following the Tom Yum Kung crisis.