Duty-free Shop - History

History

The world's first Duty Free shop was established at Shannon Airport in Ireland by Brendan O'Regan in 1947 and is in service to this date. Designed to provide a service for Trans-Atlantic airline passengers typically travelling between Europe and North America whose flights stopped for refuelling on both outbound and inbound legs of their journeys, it was an immediate success and has been copied worldwide.

Duty free shopping was in its infancy when two American entrepreneurs, Charles Feeney and Robert Warren Miller, created what is now Duty Free Shoppers (DFS) on 7 November 1960. DFS started operations in Hong Kong and spread to Europe and other places around the globe. Securing the exclusive concession for duty free sales in Hawaii in the early 1960s created a business breakthrough for DFS, and the company was positioned to focus on emerging Japanese travelers. DFS continued to innovate, expanding into off-airport duty free stores and large downtown Galleria stores and grew to become the world’s largest travel retailer. In 1996, LVMH Möet Hennessy Louis Vuitton acquired the interests of Feeney and two other shareholders and today jointly owns DFS with Miller.

In this same period, several locales grew as duty free shopping destinations. They are exemplified by Saint Martin and the U.S. Virgin Islands in the Caribbean, Hong Kong and Singapore. Still others claim prices competitive to duty free. Generally, goods are free of duty and tax levied on imports for sale anywhere in the shopping destination. Merchants may pay inventory/business or other taxes, but their customers usually pay none directly. Buyers must declare all purchases (duty-free or otherwise) as they enter any duty-levying country.

The mere absence of duty or other taxes on goods being sold does not assure that they are bargains. Costs of identical goods from different duty-free sources can vary widely. They often depend on the presence or absence of nearby competition, e.g., airport stores, especially if all at any airport are owned by a single firm such as Dufry. Also, prices can often be driven upward by the costs of buyer convenience, e.g., in-flight sales by airlines.