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Duty-free prices in the UK

Published: 28/09/2012 - Filed under: Ask Alex » Ask Alex » 2012 »

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Dear Alex,

Why have duty-free prices disappeared in the UK, especially at Heathrow T5? An iPad is only 3 per cent cheaper at Dixons Travel. The prices BAA charges for alcohol and cigarettes are extortionate. I bought 200 cigarettes last May for £36.40 (I was travelling out of the EU) but when I flew out of Hong Kong last week, the same brand was £13. How can this be? Why does BAA not have tax- and duty-free prices for travellers departing the EU?

Simon Lilly, London

Alex replies:

I asked BAA to comment. It said: “In 1999, when tax- and duty-free pricing for intra-EU passengers was abolished across the UK, Heathrow decided to introduce “one price” for all passengers regardless of their destination. Most of our retailers offer customers a price that is less than they would pay on the [UK] high street. For example, discounts from World Duty Free are on average 50 per cent less than on the high street.”

In truth, most European airports have always marked up their tax- and duty-free prices (in comparison with airports elsewhere), with the profits going towards development and holding down the price of airline charges. Some 50 per cent of a European airport’s revenue is derived from non-aviation activity such as shopping, and concessions such as car rental and on-site hotels.

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