Duty Free Discrimination

New security regulations, in particular a European Commission (EC) restriction on liquids in hand luggage, are the hot topic at this week’s Airport Council International (ACI) annual general world assembly in Cape Town.

ACI members approved a resolution today calling for governments to work together to harmonise security restrictions. Specifically, they are urging the EC to ease a new regulation which entered into effect yesterday that prevents passengers from carrying in their hand bags containers with more than 100 millilitres of liquid.

The only exception is if the containers are purchased at airport shops within the EU that are using special tamper proof bags. But ACI members both inside and outside Europe say such an exception is discriminatory against airports outside the EU.

Monhla Hlahla, the chief executive officer of Airports Company South Africa, the host of this year’s world assembly, complains the regulation means passengers with connecting flights through European hubs cannot buy duty free buy liquor from South African airports. “It’s rendering us a secondary market,” she says.

George Muhoho, president of ACI Africa and chief executive officer of Kenya Airports Authority, also says the regulation is discriminating airports in developing countries. “I’m sure it’s not intended but you can possibly see it,” he says of the discrimination.

Niels Boserup, chairman of ACI and chief executive officer of Copenhagen Airport, says the new regulation is also negatively impacting EU airports because “passengers are bewildered” by the regulations and therefore are not purchasing duty free in Europe as well as well.  “This is a bureaucratic decision,” Boserup says. “We are not at all happy about this.”

In attempt to revive sales, Copenhagen airport shops are guaranteeing passengers that if their duty free items are confiscated they will be entitled to a full refund. Airports outside the EU cannot make such a guarantee because legally their liquor bottles are being confiscated at EU airports.

For example, passengers from South Africa that have purchased duty free liquor at the Johannesburg airport will have their bottles confiscated by security in Frankfurt if they connect to another flight at Frankfurt or any other EU hub. If their destination is their point of entry in the EU they will be able to keep their liquor, but airports and airlines are finding it difficult to communicate this message to passengers.

“There is a risk that passengers will be confused by the differences between intra-European and international allowances, and they will certainly be frustrated if items are confiscated at security checkpoints,” says ACI director general Robert Aaronson. “For concessionaries, it puts duty free sales at a particular disadvantage and any loss in concessionaire sales will in turn reduce critically needed revenues for airports.”

ACI is hoping airports are given the opportunity to work together and with other industry stakeholders to come up with new harmonised security regulations, including a regulation on a seal for liquid containers that governments around the world can trust. ACI is concerned if the current EU rule sticks, duty revenues will be reduced worldwide and its members will have no choice but to increase airport charges for airlines.

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