P&0SL finds way to recover duty-free revenue

P&0SL finds way to recover duty-free revenue

P&O STENA Line is attempting to claw back lost duty-free revenue by promoting passengers' opportunity to buy much larger amounts of duty-paid goods than before.

While ferries are in French waters, operators can sell unlimited amounts of alcohol and tobacco at cheap French duty-paid rates, so long as the goods are for personal use only.

Under the now-abolished duty-free system, there were strict limits on how much people could buy on board ferries.

As a result, P&OSL has frozen its prices at old duty-free levels and launched a press and television campaign promoting the new rules under the slogan 'No duty-free, no problem'.

Head of sales and Continental marketing David Silvey said: "The message is there is no change. Prices have remained the same in French waters, but you can buy unlimited amounts of goods now.

"We were a low-volume, high-margin operator previously. Now we are a high-volume, low-margin operator."

However, he admitted that P&OSL was still going to experience a blip financially as a result of the abolition of duty-free.

And although he claimed Customs and Excise had been helpful in the run-up to abolition, he blamed the European Commission for the last-minute panic in drawing up a regime to replace duty-free.

"We were having meetings with Customs and Excise in the last three weeks before abolition," he said. "We only got a meeting with the French authorities one week before the rules changed.

"It was only in the last week that we knew we would be able to sell duty-paid goods in French waters.

"The worst fear was that we would have to sell at British duty rates right across the Channel."

However, Silvey said the ferry operators were now in a stronger post-abolition position than airport operator BAA, because they can still sell goods at cheaper duty-paid rates while their ships are sailing in French waters.


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