Sparkling wine sales best performer in duty free channel, up by 6%

Global duty free sales of still wine increased by 3% on average each year since 2013 to reach 6.5 million 9 litre cases, according to Wine Australia.   

However, sparkling wine has seen even strong growth in the channel, up by 6% to 1.6 million 9-litre cases, while fortified wine has grown 2% to 212,000 9-litre cases. Total wine sold through duty-free represented 0.2% of all wine sold globally based on volume, but accounted for almost a quarter of global duty free wine and spirit sales in 2017, at around US$2.7 billion according to the International Wine and Spirit Record (IWSR).    

Source: Wine Australia

Buying wine via duty free continues to be one of the top 15 wine buying channels, with airports alone accounting for 55% of duty free wine sales.   In Singapore, swingeing taxes on alcohol make duty free a particularly attractive option, and buying wine via duty free was the most popular channel according to a survey by Wine Intelligence, with 66% of Singaporean wine drinkers choosing to purchase wine via this route.

However, in the US where the average cost of alcohol is low compared to other commodities, buying wine at a supermarket was the most popular channel, with 52% of respondents reporting buying wine there, followed by the liquor store at 49%. Buying in duty free was at the bottom of the list, sitting in 13th place and with only 5% using this channel in the past six months.  

Last year the duty-free travel retail sector generated US$75.7 billion in global sales, which was up 9.2% on the previous year, but this growth was driven mostly by perfumes and cosmetics in the Asia Pacific region.  

Wines and spirits made up 15% of global duty-free and travel retail sales to US$5.9 bn according to Generation Research and grew by more than 13% compared to the first half of 2017. In 2017, this category was worth US$11.6 billion for the full year.    

While traditionally duty free has been a channel where travellers could snap up luxury brands at cheaper prices than at home, this is not the case in some countries such as Australia, where often duty free actually proves to be more expensive than other channels.  

The former president of the Tax Free World Association Erik Juul Mortensen conceded last year that duty free was facing a number of challenges, including “geopolitical hurdles that can hamper people’s ability to travel and ramp up the price of goods and e commerce, which have price under permanent scrutiny.