Tobacco ban would have 'serious effect' on Duty Free trade

Dubai Duty Free boss says plans to outlaw cigarette sales would harm business.

STILL STRONG: DDF managed to retain its position as the biggest single airport retailer in the world in 2009.

STILL STRONG: DDF managed to retain its position as the biggest single airport retailer in the world in 2009.

Plans by the World Health Organisation (WHO) to ban the sale of tobacco and cigarettes in airports would have a “serious effect on the duty free business” if they were implemented, the head of Dubai Duty Free said in a TV interview on Saturday.

“The WHO for example has been for many years trying to get the sale of tobacco and cigarettes in airports banned,” Colm McLoughlin, managing director of Dubai Duty Free (DDF), said in an interview on TV channel Dubai One.

“You know that might happen sometime in the future and if it did it would be a serious effect on the Duty Free business.”

However, while McLoughlin believes the ban would have impact, he is not overly concerned that it will be introduced any time soon.

“I don’t wish to be glib on it, but when you’re as old as I am and you look back and you realise you've been hearing those things for the last 40 years. They come and go and you deal with them as they come,” he said.

Last year was a tough year for many airport retailers, with DDF’s competitors seeing a drop in sales of more than fifteen percent. However, DDF managed to retain its position as the biggest single airport retailer in the world.

McLoughlin said he believes this was because DDF managed to capture a higher proportion of its departing passenger market.

“If you look at good airports around the world they sell generally to sixteen percent or eighteen percent of departing passengers. In the case of Dubai Duty Free we sell to more than 32 percent of departing passengers,” he said.

DDF is also aiming to capitalise on the opening of the Al Maktoum International Airport and Concourse 3 at Dubai International Airport in 2011. McLoughlin has forecast that DDF will be able to double its revenue over the next five to six years and achieve AED9bn ($2.45bn) worth of sales.

DDF is also expanding its business into other sectors and is currently in the process of building its own hotel. “Dubai Duty Free is building its own hotel. We will have a five-star hotel in operation. We will have 293 bedrooms and these are really five-star bedrooms. They are up to 55 square metres in space,” he added during the TV interview.

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