Travel Retail Exclusives

Travel Retail Exclusives

A year in the life of the duty-free business

Travel Retail 21 Oct 2016 | Interviews | By Joe Bates

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All things considered it's not been a vintage year for the world of duty-free. In the UK, airport shopping has repeatedly come under fire in newspapers for ripping off travellers with overpriced goods. Incidents of alcohol-fuelled 'air rage' have become so numerous that the government has announced an overhaul of airport licensing regulations. Elsewhere, currency fluctuations, terrorist attacks and a slowdown in many emerging markets around the world have combined to make a very tough trading climate.

From a passenger's point of view, however, I maintain that the airport is still a great place to pick up a fantastic bottle of whisky whether you have a £50 to spend or £500. Now if price savings are your main motivation to buy, I suggest doing your homework before you travel. Many airports and airport shops have websites (and even smartphone apps) to help you check prices against the high street or online. In many cases it's also possible to pre-order online and then collect your purchase on your return trip, avoiding the hassle of having to carry a heavy bottle of whisky around with you on your travels.

The range of so-called 'Travel Retail exclusive' single malts, the majority of them non age statement releases, has continued to grow over the past year. Not every example is a winner, that's for sure. There are too many youthful, immature whiskies out there on airport shelves with price tags they don't warrant. I'm still a fan of exclusives as a concept, however. They give travellers a real reason to buy. Wherever possible, I recommend taking advantage of in-store tastings and letting your taste buds decide whether you're being hoodwinked or not.

What's also pleasing to see is that small, medium sized and independent players are now following in the footsteps of the larger multinational players and releasing their own Travel Retail ranges. For instance, the Loch Lomond Group has announced it is launching a new Travel Retail range from the Loch Lomond Distillery, which is notable for being one of the few whisky distilleries in Scotland which makes both malt and grain whisky.

The new four strong collection is certainly diverse, comprising The Loch Lomond Single Grain, which is made with malted barley distilled in a Coffey style column still; Loch Lomond Signature, a blend matured using the company's 100 cask solera ageing system; Loch Lomond 12 Years Old single malt, and finally, Loch Lomond Inchmurrin Madeira single malt, as the name suggests, finished in madeira casks. Prices are not too steep either, starting at £27 and rising to £75.

Tobermory, the only distillery on the windswept Hebridean island of Mull and producer of the unpeated Tobermory and the robust, smoky Ledaig, is also jumping on the exclusives bandwagon. It has just released Tobermory 21 Years Old into duty-free at £310 - a dry, slightly oily malt with hints of citrus, spice, dried fruits and spice. Also arriving into duty-free from the distillery is Ledaig 19 Years Old Marsala Finish at £125. It offers notes of citrus fruit, berries and grapes with hints of sweet toffee and dark chocolate before developing into a peaty blast of black pepper and bonfire smoke.

The major Scotch whisky players haven't been sitting idle, of course, over the past year. Diageo, the biggest of them all, has been pushing Johnnie Walker, the best selling Scotch whisky, like never before, opening up the hugely impressive Johnnie Walker House outlet at Amsterdam Schiphol Airport. Three years in planning, it joins a growing network of branches that includes Taipei, Mumbai and Singapore airports, as well as in the Asian cities of Beijing, Shanghai, Chengdu and Seoul.

The impressive design of the two storey Dutch store is inspired by the voyage Alexander Walker II, the grandson of founder Johnnie Walker, first took to the Netherlands in 1913. The ground floor stocks a wide range of Travel Retail exclusive Johnnie Walker whiskies from the widely available (and reasonably priced) Johnnie Walker Explorers' Club Collection to very rare and collectible bottles such as the John Walker & Sons Diamond Jubilee, a blend of 60-year-old grain and malt whiskies dating from 1952, the year Queen Elizabeth II came to the throne.

Another highlight of the whisky on offer at the new store is the striking Johnnie Walker House Blue Label Casks Edition - Schiphol Limited Edition, which is likely to become a very popular collector's item. The whisky comes in a ceramic Delft blue bottle beautifully illustrated by Merjin Hos, which depicts the Striding Man once again. This time he's travelling from Scotland in a large wooden clog surrounded by typically Dutch tulips, windmills and bicycles.

As for Pernod Ricard, it's been targeting the growing Indian duty-free market where shiny new terminals and passenger numbers are both springing up an impressive rate. In March the company opened a Luxe boutique at Mumbai's Chhatrapati Shivaji International Airport Terminal Two where high-end Scotch blends and malts such as the $3,500 (£2,930) Chivas Regal The Icon, Royal Salute 38 Years Old, The Glenlivet 25 Years Old and Ballantine's 30 Years Old, were showcased. The store features a clever 'Digital Interaction Area' were shoppers can learn about many of the whiskies on sale by placing the bottle on the screen. Using radio frequency identification (RFID) technology, the system will then display information about the bottle they have picked up.

Looking ahead I can see digital technology of this sort playing a greater and greater role in the typical Travel Retail shopping experience. For instance, in June this year William Grant & Sons offered passengers the opportunity to experience a 'virtual tour' of the Glenfiddich Distillery at Aelia's stores in Paris Charles de Gaulle airport by getting them to wear Oculus Rift virtual reality headsets. The entertaining 'Journey into the Mind of the Malt Master' experience included amazing drone footage above the Dufftown distillery and CGI created views from inside a mash tun.

The other emerging trend I see making an impact in 2017 is the growing presence of Japanese whiskies. Stocks are still limited, of course, but thanks to exclusive launches from Beam Suntory such as last year's light, floral Hibiki Japanese Harmony Master's Select and this year's The Chita, a soft honeyed grain whisky, the prospects for this fledgling category look very bright. For sure Bourbon and Irish whiskey are also set to grow their market share, but neither quite have the hot-ticket status that Japanese whisky does at present.

Finally, no review of the last year in duty-free is complete without a word or two about Brexit. Major Scotch whisky producers such as Pernod Ricard and Diageo have gone on record stating their opposition to the UK's decision to leave the EU, citing possible tariffs, higher costs and more red tape for exports. However, from a travel perspective, the UK's decision to go it alone may have some positive benefits as the UK could effectively become a 'third-party country' in the same fashion as Norway and Switzerland, allowing the return of duty-free sales for those travelling to and from UK airports to European ones, and

the expansion of convenient airport arrivals duty-free.

In theory travellers could benefit from considerably lower duty-free prices on whiskies, but a few caveats need to be mentioned. Firstly, the generous duty-paid allowances that currently exist for cross-border shoppers would disappear. That means, for instance, that UK ferry passengers would no longer be able to fill their car boots up with cut-price booze as they do. A much more parsimonious duty-free 1 litre spirit allowance would apply (unless the UK government decides to expand the allowance; other countries allow passengers to buy as many as four 1 litre bottles of spirits).

The truth is - there is very little flesh on the bones in terms of detail. Nor is the return of duty-free shopping going to happen anytime soon. The UK government has just announced triggering Article 50, which would kick off two-years of negotiations with the EU about leaving. And even then Whitehall mandarins are likely to have far more important trade matters to sort out before duty-free shopping comes to the top of their inbox.
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