Aussie price hiker tells Kiwi company to harden up

The Australian duty free company that prompted a Commerce Commission complaint with a price hike for its services says the fee increase is fair.

JR/Duty Free says is “surprised” at the decision taken by internet duty free retailer, Duty Free Stores (DFSW), to close down its business for passengers travelling through Wellington Airport, because of the fee adjustment.

“The single duty free provider status at Wellington Airport has been previously considered by the New Zealand Commerce Commission,” JR/Duty Free executive director Evelyn Damos said.

“Like the duty free operator preceding us, JR/Duty Free has provided a collection service at Wellington Airport that allows other duty free operators’ customers to collect their goods while travelling through Wellington.

“For many years there has been no adjustment to this access fee, however the costs associated with operating this service have increased over this time, during which DFSW has enjoyed the benefit of a very low access charge.”

She said this was the first time JR/Duty Free had adjusted the fee for DFSW to access its premises and the companies had been discussing it for months.

“The new fee framework varies across a variety duty free products; for example in some products there has been no fee movement at all. However there is no blanket fee increase to the extravagant levels claimed by DFSW.”

“The adjusted fee has been based on sound methodology and expert third party evaluation from a specialist economic consulting firm.

“The evaluation found the new fee levels proposed to be fair, and the methodology used meets the latest standards approved by the Supreme Court. On that basis we are surprised at DFSW’s decision to cease providing services to travellers through Wellington.”

JR/Duty Free would “happily” discuss the matter with the Commerce Commission. 

In response Duty Free Stores New Zealand chief executive Grant Archibald has put out a statement disputing JR/Duty Free's version of events.

"Fact: JR Duty Free have increased the price of handing out ALL duty free goods at Wellington Airport by 240%.

"Fact: The only categories JR Duty Free have not increased the charges for are jewellery, electronics and watches. These are tax-free items not duty free items.

"Fact: 97% of the items sold by Duty Free Stores New Zealand for distribution through Wellington Airport are duty free and therefore fall within the 240% price increase.

"Fact: The fee charged by JR Duty Free is a percentage fee. Therefore as prices go up so does their compensation for handing out the goods. Cost increases are a poor explanation for a 240% price increase.

“If the travelling public has the facts they can draw their own conclusions about JR Duty Free’s attitude towards competition. Last week passengers travelling through Wellington Airport had a choice about what duty free service they could use, now they have none,” Mr Archibald said.