Peace Arch Duty Free Shop in British Columbia, Canada, is petitioning the B.C. government to level the playing field for border retailers by eliminating liquor tariffs on duty free stores, even as political disputes with the U.S. continue.
In a statement sent to TMI by Peter Raju, President of Peace Arch Duty Free Shop Inc., Raju says that the recent call by B.C. Premier David Eby urging British Columbians not to visit the border states of Washington, Oregon and California will once again have a detrimental impact on British Columbia’s duty free industry.
According to Raju, the Premier made a similar request last February, which resulted in an approximately 80% decline in business for the border duty free industry and forced the company to operate with a skeleton staff until recently.
Raju says the government’s latest call comes at a particularly difficult time, as the industry has been working to restore sales and staffing after the previous downturn. Peace Arch had only recently returned to its original staffing levels.
Peace Arch Duty Free is currently investing C$6.5 million on complete renovations to its retail interior and surrounding landscaping, creating a park-like setting on the Se-Mi-Ah-Mu First Nation land. This investment will allow the company to feature various new products from international suppliers who are working to avoid numerous tariffs on their industry. Peace Arch is positioned to capitalize on these opportunities, particularly those created by U.S. government tariffs.
Raju is calling for the provincial government to immediately create a level playing field for B.C. duty free operators by removing its 20% tariff (mark-up) and promote cross border travel which affects tourism in both British Columbia and across the border. Canada is the only country to impose this level of taxes on the duty free industry.
“If the government is seriously concerned about American liquor products entering British Columbia, it should consider imposing tariffs on its liquor imports rather than restricting consumer choices,” said Raju. “This would generate revenue while allowing consumers to make their own purchasing decisions, rather than being dictated by Premier Eby. Especially since his government has failed to provide any support or monetary support to the industry.”
Raju argues that the B.C. Liquor Distribution Branch is continuing to lose millions of dollars in its distribution sector and should not restrict consumer choices – such as removing U.S. liquor that had previously been paid for. The Liquor Board’s involvement in the importation and distribution of duty free liquor has limited the industry’s ability to grow and provide consumers with competitive pricing and product selection, he says.
“The markup imposed on duty free liquor defeats the very purpose of duty free shopping,” says Raju.
“It puts B.C. duty free operators at a disadvantage compared with competing businesses on the U.S. side of the border, where similar restrictions and markups do not apply.”
The B.C. duty free industry has repeatedly urged the government to eliminate the 20% markup, making border stores more competitive and encouraging Canadians to shop in B.C. rather than across the border.
Raju says the issue also has an important cross-border community dimension.
“In recent years, American residents in Washington State and Oregon have expressed their support for B.C. duty free operators. They remind us that we are neighbors, that they enjoy visiting British Columbia, and that they hope British Columbians will reciprocate so that border businesses, communities and friendships can continue to flourish.”
Raju says he has requested multiple meetings with government representatives to discuss the challenges facing the duty free industry, but there has been no communication from the government in spite of Eby stating that industries have his support.
Raju emphasizes that he is asking for a fair and competitive business environment, “We are ready to work with government to find solutions that support local businesses, generate revenue and give consumers better choices.”
See a full report on Peace Arch Duty Free in the upcoming Travel Markets Insider Cannes magazine.
