No more duty free shops in the Czech Republic

01-04-2004

Hundreds of people went on one last shopping spree in the Czech Republic's duty free shops on Wednesday before they definitely closed down at midnight. By closing time the shelves with cigarettes and alcohol were bare.

Photo: CTKPhoto: CTK The closure of duty free shops in the Czech Republic is in line with EU regulations and it is only due to the strong influence of this particular lobby that they remained functional up until the eleventh hour. Duty free shops at airports and sales on CSA flights will remain in operation literally up until the last minute - closing just hours before the country joins the European Union. After May 1st the only passengers who will be able to avail themselves of the services of duty free shopping on flights are those bound for states outside of the EU. For the Czech authorities the closure of duty free shops means an extra billion crowns into state and local coffers and one headache less - since keeping an eye on possible tax evasions in duty free shops close to the border was never easy.

The owners of these shops are now struggling to remain in business. Sales of taxed goods will naturally send prices up and some expect sales to drop by 40 to 60 percent at the outset. Some have already announced lay-offs. But many have rallied and are planning a joint project called Travel Value - a chain of stores in the border areas which would cater in particular to Austrian and German customers for whom shopping in the Czech Republic is still much cheaper than at home and will remain so even after the country joins the EU. Another avenue to be explored is that of attracting the locals with brands and products unavailable in nearby stores. One way or another the next few months are expected to be tough and the old duty free stores will experience something that never worried them in the past - competition.

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