Duty-free sees first volume declines in 5 years

Trends across duty-free spirits markets reversed in 2013 as Asia Pacific reported the sector’s first volume declines in five years.

The Asia Pacific duty free market has reported the sector’s first volume declines in five years

According to new figures complied by the International Wines and Spirits Research (IWSR), the once-leading Asia Pacific duty free spirits market declined by 4.4% in 2013 following years of strong growth.

In particular, key markets including Singapore, South Korea, Thailand, Hong Kong, Taiwan and Malaysia recorded volume drops in the year compared to 2012.

According to the IWSR, the rate of the growth of the duty free spirits is slowing year-on-year, but this is the first time since 2009 that a region has seen loss in duty-free volumes.

However, the Americas and Europe continued their upward trend in the category, reporting “healthy growth”.

The Americas market saw the most rapid expansion, posting a 4.2% rise in volumes and a global market share of 19.7%, is now well ahead of that of Asia Pacific, at 17.7%.

Sales in Europe, grew more slowly in 2013 than in the previous year but the region increased its share of total volumes to 54%, reversing 2012’s drop in market share.

Eastern Europe and the Baltics was the fastest-growing sub-region last year, posting a 9.7% increase in sales, while a revival in tourism in southern Europe helped sales rise by 2%.

Central Europe and the Balkans also grew by 2%, but the Nordic and north-west Europe markets saw a slight drop in volumes.

In Africa and the Middle East, sales grew by 3% while Africa suffered a decline of 9.6% – the sharpest drop of the year – primarily due to political turmoil in Egypt.

Numerous drinks companies have reported declines in the Asia Pacific region as China continues its long-running campaign of austerity and political unrest affects sales in other countries.

Last year, the Scotch Whisky Association (SWA) said that surging Scotch whisky exports to the US, France and Spain had helped offset declines across Asia.

However, a recent report by Rabobank claimed that despite the slowdown of the spirits market in China, there is still a “growing appetite for assets” among Asian spirits companies.