A bit of healthy competition

Arrive early for your flight - there's shopping to be done. Photo / Brett Phibbs

Passengers arriving at Auckland International Airport should find their duty free shopping taking a turn for the better in three months' time.

That's when Australian-based JR Duty Free will open for business, replacing Regency Duty Free in the departures area, and ending the DFS Galleria monopoly in the new arrivals area.

If - as you'd expect - the result is lower prices, a wider range of goods and better service, then the credit should go to the sometimes maligned Commerce Commission.

The airport company, which I've always suspected of quite liking its own monopoly position, decided a couple of years ago that from August this year, when Regency Duty Free's lease expires, it would move to having just one duty free retailer at the airport.

This, it argued, would actually mean a better deal for customers. "The move from two duty free operators to one operator will improve the delivery of duty free retail services to the public at Auckland Airport by enhancing the depth and breadth of goods offered."

The airport company then called a tender round for the monopoly rights and DFS won, promising to spend $18 million to redevelop the duty free shopping area, and presumably paying a higher rent.

When the new arrivals area opened last year, sure enough, DFS was the only outlet in sight, though Regency was allowed to continue for the time being in the departures area.

But then the Commerce Commission got involved, warning that this approach risked breaching the Commerce Act. The airport company initially rejected this and said it would challenge the commission. But later it backed down and reached an undertaking with the commission to drop the sole provider idea.

Commerce commission chairman Paula Rebstock, who has since moved on, said the commission was worried that with a single operator "consumers would have paid a higher price for duty free products" and "would no longer have choice."

With two operators back at the airport, she said, "travellers can once again benefit from effective competition in duty free retailing."

I couldn't agree more. Better still, JR Duty Free, which has stores in Australia and Israel, has a reputation as an aggressive competitor. It is promising travellers at Auckland airport "a fantastic duty free shopping experience". Let's hope so.

Pictured above: Arrive early for your flight - there's shopping to be done. Photo / Brett Phibbs