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Cigarettes in Duty Free are cheaper: truth or myth?

There is a common belief that you can buy cigarettes really cheap in Duty Free. Let’s analyze in detail how this opinion was formed, whether it is true or a myth. And at the same time we will share techniques, how and in which countries you can buy cigarettes cheap in Duty Free.

What Duty Free is and what goods you can buy there

Duty Free is a duty-free zone of trade, where goods are exempt from part of taxes: excise duties, VAT and others. Usually Duty Free zone is located at checkpoints across the state border: in airports, train stations, ports. Most often you can get access to Duty Free only in the departure/departure zone, and you can buy something by presenting your boarding pass at the airport or a ship ticket at the port. Adherence to this important rule is closely monitored because Duty Free prices in Duty Free are subject to the condition that the purchased goods are exported out of the country.

Sometimes there are examples of Duty Free zones outside the border points – some cities and even small countries fully declare themselves Duty Free. The most famous example: the whole territory of Andorra is a Duty Free zone.

Is it true that everything is cheaper in Duty Free than in regular stores?

It’s partly true, partly not. Let us explain what the catch is.

Firstly, the cost of renting a store, which is included in the cost of goods, sometimes exceeds the discount, which is achieved due to the absence of part of the taxes.

Logically, all goods in the Duty Free zone should be cheaper than the same goods in regular stores. After all, there is no excise duty, VAT or other charges added to their price. But at the same time the cost of goods in Duty Free includes the cost of rent of stores (in the Duty Free zone it is often higher than in the country), salaries of employees, transportation costs, etc. It may happen that some types of goods in Duty Free will be even more expensive than in ordinary stores. But excisable goods (cigarettes, sticks, other tobacco products, alcohol) are usually cheaper in Duty Free than in other stores in the same country.

Secondly, the same goods have different prices in Duty Free of different countries.

The price is affected by the current exchange rate, the country of production and the price level in the country where Duty Free is located. So take into account that cigarettes or alcohol in Duty Free Norway will be cheaper than the average in Norway, but more expensive than in Duty Free Greece. And perhaps even more expensive than in regular stores in Ukraine.

Which goods are profitable to buy in Duty Free and which are not profitable?

It is most profitable to buy excisable goods because they are exempt from a whole group of taxes. Excisable goods include alcohol and all types of tobacco products (cigarettes, sticks, etc.). Often you can also save a lot of money on perfumes.
Among the goods that you should definitely not buy in Duty Free – souvenirs, food, any goods of local production.

In addition to the benefits, Duty Free is still interesting exclusive goods that are not found in regular stores. Many manufacturers produce limited collections, exclusive formats and flavors of their products specifically for Duty Free.

Do cigarettes really cost less in Duty Free?

Yes, indeed. As we wrote earlier, it is an excisable product, therefore, in duty-free stores it is exempt from a whole group of taxes, amounting to up to 70% of the price of a pack of cigarettes.

Note that cigarettes in Duty Free will be cheaper than in the stores of the country where the Duty Free is located. But this price may be higher than in Duty Free and even in the regular stores of other countries.

Cigarettes are cheapest in Nigeria ($1.20 per pack for Marlboro) and most expensive in Australia ($28.06 for a pack of Marlboro). Also among the countries with the lowest cigarette prices are Pakistan, Vietnam, Belarus, Kazakhstan, Ghana, Uzbekistan, Turkey, Iraq, Argentina, Algeria, Indonesia, Moldova, Colombia and Ukraine.

What does the For Duty Free Only sign mean?

All cigarettes intended for sale in Duty Free are labeled “For Duty Free Only”. Moreover, these cigarettes do not bear an excise stamp and the design of the pack may vary slightly. If you see such cigarettes on sale outside the Duty Free zone, do not buy them. They are either counterfeit or contraband.

If you see just unusual cigarettes with an excise stamp and no “For Duty Free Only” markings, they may be imported cigarettes.