Dear Valued Customers

It is with regret that we have had to end our duty free service for passengers arriving or departing at Wellington Airport.

JR/Duty Free, who operates the duty free concession at Wellington Airport and the passout facility we use to distribute goods at the airport, had increased its charges to us by 240%. This means the cost to us of handing out the average bag of duty free at Wellington Airport would have increased from $13 to $44. Unfortunately this increase means that our service is not sustainable.

This has been a hard decision for us to make as we have had a 25 year association with Wellington Airport, firstly as an on-airport duty free provider from 1986 to 2009, and latterly by offering our pioneering online duty free service.

We are disappointed that Australian-based JR/Duty Free had decided to take this action.

Over the time we have been in the duty free industry, passout charges for duty free and tax free items at all New Zealand airports have been around $13 for an average bag of duty free goods. In Auckland and Christchurch airports, where the airport companies run the passout facility (instead of the duty free operator), those charges remain at around $13. JR/Duty Free believes they can justify a charge of $44 simply for placing our goods on a shelf for our customers to collect. We do not believe this is an acceptable charge. In fact in many cases this charge would exceed the duty being saved by the customer.

We are investigating all our options in an effort to find a way to continue servicing Wellington Airport and our Wellington customers. This includes making a complaint to the Commerce Commission. We have also asked Wellington Airport to provide us with a separate passout facility at the airport. Wellington Airport has been a strong and vocal proponent of competition in the aviation sector and our hope is that they will apply this same logic to the duty free sector and come forward with a workable solution.

As from today we will stop accepting orders for Wellington Airport for any travel date after the 28th of February. All orders that we have already processed will be available for pick up at Wellington Airport. Orders for Auckland and Christchurch Airports remain unaffected.

If you have any questions regarding your orders, please contact our customer service team at service@dutyfreestores.co.nz

What can you do to help?

If you feel strongly about competition in the duty free industry then you may wish to make your feelings known by writing to the following people:

• Wellington Airport CEO - Steven Fitzgerald
  mail@wellingtonairport.co.nz
• Wellington Mayor - Celia Wade-Brown (Wellington City Council is a one third owner of Wellington Airport)
  mayor@wcc.govt.nz
• Commerce Minister – Simon Power
  s.power@ministers.govt.nz

Yours sincerely

Grant Archibald
CEO
Duty Free Stores New Zealand