The Land of the Duty Free (classic)

Summary

Planet Money: The Land of the Duty Free (Classic) – Detailed Summary

Release Date: January 15, 2025

Hosts: Jesse Baker and Karen Duffin

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1. Introduction to Duty Free Shops

In the opening segment, Jesse Baker sets the stage by sharing a personal anecdote from Shannon Airport in Ireland. Observing a photograph of Dr. Brendan O'Regan alongside the President of Ireland, Baker highlights O'Regan's pivotal role in developing Shannon International Airport and, most notably, establishing the world's first duty free shop. This introduction underscores the profound impact a single entrepreneurial idea can have on global travel and commerce.

Notable Quote:

Jesse Baker [00:34]: "Don't just understand the economy – understand the world."

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2. Brendan O'Regan and the Genesis of Duty Free

Karen Duffin delves into the history of duty free shops, tracing their origins back to the 1940s. During this era, transatlantic flights were lengthy and uncomfortable, necessitating stops for refueling. Shannon Airport became a primary refueling point for flights crossing the Atlantic, attracting an influx of international travelers, including celebrities and political figures.

Brian O'Connell, a local businessman, elaborates on the significance of Shannon Airport as a gateway to Europe during the 1940s and 50s, emphasizing the necessity to enhance amenities for the high-profile passengers frequenting the airport.

Notable Quote:

Brian O'Connell [04:19]: "In the 40s and 50s, every famous person that crossed the Atlantic almost certainly wound up going through Shannon."

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3. The Birth of the Duty Free Concept

Enter Dr. Brendan O'Regan, a former bartender and multi-faceted entrepreneur. Recognizing the demand for high-quality refreshments among weary travelers, O'Regan was tasked with improving the passenger experience. Instead of traditional continental cuisine, he introduced Irish specialties, cleverly branding them with local flair—e.g., "Carrie Lamb," "Dublin Prawns," and "Limerick Butter."

O'Regan's innovative approach extended beyond food. He is credited with creating the very first Irish coffee, blending whiskey with coffee and topping it with local cream—a now-celebrated beverage.

Notable Quotes:

Jesse Baker [05:52]: "O'Regan had this knack for promotion from the very beginning."

Karen Duffin [06:19]: "O'Regan created the very first Irish coffee."

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4. Leveraging Tax Loopholes for Economic Gain

O'Regan identified a historical loophole that allowed sailors to bring alcohol on board ships without paying duties. Capitalizing on this, he approached the Irish government with a proposal: airline passengers, akin to modern-day sailors, should also benefit from tax-free purchases. This would not only offer financial advantages to travelers but also promote Irish goods globally.

Despite initial resistance from Irish officials concerned about lost tax revenue and the exclusivity of benefits for affluent travelers, O'Regan successfully convinced the government to permit duty free sales at Shannon Airport in 1950.

Notable Quote:

Jesse Baker [07:55]: "He went to the Irish government and he said, essentially, what are airplanes but boats of the sky?"

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5. The Expansion and Global Adoption of Duty Free Shops

O'Regan's duty free shop at Shannon Airport quickly became a success, necessitating expansion to accommodate the growing demand. This pioneering model caught the attention of international businesses and travelers alike. Iconic brands like Toblerone recognized the potential, with Tom Armitage of Mondelez International noting:

Notable Quotes:

Tom Armitage [13:55]: "If you thought of duty free as a country, it would be the ninth biggest chocolate market in the world."

Jesse Baker [10:23]: "It was nothing really. Little mini bottles of whiskey and trinkets and cheap stuff. But the important point here is that everything was always taxed back in those days."

By 1957, Amsterdam had opened the second duty free shop globally, followed by the first U.S. duty free store in Hawaii in 1962 by DFS. This rapid expansion transformed duty free into a $70 billion industry by 2025, with a significant portion attributed to confectionery sales.

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6. The Economics and Psychology Behind Duty Free Shops

Shifting focus to the modern-day implications, Jesse Baker and Karen Duffin explore whether duty free shops genuinely offer savings. While some products, like cigarettes, remain significantly cheaper—often under $5 a pack compared to three times that price in cities like New York—other items present mixed deals.

Baker shares his personal observations from Milan Airport, noting that while certain alcohol brands like American whiskeys were cheaper, products like Courvoisier and Toblerone were more expensive than their U.S. counterparts. The inconsistency in pricing is attributed to various factors, including expensive airport retail spaces and fluctuating exchange rates.

Notable Quote:

Jesse Baker [20:14]: "It depends. I know that is not the answer you want to hear. I will tell you that tax free cigarettes are criminally cheap."

Karen Duffin summarizes the challenge: while the initial duty free model offered genuine bargains, the industry's expansion has led to a "race to the bottom." Airports now host expansive and luxurious duty free spaces, often eroding the original tax-free advantage as prices normalize due to competition among retailers.

Notable Quote:

Karen Duffin [21:07]: "What was your verdict on duty free?"

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7. The Legacy of Brendan O'Regan

Despite the global proliferation of duty free shops, Brendan O'Regan did not amass personal fortune from his creation. Instead, he focused on broader economic and peace-building initiatives, such as establishing tax-free manufacturing zones and fostering trade-based peace exchanges between the Republic of Ireland and Northern Ireland. His efforts are credited with contributing to the peace process in the region.

Brian O'Connell, author of O'Regan's biography, asserts that without O'Regan's pioneering efforts, the duty free industry might never have developed, highlighting the enduring impact of his entrepreneurial spirit.

Notable Quote:

Brian O'Connell [16:12]: "If he hadn't done it, there would be no airport duty free business in the world."

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8. Conclusion: The True Value of Duty Free

The episode concludes by pondering the true value of duty free shops. Initially a boon for travelers and a strategic economic move for Ireland, the concept has evolved into a vast retail enterprise. While certain products still offer genuine savings, the overall benefits are now skewed towards retailers and airports rather than consumers or governments.

Final Notable Quote:

Jesse Baker [21:15]: "Well, here's my theory on this. It's that, you know, when Ireland first started duty free, it was this true bargain for the flyer. And Ireland got all these benefits from the extra tourist business."

---

Key Takeaways

• Brendan O'Regan's Innovation: The inception of duty free shops revolutionized airport retail, leveraging historical tax loopholes to offer travelers exclusive benefits.

• Economic Impact: Duty free shops have grown into a multi-billion-dollar industry, significantly influencing global travel and commerce.

• Psychological Appeal: The allure of exclusive, tax-free shopping creates a unique consumer experience, encouraging higher spending.

• Modern Challenges: The expansion of duty free has diluted the original cost-saving benefits, making it essential for consumers to critically assess their purchases.

• Legacy Beyond Retail: O'Regan's contributions extended to fostering economic zones and peace initiatives, highlighting the broader societal impacts of entrepreneurial ventures.

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This episode was produced by Jesse Baker, Karen Duffin, and the Planet Money team, featuring insights from Brian O'Connell and Tom Armitage.

Transcript

[Announcer]

This message comes from Spectrum Business, who provides fast, reliable Internet, phone, TV and mobile services to help unlock the unlimited potential of your small business. Learn [e-mail] Business this episode originally ran.

[Jesse Baker]

In 2018 and it is likely to save you money and make you giggle in 2025.

[Karen Duffin]

This is Planet Money from NPR.

[Jesse Baker]

Hey, I'm just leaving a voice memo for myself. I'm in the Shannon Airport in Shannon, Ireland, on my way back to the United States, to New York. There is this picture wall, giant pictures of all the famous people who have come through here. So you know, they have like John F. Kennedy and there's Fidel Castro and Boris Yeltsin. And there is one photo that was sort of amazing. There's a picture of the President of Ireland and next to him is someone called Dr. Brendan O'Regan. And he's sort of out of focus. You can see he's wearing a natty suit. He's got a nice little pocket square. And it says that Dr. O'Regan was the person responsible for this airport, for basically developing the Shannon International Airport. And most importantly, he created the world's first airport duty free shop. You know the duty free shop, the place where you get the perfume and the chocolates and all the liquor. First one was here and before I get on the flight, I just wanted to rush quickly over and take a look at what was the world's first duty free. A lot of scarves, little jewelry. Where's the perfume?

[Announcer]

Hello, darling.

[Jesse Baker]

How's it going? This is Jesse Baker. I'm buying sheep. Oh, they're adorable.

[Announcer]

Cliche, but my children don't judge.

[Jesse Baker]

I think duty free shops are supported on people who forgot to get gifts for their children.

[Announcer]

I didn't forget.

[Karen Duffin]

I just been busy.

[Jesse Baker]

You getting them at the duty free shop. Hey, no shame here. I bought chocolates for my kids.

[Announcer]

206 to New York.

[Jesse Baker]

That's my flight. I gotta go. Hello and welcome to Planet Money. I'm Robert Smith, here with international jetsetter and former duty free addiction, Karen Duffer.

[Karen Duffin]

This is true. Back in my corporate days, I did spend a lot of time and money in duty free shops.

[Jesse Baker]

It seems like these days we're locked in this epic battle between those who want free trade across borders and those who want to put up barriers. An early skirmish in this economic war happened at an airport along the banks of the Shannon river in Ireland.

[Karen Duffin]

Today on the show we have the story of Brendan O'Regan, a former bartender turned entrepreneur who said, let the world have its Courvoisier tax free and we'll.

[Jesse Baker]

Answer the question I know that I have asked over and over again. Are we really saving any money at the duty free shop?

[Announcer]

This message comes from Charles Schwab when it comes to managing your wealth, Schwab gives you more choices like full service, wealth management and advice when you need it. You can also invest on your own and trade on thinkorswim. Visit schwab.com to learn more. This message comes from Charles Schwab. When it comes to managing your wealth, Schwab gives you more choices like full service, wealth management and advice when you need it. You can also invest on your own and trade on think or swim. Visit schwab.com to learn more. This message comes from Spectrum Business Small business owners put in unlimited hours, unlimited effort and unlimited passion. Why? Because only you know that your business has unlimited potential. That's why Spectrum Business provides fast, reliable Internet, advanced WI fi with security shield and an unlimited mobile line all for one low price. Built to work for a small business budget. Connect your business to unlimited possibilities. Learn [e-mail] business the story of Duty.

[Jesse Baker]

Free starts with a bit of Irish luck.

[Karen Duffin]

In the 1940s when people were traveling from New York to London or Paris, they were in these propeller planes and to refuel they had to land in the first Runway they saw after crossing, and that was western Ireland, County Clare along the Shannon River.

[Jesse Baker]

And so here was this former mud flat that all of a sudden became the grand gateway to Europe.

[Brian O'Connell]

In the 40s and 50s, every famous person that crossed the Atlantic almost certainly wound up going through Shannon.

[Jesse Baker]

So movie stars, presidents, prime ministers, kings and queens, they all landed at Shannon.

[Brian O'Connell]

They all had to land at Shannon Airport.

[Jesse Baker]

Brian O'Connell was a businessman in the region, still lives there, and he says that everyone realized pretty quickly that they needed to upgrade the local amenities for all these movie stars. In those days, the airplane ride from the United States was long and uncomfortable and bumpy. Sometimes it was even in these flying boats, basically planes that would land on water.

[Brian O'Connell]

You were probably tired, you could be cold. Because obviously particularly the flying boats flew quite low over the Atlantic compared with plains today. So people were looking forward particularly to good food and good drink.

[Karen Duffin]

This is when our duty free hero, Dr. Brendan O'Regan enters the story.

[Jesse Baker]

Don't let the doctor part fool you. It is an honorary degree. Brendan O'Regan had been a bartender, a hotel clerk, a caterer, and when the Shannon airport realized that all the movie stars were coming, they needed someone quick. They hired Brendan O'Regan to feed them.

[Brian O'Connell]

He was A man who was very soft spoken, quiet, calm. There was no nonsense about him.

[Karen Duffin]

When the movie stars got their pictures taken, you could sometimes see O'Regan in the background. He's a dapper man with sandy hair slicked back.

[Jesse Baker]

O'Regan had this knack for promotion from the very beginning. Rather than continental cuisine, which is what they were serving at airports, everywhere, he served Irish food. But he dolled it up with all these place names. Oh, look, this is Carrie Lamb and Dublin prawns and Limerick butter. And when he would serve whiskey in the coffee, he topped it off with this thick layer of local cream and he named it the very first Irish coffee. Wait.

[Karen Duffin]

O'Regan created the very first Irish coffee.

[Jesse Baker]

It's delicious. Irish coffee is the best there at the Shannon airport. And he ran this little kiosk next to the restaurant. And it was. It was nothing really. Little Mini bottles of whiskey and trinkets and cheap stuff. But the important point here is that everything was always taxed back in those days.

[Karen Duffin]

Well, not everything, because O'Regan noticed that there was this loophole. In the British Isles, it had been a tradition that sailors about to head off on a long sea voyage could bring on board rum and whiskey without paying duties.

[Brian O'Connell]

Yeah.

[Jesse Baker]

Which I don't know. Why would they do that? Just to keep the crews happy?

[Brian O'Connell]

I think that's right. Yeah. I suggest that must have been an element of it. Or have them sleep off a lot of the time. I don't know. But that was a tradition that went way back to, I think, 17th century or way, way, way back, hundreds of years.

[Jesse Baker]

And strangely, this loophole was still in effect in O'Regan's day. In 1950, he was on a trip to the United States and he decides not to fly back to Shannon, but to take a cruise ship, the SS America. And O'Regan notices when he's on board that the alcohol on the ship is way less expensive than the stuff he's been serving at the airport.

[Brian O'Connell]

All this alcohol and tobacco has been.

[Jesse Baker]

Sold duty free because they were in international waters. This is like the law of the high seas.

[Brian O'Connell]

They were on the high seas. So he said, wait, now we're competing with these guys by air. It's not fair that I can't have the same tax advantage they had.

[Jesse Baker]

And this was the genius of Brendan O'Regan. He went to the Irish government and he said, essentially, what are airplanes but boats of the sky?

[Karen Duffin]

That's kind of true. True.

[Jesse Baker]

And what are airline passengers but modern day sailors of the clouds?

[Announcer]

Right.

[Jesse Baker]

Do they not also deserve Their tax free rum and perfume and Haribo brand gummy bears.

[Karen Duffin]

There were not Haribo brand gummy bears.

[Jesse Baker]

His exact words are lost to history. But we do know that a lot of people in the Irish government said, wait, tax free? Are you kidding me?

[Brian O'Connell]

Because every department of finance, every customs people worldwide resist giving away tax revenue.

[Jesse Baker]

Sure.

[Brian O'Connell]

And particularly in this case, morally. The idea, who's benefiting out of this? Wealthy people who fly the Atlantic in planes. I mean, that's only a tiny percentage of the population. Why should we do any good for them?

[Karen Duffin]

The government stood to lose a lot of money if they went with this tax free scheme. Because in some cases, when you buy alcohol, most of the price tag is actually taxes.

[Jesse Baker]

Yeah. For example, I mean, just even taking today, if you buy a bottle of wine down the street here in the United States, there is a duty added to the cost of that wine if the wine comes from overseas. But even if the wine is made in the United States, there is a federal excise tax on alcohol added to the price. And then each and every state adds their own excise taxes to the wine.

[Karen Duffin]

And this is all hidden in the price tag. Plus then when you bring the wine to the counter, often you have to pay sales tax again on the total.

[Jesse Baker]

Brendan O'Regan said to the Irish government, yes, yes, you will lose some money in taxes, but in the long run.

[Brian O'Connell]

If we do this, we'll attract people to come to Shannon. If we attract people to come to Shannon, they'll see Ireland. Some of them might decide to go and visit the place. We'll make people aware of Irish goods. Irish whiskey was not properly. It was miniscule in the US compared with Scotch whiskey. And we'll make money because I'm the franchisee of this government owned airport and you're making the profits. So I'll make you a lot more profits and particularly I'll make you dollar profits.

[Jesse Baker]

Dollar profits.

[Karen Duffin]

So Ireland said, all right, let's try it. But we are keeping you on a very short leash.

[Jesse Baker]

O'Regan opened the first duty free shop in the Shannon Airport in 19.

[Karen Duffin]

Okay.

[Jesse Baker]

It was only for passengers. And he did this trick that you will recognize from today. It was located between the lounge and the restaurant. So you had to walk through it to get to anything.

[Karen Duffin]

I hate that.

[Jesse Baker]

No, this is brilliant. And just like he had promised the government, he featured local foods and crafts. I saw an early photo hanging in the airport. There's a picture of Gene Kelly, the old dancer from the old days buying butter or cheese or something. And he's at the duty free. And they're selling what looks like ham, bacon, honey, cheese, jam and eggs.

[Karen Duffin]

Wait, was this like a farmer's market in the airport?

[Jesse Baker]

I think the local stuff was kind of for show because, honestly, from the beginning, this was all about cigarettes and alcohol. Whiskey and smokes were apparently one third the price you would pay outside the airport. It was so cheap that the Irish government was paranoid that Irish gangs would try to smuggle alcohol out of the airport. I mean, you could make a fortune. Right. They required O'Regan to take inventory three times a day. He had to account for every single bottle. If he accidentally dropped or misplaced a single bottle, he would have to pay all the taxes on it.

[Karen Duffin]

And this was a hit within just six months. O'Regan had to expand the store because all of these other manufacturers wanted their products in there, too. I mean, this was a captive market of rich people.

[Jesse Baker]

Sure.

[Karen Duffin]

On vacation.

[Jesse Baker]

Yeah.

[Karen Duffin]

So in came the Leica cameras and the Omega Swiss watches and even relatively.

[Jesse Baker]

Inexpensive products discovered that they could get some of that airport glamour by just getting placed between the Chanel no. 5 and the cuckoo clocks. At least that's what Mr. Tobler of Switzerland thought.

[Tom Armitage]

Mr. Tobler was a real person. Wait, Mr. Tobler? Theodore Tobler. Theodore Tobler, who created the chocolate bar?

[Jesse Baker]

Not just any chocolate bar, the Toblerone. A triangular prism of deliciousness. It was sold in that very first Shannon duty free shop. Tom Armitage is an executive with Mondelez International, which owns Toblerone.

[Tom Armitage]

The word comes from the combination, obviously, of his surname, Tobler, with the Italian word torone, which means. It's kind of like nougat. It's kind of like that nutty, chewy, toffee kind of complexion.

[Jesse Baker]

We'd say nougat. Nougat.

[Tom Armitage]

Sorry, that.

[Jesse Baker]

I don't think I've ever said it out loud.

[Tom Armitage]

Nougat. I just called it nougat. But we can call it nugget if you.

[Jesse Baker]

Nougat.

[Karen Duffin]

Anyway. But I know that duty free was a huge break for the chocolate bar, which is odd because there aren't really heavy duties and taxes on chocolate, not like alcohol. But it did fit the duty free aesthetic. It was kind of weird, fancy looking, yet you could buy it with leftover change in your pocket from what you didn't spend on that Swiss watch.

[Jesse Baker]

Exactly. It would take a few more years for Toblerone and the duty free concept to spread worldwide. All these international delegations would visit O'Regan's shop and they saw how much he was making and they thought Wait a minute. Anyone could do this. Amsterdam opened the second duty free shop in the world in their airport in 1957.

[Karen Duffin]

In 1962, a private company, DFS, opened the first duty free shop in the United States in Hawaii.

[Jesse Baker]

Tom Armitage, the Toblerone guy, says that the numbers just took off from there. Duty free stores will do $70 billion worth of business just this year. Wow. 5 billion of that is candy. And Tom will give you the chocolate stats all day long.

[Tom Armitage]

If you thought of duty free as a country, it would be the ninth biggest chocolate market in the world.

[Jesse Baker]

Wow. Okay.

[Tom Armitage]

The ninth biggest chocolate market in the world, effectively just behind France and just ahead of India.

[Jesse Baker]

So more people buy chocolate and duty free than buy chocolate in India by value. That's right.

[Karen Duffin]

These days, Toblerone makes special chocolate bars specifically designed for duty free. And it's actually, if you think about it, the perfect place for test marketing and data gathering.

[Jesse Baker]

It's the one kind of store where you know which customers will show up when. So if the flight from Paris to New York, JFK takes off at 1:28pm, then the duty free store is filled with Americans right at noon and you can test new products on them.

[Tom Armitage]

So we've done dark chocolate, Toblerone milk chocolate, Toblerone crunchy almond, Toblerone fruit and nut, Toblerone messaging. For example, on the Toblerone sleeve, Wait.

[Jesse Baker]

Wait, what does the message say? I forgot to get you a gift in Paris and here's a Toblerone I got at the airport.

[Tom Armitage]

It would say, for example, I love you or thinking of you.

[Jesse Baker]

The duty free store concept, the idea behind it became so big, so powerful in marketing that people sort of forgot about that original duty free shop in the Shannon airport. And once long range passenger jets were invented, not as many people needed to stop over in rural Ireland for an Irish coffee.

[Karen Duffin]

And because Brendan O'Regan didn't try to own the concept, he sadly did not become a duty free billionaire. But other businessmen would.

[Jesse Baker]

But you know, O'Regan remained a hero. He helped set up tax free manufacturing zones. He became obsessed with the way that trade could help world peace. And he set up all of these two way peace exchanges between the Republic of Ireland and Northern Ireland that people say were really instrumental in creating the peace process there.

[Karen Duffin]

Brian O'Connell has just published a new biography of Brendan O'Regan. So he's a little biased a tad. But he believes that that first little store in the airport changed the world.

[Brian O'Connell]

If he hadn't done it, there would be no airport duty free business in the world. It wouldn't have taken off, in my opinion. Really, the argument that, you know, why are we doing favors for wealthy people who are traveling? Would have been a big factor.

[Jesse Baker]

When you put it that way. Who would approve that now?

[Brian O'Connell]

Yeah, you'd have shops at airports, but the duty free industry would not have developed.

[Jesse Baker]

It was O'Regan's gift to all of us travelers, but exactly how generous a gift was it? We'll have the answer after the break.

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[Jesse Baker]

So that was the history of duty free, but now the psychology of duty free. Because when I walk through these places in airport, there is this strange feeling that comes over me. I feel like I'm part of this exclusive club. You know, I've just paid hundreds of dollars for a T ticket. I presented my passport, there's people with guns guarding it. And then I walk through and it's so bright and it's filled with all these vices of cigarettes and alcohol. So many scotches, so many scotches and whiskeys.

[Karen Duffin]

And also you're a little bored. So it's basically the classic setup to.

[Jesse Baker]

Spend too much money by design.

[Karen Duffin]

We actually tried to find a definitive study to find out how much of a break you're really? Getting at duty free? Yes. There are no taxes, but you have to pay for all this very expensive airport retail space.

[Jesse Baker]

So it's almost impossible to figure out the bottom line. Every duty free store has different prices, different exchange rates, and the tax break depends on how much tax you usually pay back at home. So I try to get at least some anecdotal data. I was traveling with my family through the Milan airport in Italy, and my daughter Elsie and I spent an hour logging all the prices. Here's a carton of Camel cigarettes.

[Karen Duffin]

39.5 Courvoisier VSOP, 48.€5. Jameson, €24.

[Jesse Baker]

Yeah, I'll buy that. That could be a deal.

[Karen Duffin]

€17. 18.2. You saved 7.8 Euros.

[Jesse Baker]

Same.

[Karen Duffin]

And what was your verdict on duty free?

[Jesse Baker]

It depends. I know that is not the answer you want to hear. I will tell you that tax free cigarettes are criminally cheap. Under $5 a pack. And they're almost three times that here in New York City. So if you want cigarettes, you should buy cigarettes and duty free. But other deals are harder to find. So my daughter Elsie is a expert in makeup.

[Karen Duffin]

Okay, so Giorgio Armani luminous silk foundation.

[Jesse Baker]

Natural, silky, lightweight, fluid.

[Karen Duffin]

€49, which is really expensive.

[Jesse Baker]

Wow, like €49 for this tiny little foundation?

[Karen Duffin]

No, that for that one. That's still not that much. That's so expensive.

[Jesse Baker]

No, no, that's just the display one. This is the one you buy.

[Karen Duffin]

I would never pay that much.

[Jesse Baker]

But I checked here in New York, and not the worst price for Giorgio Armani, so that's a buy. But when it comes to alcohol, there is no logic. The American whiskeys in Milan are two thirds the price of what you would pay here in the United States.

[Karen Duffin]

Wait, even though they ship it all the way to Milan, and then you.

[Jesse Baker]

Have to carry it all the way back? True, but Courvoisier from France next door to Italy was more expensive in the duty free than is here in New York. And Toblerones. I hate to disappoint. You were almost double the U.S. price.

[Karen Duffin]

Wait, so if we aren't always getting a huge deal on products and the governments are losing out on tax revenue, then what's the point?

[Jesse Baker]

Well, here's my theory on this. It's that, you know, when Ireland first started duty free, it was this true bargain for the flyer. And Ireland got all these benefits from the extra tourist business. But then what happens is this sort of race to the bottom. Every other airport starts to offer the exact same tax breaks just to compete.

[Karen Duffin]

And then once everyone has a duty free shop, then there's pressure just to make your airport's duty free shop bigger and brighter and fancier.

[Jesse Baker]

Exactly. Everyone ends up with this sort of expensive shopping mall and somewhere in all of this the tax break concept just sort of gets lost. Prices start to sneak back up because who can really tell? And suddenly the people making the money are not the travelers, but the shops themselves. And the airports, which you'll notice are now redesigning themselves to provide even more space for duty free.

[Karen Duffin]

Okay Cosmopolitans, if you spot a glitch in the international trade system, we would love to hear about it. We are planetmoney in the usual places and planetmoneypr.org on email this episode of.

[Jesse Baker]

Planet Money was originally produced by Sally Helm and Megan Tan and edited by Bryant Urstadt.

[Karen Duffin]

This version was produced by Willa Rubin.

[Jesse Baker]

Our executive producer is Alex Goldmark. I'm Jeff Guo.

[Karen Duffin]

I'm Karen Duffin.

[Jesse Baker]

And I'm Robert Smith. Thanks for listening. You want to bring one of your friends a nice salami?

[Karen Duffin]

No, they don't want that.

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