Beyond the call of duty
IT IS a typically busy day at Kai Tak at the height of the summer. In Central, tourists are streaming off the Peak Tram, and in Tsim Sha Tsui, the streets are filled with shoppers searching for bargains.
Businessmen, locals and visitors alike browse counters stacked with perfumes, cosmetics, handbags, watches, chocolates, toys, and the obligatory cigarettes and alcohol at the huge Duty Free Shoppers Hong Kong (DFS) store in the Hankow Centre, Tsim Sha Tsui.
But just what sort of value does 'duty free' shopping in Hong Kong represent? Tourists may be familiar with the duty free concept elsewhere, but the situation in Hong Kong is vastly different. It raises the question whether it is misleading for a shop called 'Duty Free Shoppers' to advertise a wide variety of goods, most of which are not dutiable, to uninformed shoppers.
According to a survey by the Sunday Morning Post, many of the products for sale at DFS can be bought for the same price or less in your neighbourhood supermarket or pharmacy in Hong Kong.
'Lowest Liquor prices in Hong Kong - Guaranteed,' reads a sign at DFS, Tsim Sha Tsui. A 750ml bottle of Smirnoff Vodka sells for $127. But a short walk away at Park 'N Shop, the same bottle is $110.50, and Virgin Atlantic Airways' in-flight duty free offers a 1000ml bottle for $111.
If tourists think they are paying less for goods from DFS stores, they may be in for a rude awakening.
While not all alcohol can be bought for less elsewhere, the prices at DFS can sometimes be matched despite its claim to 'lowest liquor prices: a 750ml bottle of Malibu, for example, costs $125 both in DFS and Park 'N Shop.
A luxury watch, pictured in the free DFS tourist map available from the Star Ferry complex, is listed at $8,000, although the ladies' timepiece from Longines' Conquest range was discounted to $6,400 last week. Just down the waterfront at Jewellery Plaza, a small shop in the Ocean Centre, the same silver and gold watch is displayed at a standard price of $6,900. The watch is also on special sale, but its price has been slashed to $4,900 - $1,500 less than DFS.
James Hurley, president of DFS Hong Kong Ltd, defends his store prices. 'With specific reference to liquor, we do indeed guarantee that we will not be undersold by anyone,' he said. 'We gladly match the difference if it is brought to our attention before or after the sale.' Mr Hurley insists his company's commitment to the customer includes 'competitive prices at significant savings to the traveller's home country prices'. This may be so. However, it doesn't take endless hours of scouring Hong Kong streets to find the same goods at cheaper prices.
Take a 2 fl oz (56ml) bottle of Ralph Lauren Polo Eau De Toilette, for example. This is available from DFS for $285. Around the corner at The Arcade on Canton Road, the King of Perfumes store sells the same bottle for $230. Polo is also available in a Watson's sale for $270.
The Calvin Klein aftershave, Eternity For Men, shows a similar price difference. Similarly, a 3 fl oz (85ml) bottle of Georgio of Beverley Hills ladies' perfume is $580 in DFS, while Lane Crawford stores offer it in their sale for $522.
But Mr Hurley points out that 'merchandise in some stores may not be authentic or the original brand'. Or they 'could have been acquired through unauthorised channels and be of inferior quality or freshness'. 'There may be an occasion, especially during clearance periods, where another shop would have a lower price on selected items,' he said. 'But this is certainly not widespread.' If shoppers decide to compare prices, they'll have to memorise the ones they find in DFS. 'It is company policy not to let customers write prices down on paper - you will have to remember them,' said a DFS saleswoman in the Ocean Centre.
Mr Hurley, however, seems to have a different interpretation of the policy.
'DFS allows customers to write down prices if they choose', he said, but forbids competitors from taking notes or photographs in their stores.
According to the head of trade controls at the Customs and Excise Department, Leung Yau-yam, tax on all goods except alcohol and tobacco would have been paid to the Government when the products are imported into the territory.
Since DFS claims to have paid all duty on the alcohol and tobacco products they sell, why are its prices sometimes more than that in the local supermarket down the road which has factored in taxes that it pays? Customs and Excise spokesman Ernie Wong Sau-Yee declined to comment. However, he pointed out: 'When you order alcohol and tobacco, it is up to the tourist to work out if they are paying less.' Tourists will find this explanation far from satisfactory. 'With the sign Duty Free Shoppers, you expect a price advantage but there isn't one,' said a holidaying couple from England browsing in one of the stores this week.
Nonetheless, DFS is operating within boundaries set by the Trade Descriptions Ordinance, under which it is an offence to falsely indicate that goods not liable for duty are being sold 'duty-free'. 'It is entirely proper for DFS to use the name Duty Free Shoppers Hong Kong Limited on its stores in Hong Kong,' said Mr Hurley.
'It is the company's name and by law the registered name must appear at the premises. Signs posted at the entrances to our stores and all of our promotional material explain to customers what is subject to duty in Hong Kong.
'We believe that it is widely understood and well communicated in tourism promotional literature that Hong Kong is, for the most part, a duty free and tax free port.' DFS spokesman Dick Airth added: 'We have disclaimers in our shops stating that alcohol and tobacco are the only items liable for duty, and for which duty has been paid. The sales assistants are also instructed to inform customers of this should they ask.' According to a DFS salesperson, shoppers cannot buy alcohol and tobacco from their stores at the duty-free prices marked on the products if they intend to consume them in Hong Kong.
After proving you are a traveller, you can place an order for alcohol and tobacco, then pick up the goods at the departure lounge of Kai Tak after going through immigration.
Mr Hurley also pointed out that DFS offers a wide range of quality products under one roof as an alternative to getting sore feet from hours of shopping.
Dried Chinese mushrooms, scallops and shark fins in beautifully packaged boxes are conveniently displayed next to rows of lush chocolates and gifts of all descriptions. An enormous 4.5 kg bar of Toblerone stands on one shelf, with a sizeable $660 price-tag to match.
Some goods such as Camus Cognac extraordinaire and Royal Salute blended scotch whisky are labelled 'exclusive' to DFS. A carton of 400 Marlboro cigarettes costs $200. If bought individually at Watson's stores, they would total $250.
But after more than two decades - with a brief interruption in 1988 - DFS' management contract for alcohol and tobacco sales at Kai Tak airport comes to an end this month.
The lucrative concession will instead be operated by the Hong Kong Kai Tak International Duty Free Shop consortium, although DFS will continue to sell its other products at Kai Tak as well as from branches at The Peak, Hankow Centre, until Chek Lap Kok airport opens.
However Mr Hurley said the company remained optimistic and would open its largest store in Asia in Sun Plaza, Tsim Sha Tsui next year. 'This major capital investment is certainly an outward sign of our desire to continue to better serve tourists that visit Hong Kong,' he said.
These tourists will probably continue to spend fortunes at these outlets, unaware that the duty free bargain they are hunting for in the 'shoppers' paradise' of DFS, may be just around the corner.