EU membership to cut Bulgarian border sales by half

Joe Bates

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The country's duty-free border retailers face a tough 2007 adapting to new EU rules and regulations

Bulgaria’s duty-free border business could see sales drop by over a half in 2007 due to the country’s accession to the EU on January 1, operators have warned.

New duty-free legislation came into effect on January 1 2007, which closed border shops along the Romanian and Greek borders, as well as those outlets at the border entry points from non-EU states Turkey, Serbia and Macedonia. Duty-free stores at border exit points to these three neighbouring countries and international airports remain open.

Border shop operator Corecom executive director Assen Assenov told RavenFox.com that two of its four shops had been forced to close: one located on the Greek border and another on the border entry point from Turkey. “This year will be quite shocking for the whole border store industry and sales could be down by over 50%.

“Under the terms of the new law the government is giving us the opportunity to move one of our stores on the Serb border entry point to another location at an exit point, but finding a new location and sorting out all the paperwork involved will take time.”

Assenov said Corecom planned to adapt its shop on the Greek border into a duty-paid outlet. “The domestic prices between the two markets are quite different. We are expecting a lot of people from Greece to travel over and shop on our side as the excise duties on tobacco in particular are much lower in Bulgaria.”

According to local press sources, in 2006 there were 14 licensed duty-free operators in Bulgaria, operating 49 outlets nationwide with a combined annual turnover of about €250m ($323.41m).