Karen Duffer
Appearances
Planet Money
The Land of the Duty Free (classic)
Wait, even though they ship it all the way to Milan?
Planet Money
The Land of the Duty Free (classic)
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?
Planet Money
The Land of the Duty Free (classic)
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.
Planet Money
The Land of the Duty Free (classic)
OK, Cosmopolitans, if you spot a glitch in the international trade system, we would love to hear about it. We are at Planet Money in the usual places and planetmoneyatnpr.org on email.
Planet Money
The Land of the Duty Free (classic)
Today on the show, we have the story of Brendan O'Regan, a former bartender turned entrepreneur who said, let the world have its crevasse tax-free.
Planet Money
The Land of the Duty Free (classic)
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 the Atlantic. And that was Western Ireland, County Clare, along the Shannon River.
Planet Money
The Land of the Duty Free (classic)
This is when our duty-free hero, Dr. Brendan O'Regan, enters the story.
Planet Money
The Land of the Duty Free (classic)
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.
Planet Money
The Land of the Duty Free (classic)
Wait, O'Regan created the very first Irish coffee? It's delicious. Irish coffee is the best.
Planet Money
The Land of the Duty Free (classic)
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.
Planet Money
The Land of the Duty Free (classic)
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.
Planet Money
The Land of the Duty Free (classic)
Plus, then when you bring the wine to the counter, often you have to pay sales tax again on the total.
Planet Money
The Land of the Duty Free (classic)
So Ireland said, all right, let's try it. But we are keeping you on a very short leash.
Planet Money
The Land of the Duty Free (classic)
Wait, was this like a farmer's market in the airport?
Planet Money
The Land of the Duty Free (classic)
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. Sure. On vacation. Yeah. So in came the Leica cameras and the Omega Swiss watches.
Planet Money
The Land of the Duty Free (classic)
Nougat? Nougat. 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.
Planet Money
The Land of the Duty Free (classic)
A private company, DFS, opened the first duty-free shop in the United States, in Hawaii.
Planet Money
The Land of the Duty Free (classic)
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.
Planet Money
The Land of the Duty Free (classic)
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.
Planet Money
The Land of the Duty Free (classic)
Brian O'Connell has just published a new biography of Brendan O'Regan. So he's a little biased, but he believes that that first little store in the airport changed the world.
Planet Money
The Land of the Duty Free (classic)
And also, you're a little bored. So it's basically the classic setup to spend too much money. By design. Obviously. 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.