Russian Railways to launch duty-free on trains

Russia’s rail monopoly Russian Railways (RZD) plans to launch a pilot project for duty-free shops on its international trains, RZD said Monday.

The company hopes the project, which will be implemented by the Federal Passenger Company, a wholly-owned RZD subsidiary, will boost RZD’s revenues and offset losses from its heavily subsidized passenger carriage business.

“The Moscow-Kiev train has been selected for the pilot duty-free project. The project is intended to be launched with the introduction of the summer schedule from the last Sunday of May,” an RZD spokesman said Monday.

An operator for the project has been selected without a tender because this is a trial undertaking, he said, without naming the company.

“If the pilot project is successfully implemented, operators … will be selected through a tender,” the spokesman said.

The pilot duty-free project for trains running between Moscow and Kiev will run for a year, after which RZD will decide whether to extend the service to other trains, he said.

RZD announced in spring 2012 plans to organize duty-free trade on international trains, and said then it would open duty-free shops on Allegro bullet trains shuttling between St. Petersburg and Helsinki.

RZD also plans to open duty-free shops at Russian railway terminals. Head of RZD railway terminal directorate Sergei Abramov has said the first such duty-free shop will open in early 2013 at St. Petersburg’s Vyborsky and then Finlyandsky railway stations. Similar shops may later be opened in all Russian railway terminals with international links.

The Russian Association of Duty-Free Operators estimates there are about 30 duty-free operators in Russia selling goods in airports and aboard passenger planes. Duty-free revenues totalled $1 billion last year, with sales aboard airliners accounting for just 10-15 percent of that sum.

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