Having just returned from Spain,I wonder if you can tell me why tobacco is cheaper to purchase at the local Tabac Shop than the airport. I purchased 500grams of Golden Virgina at Euros 43,and at the Airport shop the same item is 51 Euros. I did ask at the airport shop but really did not get an answer. Is it someting similar to BAA Airports 400grm Toblerone is 77p more expensive than the High Street price?

It's good to see that you have a good eye for a bargain. Airport shopping enjoys the perception that shopping is cheaper there. But it is only truly cheaper than the local shops when you travel long haul where you are able to buy products without the cost of the duty. Within the EU, the perk has disappeared. That's because on 30 June 1999, the sale of duty free alcohol and tobacco at airports and at sea was abolished in all of the original 15 EU member states. All these products can be purchased and moved around EU member states freely without limits if deemed for personal use precisely because the duty has been paid.

In Spain tobacco is a state monopoly and so prices are regulated. The price is fixed by the state and a 16% VAT is slapped with no room for extra profiteering. In airports, they have the freedom to charge whatever price they can get away with especially as they have a captive audience who believe that prices must be cheaper at the aiport. The price of Toblerone, as you have discovered, is a perfect example.

13 July 2006