with correspondents in Japan, Russia, USA, Sweden; edited by M.Andrew, FIJEV

Following our story on 11/06/01, we have been flooded with emails, faxes and phone calls. Key Cognac participants in the duty free Norwegian market have been financially exposed but the insurance and prudent money management minimized impact on their bottom line except for one of the Big Four. Most agree that euphoric over expansion after duty elimination in the EU was the main reason behind the demise of one of the oldest duty free specialists in Norway, Erling Qvale AS. Their main business was deliveries of tax free products to ferries, airlines, embassies, UN/NATO forces and ship chandlers in all Scandinavia. The company also started a domestic distribution. This rapid expansion combined with EU abolishing tax duty had an adverse impact on the internal accounting administration of the company. Furthermore, in this particular market, producer negotiates prices directly with the operator (seller) thus leaving a small margin to a distributor like E. Qvale.

10 June 2001