SOUTH KOREAN OPERATORS BID TO SELL LIQUOR AND TOBACCO AT CHANGI AS DFS EXITS
By Susan Lewis
South Korea's two leading duty free operators have bid for the right to operate tobacco and liquor duty free shops at Singapore's Changi Airport, the Yonhap news agency reported quoting industry sources.
It is reported that Lotte Duty Free, world’s no. 2 duty free operator, and Shilla Duty Free, world no. 3, have both submitted their bids for the concessions at Changi's four terminals on Monday just before deadline closed.
Other bidders include Germany’s Gebr Heinemannin and industry giants from USA, China and northern Europe, according to the Yonhap report.
The concessions will last six years from June next year. Result of the bidding is expected to be announced end of this year or early next year.
The current operator, Hong Kong-based world no.1 DFS, has decided not to bid for an extension after having operated the concessions for 38 years at Changi.
DFS Group Chairman and CEO Ed Brennan cited “changing regulations concerning the sale of liquor and tobacco” in Singapore and “a global context of geopolitical uncertainty” as reasons for pulling out.
The Singapore government has tightened limits on duty-free alcohol allowances. Since April this year, travellers who have spent at least 48 hours out of Singapore are entitled to purchase only 2 liters of spirits, wine and beer, instead of 3 liters previously.
The Ministry of Health will also be enforcing stricter control over all tobacco products, which have to adhere to standardised packaging with enlarged graphic health warnings by July 2020.
Brennan added that their decision was “not taken lightly” as the business had “exceeded all expectations for what travel retail can offer in an airport environment” during the 38-year tenancy.
DFS will continue to operate their luxury, cosmetic and perfume outlets in Changi Airport, while their T Galleria and Singapore Cruise Centre outlets will see no changes.
Changi is one of the world’s busiest airports handling 64.9 million users last year. Its management said they will work closely with DFS Group to ensure a smooth transition to the new operator.
(the writer can be contacted at: SusanLewis@thewinechronicle.com)
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