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COMMENT


Now and Then... The feeling of Déjà vu?


T


his month’s Now and Then column was


penned on April Fool’s Day. Thankfully, I did not succumb to the easy temptation of


ruffling some travel retail feathers with an outlandish piece of ‘fake news’. That was the correct decision, as April 1999’s front cover is far from a joke. Rather, it offers an important retrospective during a timely period of concession planning. Incheon International


TRBusiness is independently and equally owned by Nigel Hardy and Janice Hook. It is available on a subscription package basis only and is published by TRBusiness Limited and distributed by air mail each month.


TRBUSINESS 16 The Warren, Worcester Park, Surrey, KT4 7DL. Tel: +44 (0) 20 8330 9444 Fax: +44 (0) 20 8330 9449


MANAGING EDITOR: Charlotte Turner Tel: + 44 (0) 1252 719078 E-mail: charlotte@trbusiness.com


Airport


Corporation (IIAC) was seeking expressions of interest for arrivals and departures concessions. A tender for between four to six arrivals units (570sq m to 66sq m) stood alongside two departure airside packages (18,000sq m in total). These featured 18 retail outlets each, with IIAC looking to award separate duty and tax free licences for the two areas. Expressions of interest had already been received from the major domestic downtown duty free operators, plus a number of foreign companies. But history demonstrates the former has always emerged victorious. This was evident during the process for Terminal 1 in 2014/15 and more recently at Terminal 2 in 2016/2017. Notwithstanding this, the mere gesture of foreign bid invitations appears to have appeased those operators who had felt ‘disadvantaged’ in previous tenders. In 2019, retailers will return to the bidding


table again to compete for concessions at the airport’s remodelled T1 in line with the expiration of existing contracts held by The Shilla Duty Free, Lotte Duty Free and Shinsegae Duty Free (excluding the non-L&T lots won from Lotte last year following its exit at T1). Whether the tender will be open to foreign bidders remains to be seen (although this is a safe bet given the history) and it will be interesting to observe how IIAC approaches structuring the concessions. Arrivals duty free had yet to be permitted


in South Korea when the April 1999 issue went to press. At that time, IIAC told The Duty Free Business it was ‘70% sure’ arrivals duty free would materialise, having held positive negotiations with customs on the issue. That did not transpire and the long-running debate on the introduction of arrivals duty


54 TRBUSINESS


DEPUTY EDITOR: Luke Barras-Hill Tel: + 44 (0) 20 7610 2782 E-mail: luke@trbusiness.com


SENIOR EDITOR: Andrew Pentol Tel: + 44 (0) 20 8593 8066 E-mail: andrew@trbusiness.com


Tenders at Seoul Incheon and Shanghai Pudong Airports jostle for cover space.


free only reached a breakthrough at the end of last year following a government decision to de-regulate the business. Entas Duty Free and SM Duty Free secured the contracts last month and are expected to begin operating at Terminal’s 1 and 2 in May. Elsewhere, Airports of Thailand (AoT) is


now understood to be issuing a separate tender for the duty free concession at Bangkok Suvarnabhumi Airport. The operator had announced the much sought- after duty free tender would be based on a single concession covering Chiang Mai, Hat Yai, Phuket and the aforementioned Suvarnabhumi Airports. This followed a review of the bidding process by Thai Prime Minister Prayut Chan-o-cha. AoT subsequently bowed to pressure in the face of mounting criticism from the likes of the Thai Retailers Association and the Thai Duty Free Shop Trade Association over the ‘monopolistic’ master concession model. The new contract at Bangkok


Suvarnabhumi spans around 20,000sq m and includes the new satellite terminal. The deadline for submissions is 22 May with the highest bidders set to be announced on 31 May. Should the tenders at Incheon and Bangkok be awarded to local operators, It would be a case of déjà vu yet again...


INT. SALES & MARKETING DIRECTOR: Nigel Hardy Tel: +44 (0) 1883 623020 E-mail: nigel@trbusiness.com


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VAT no: 700 5826 63. ISSN 1369-7390.


Printed by Positive Images UK Tel: 020 8544 5500 All contents are copyright.


APRIL 2019


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