SOUTH KOREA. The country’s four leading travel retailers – Lotte Duty Free, The Shilla Duty Free, Shinsegae Duty Free and Hyundai Duty Free – have tabled bids for Gimpo International Airport’s liquor & tobacco contract (DF2).
As reported, Korea Airports Corporation issued an open tender late last year for the airside departures space at the Seoul airport.
Bids closed on 15 January for the seven-year contract, which embraces 733.4sq m of space.
In related news, Korea Airports Corporation is set to issue an open tender for small & medium enterprises (SMEs) to operate the liquor & tobacco concession (plus fashion accessories, sunglasses and confectionery) at Gimhae International Airport in Busan.
As reported, incumbent Dufry Thomas Julie has been forced to vacate the space after Korea Customs Service ruled the partnership did not constitute an SME, claiming world travel retail giant Dufry (now Avolta) held a majority rather than required minority share in the enterprise.
Dufry has since strongly denied any claimed of wrongdoing.
A third tender opportunity has also arisen with a new duty free arrivals opportunity embracing liquo & tobacco and perfurme & cosmetics at Gimhae International Airport.
Gimpo bid attracts quality quartet
The Shilla Duty Free is the Gimpo incumbent, having won a five-year contract in 2018. It subsequently took up a six-month extension to April 2024.
“We carefully reviewed the concession bidding announcement and worked hard to prepare and participate,” a company spokeperson told The Moodie Davitt Report.
“We carefully reviewed the bidding announcement and business feasibility, and submitted a vision for differentiated customer service and long-term co-prosperity with the airport corporation in our business proposal,” a Lotte Duty Free spokesperson said. “We will prepare well to have good results in line with the bidding schedule in the future.”
The Moodie Davitt Report has reached out to Hyundai Duty Free for further comment.
The minimum annual guarantee is 30% of sales, stated as KRW419 billion/US$32.3 million (full-year 2023 sales estimation based on recent monthly average sales).
As is mandatory now in the Republic, the tender involves a two-stage assessment process. Korea Airports Corporation shortlists its top two companies based on a combination of technical and financial proposal evaluations. Korea Customs Service then reviews the bids and makes a final decision.
The airport’s perfumes & cosmetics departures store retailer is Lotte Duty Free which won a ten-year agreement (five years + a five-year extension) in 2022. ✈
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