Sepo awaits duty-free bid rules
The State Enterprise Policy Office (Sepo) has submitted three retail associations’ proposals for the upcoming duty-free shop concession at international airports to Airports of Thailand Plc (AoT), but there has been no response, says a senior official.
“I’ve already sent a letter to the retail associations to inform them Sepo forwarded their proposals to AoT. We asked for a response from AoT on what guidelines will be used to consider [the concessions], but have not received a response,” said Charnwit Nakburi, deputy directorgeneral of Sepo.
“The guidelines f or the duty-free shop auction are in the interest of AoT and the government as well for flexible management.”
The three associations — the Thai Retailers Association, the Thai Duty Free Shop Trade Association and the Thai Shopping Centers Association — last month submitted an open letter to Prime Minister Prayut Chan-o-cha, requesting the government revise the terms of reference (ToR) for the duty-free shop concession at Suvarnabhumi airport, which is due to expire in 2020, allowing greater competition.
The three associations proposed multiple operators be allowed to manage the duty-free shops at the airports instead of having a sole operator manage the concession; the concession should be divided into smaller contracts based on product categories such as food and clothing; and the concession terms should be shortened to 5-7 years from 10 years.
The government has been asked to give operators at least 90 days to prepare for the auction.
The associations have also requested
that the concession fee be increased to a ceiling of 25-30% of annual sales, with the bidding process consisting of two steps: technical qualifications and financial qualifications.
Furthermore, all bidders who passed the technical criteria should be allowed to offer bid prices and those that offer the highest bid should be the winners. The groups also suggested a non-connected committee should be set up to suggest and observe the concession’s criteria, process and ToR.
Lastly, the government should allow operators to directly rent duty-free pick-up counters at airports from AoT, while service fees should not exceed 1% of sales volume, recommended the associations.
King Power Group is the country’s sole duty-free operator at Suvarnabhumi and Don Mueang airports and has been authorised to manage pick-up centres at the airports, while local media outlets have reported Central Group, The Mall Group and South Korea’s Lotte Group have expressed interest in entering the duty-free business.