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Thailand: Retailers urge duty free up for main airport shopping
Three retail associations on Wednesday submitted an open letter to Prime Minister Prayut Chan-o-cha, calling on the government to revise the terms of reference (ToR) for the duty-free shop concession at Suvarnabhumi and Don Mueang airports, which are due to expire in 2020, allowing greater competition.
The three associations are the Thai Retailers Association (TRA), the Thai Duty Free Shop Trade Association and the Thai Shopping Centers Association.
Chatrchai Tuongratanaphan, executive director of the TRA, said the retailers have asked the government to create greater transparency and more fairness in the bidding process for the concession.
“Each retail association will have a better opportunity to join the bidding if the government improves the terms of reference. This will create a greater benefits for passengers and the country overall,” he said.
The three associations also proposed that many operators be allowed to manage the duty-free shops at the airports, instead of having a sole operator manage the concession.
“The concession may be divided into smaller contracts based on product categories such as food and clothing. That’s the same model that many large airports in the world use, like in South Korea and Singapore. This model will enhance pricing competition and boost product offerings and quality,” said Mr Chatrchai.
He said the concession term should be cut to 5-7 years from 10 years. The current concession fee is 5-20% of annual revenue.
The retailers said the process to draw up the new ToR should involve representatives from anti-corruption organisations, the Office of the Auditor-General of Thailand and the Trade Competition Board.
The government has been asked to give operators at least 90 days to prepare for the bidding.
Retailers said the bidding process should have two steps: technical qualifications and financial qualifications.
Mr Chatrchai said the concession for a single operator is appropriate for small airports.
He said the government should allow operators to directly rent the pick-up counters at the airports from the Airports of Thailand Plc (AoT), while service fees should not exceed 1% of sales volume.
AoT plans to hold an auction for its duty concession this year. The auction winners must be determined two years before the current concessions expires.
Source: https://www.bangkokpost.com/business/tourism-and-transport/1436859/retailers-urge-duty-free-up-for-main-airport-shopping