King Power duty free monopoly ending soon
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Thailand’s much-maligned airport duty-free monopoly appears set to be nearing an end. For years, major Thai retailers have complained that incumbent operator King Power has controlled the retail offer – and prices – at Thailand’s largest airports, especially Suvarnabhumi outside Bangkok. Frequent travellers often comment that airport ‘duty-free’ prices are higher than at other airports in the region, including Singapore and Hong Kong.
On Wednesday, state-owned Airports of Thailand (AOT) approved guidelines for concessions for duty-free and commercial activities at its airports, the first step in opening up retail spaces to other companies.
According to Reuters, AOT will offer three retail licences at an upcoming auction, clearing the way for Thai retail giants Central Group and The Mall Group, along with South Korea’s Hotel Shilla, to enter the fray.
King Power’s current licence ends next year.
AOT says contracts will cover duty-free retail, commercial businesses such as food and beverage outlets and pick-up counters for shoppers who buy goods in town and collect them at the airport after clearing customs and immigration.
Questions & Answers
Q.What specifically did Airports of Thailand (AOT) do that indicates the monopoly is ending?
What specifically did Airports of Thailand (AOT) do that indicates the monopoly is ending?
AOT approved guidelines for concessions for duty-free and commercial activities at its airports. This is the initial step towards allowing other companies to operate retail spaces, breaking the long-standing monopoly.
Q.Which companies are expected to bid for the new retail licences at Thai airports?
Which companies are expected to bid for the new retail licences at Thai airports?
Thai retail giants Central Group and The Mall Group are expected to bid. South Korea's Hotel Shilla is also mentioned as a potential entrant into the market, alongside these domestic firms.
Q.When does King Power's current operating licence at Thailand's airports expire?
When does King Power's current operating licence at Thailand's airports expire?
King Power's existing licence to operate duty-free and commercial retail spaces at Thailand's airports is set to expire next year. This timing enables the upcoming auction of new licences.
Q.What types of commercial activities will the new contracts cover at AOT airports?
What types of commercial activities will the new contracts cover at AOT airports?
The new contracts will cover duty-free retail, various commercial businesses such as food and beverage outlets, and pick-up counters for goods purchased in town. These diverse services aim to enhance the airport experience.
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