Delay in Thai duty free tender ordered amid controversy over ‘monopoly’

THAILAND. Airports of Thailand (AoT) has been asked to delay its duty free tender for Suvarnabhumi, Hat Yai, Chiang Mai and Phuket airports due to concerns over a monopolistic outcome, according to well-sourced reports in Thai media the Bangkok Post (as always, The Moodie Davitt Report is seeking first-hand verification from multiple sources).

As reported, bids were due to close on 30 April for a single duty free retailing concession covering the four airports. An award was due on 10 May for the contract, which is slated to run from 28 September 2020 to 31 March 2031. King Power International is the incumbent retailer and could not comment on the emerging situation when contacted by The Moodie Davitt Report.

However, in two articles published yesterday and today, the Bangkok Post reported that Transport Minister Arkhom Termpittayapaisith has ordered the state-owned airports company to delay the duty free bid (and two other related concessions for airport pick-up counters and other retail, including food & beverage, services and foreign exchange).

On hold? Furious lobbying by King Power’s rivals seems to have had an impact on the government.

The Bangkok Post said that Arkhom has ordered the postponement to allow full evaluation of whether the single concession will lead to a monopoly and whether it violates the recently updated Public-Private Partnership Promotion Act. The report claimed that Arkhom’s actions followed Prime Minister Prayut Chan-o-cha’s concerns that the business would be “monopolised”.

One (or potentially more if the concession is broken up) of Asia’s most important duty free prizes is at stake with Suvarnabhumi Airport in Bangkok (pictured above and below) the crown jewel. [All pictures: ©Martin Moodie/The Moodie Davitt Report]

According to the reports, the requested delay came despite AoT President Nitinai Sirismatthakarn earlier saying that the agency would not change its decision on the tender structure because it saw no reason for any review.

Rival retailers, both local and international, have been lobbying furiously behind the scenes – both before and after AoT’s issuing of the multiple tender – to argue against the single duty free concession.

“The Transport Ministry will closely supervise AoT on the issues. It must listen to opinions from concerned parties before proceeding,” deputy government spokesman Werachon Sukondhapatipak told the media title. He said the delay was an instruction from the Prime Minister.

The AoT tender structure separates duty free pick-up counters from the main contract, paving the way for more travel retailers to be able to open downtown and deliver at the airport.

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