SOUTH KOREA. Incheon International Airport Corporation (IIAC) is expected to launch a tender this week for the DF1 and DF2 concessions at the Republic’s main gateway.
As reported, both contracts are up for grabs following the quitting notices served recently by incumbents The Shilla Duty Free (DF1) and Shinsegae Duty Free (DF2).
Shilla and Shinsegae are expected to exit their multi-store contracts on 17 March and 27 April 2026, respectively, in response to heavy operating losses and their failure to renegotiate financial terms with IIAC. Each contract embraces liquor & tobacco and perfumes & cosmetics.
Shilla is bidding (albeit with a points deduction prompted by its premature departure), as are Korean rivals Lotte Duty Free and Hyundai Duty Free (which won DF5 last time around).
Like Shilla, Shinsegae Duty Free would need to overcome a points deduction if it bids.
Shinsegae Duty Free told The Moodie Davitt Report, “The tender announcement for the new Incheon Airport duty-free concessions has not been released yet. Since the official RFP has not been issued, no decisions have been made at this stage regarding participation or bidding strategy.
“We will be able to provide a clearer position once the airport authority publishes the formal tender documents.”
Several foreign travel retailers are also evaluating bids. They include China Duty Free Group, which bid unsuccessfully last time; King Power Duty Free of Thailand, which in 2014 made a serious but vain attempt; and Lagardère Travel Retail.
Writing in Incheon Ilbo, an extremely well-connected local media title, much-respected reporter Kim Ki-seong quoted a King Power spokesperson as saying: “It is true that we reviewed the business feasibility as perfume, cosmetics, liquor and cigarettes are all bundled under a single business licence, but we will decide whether to participate after watching the bidding briefing session.
“There will be no ‘superficial’ participation like in the third bid in 2014 that was eliminated.” The Moodie Davitt Report has reached out to King Power for verification.
Avolta is not prohibited from bidding, but any bid evaluation is likely to be impacted by the early 2024 ejection of the Dufry Thomas Julie joint venture from Gimhae Airport in Busan.
In the 2022 bid (see tables below), IIAC proposed a minimum per-passenger fee of KRW5,346 (US$3.66) for the DF1 concession won by Shilla with an KRW8,987 (US$6.16) per passenger offer +68% higher.
For DF2, IIAC proposed a minimum KRW5,617 (US$3.85) baseline for the contract secured by Shinsegae’s KRW9,020 (US$6.14) at +61% higher.
IIAC plans to lower the per-passenger fee in this bidding. An IIAC official told Khan.co.kr (the website for influential Korean media The Kyunghyang Shinmun): “We will refer to the business data submitted to the Incheon District Court by the two duty-free shops when they filed for compulsory mediation, requesting a -40% rent reduction.
“Since the two duty-free shops returned their concessions due to high rents and operating losses, we have no choice but to lower the per-person fee.” ✈
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