SOUTH KOREA. Arrivals duty free retailers have been urging the South Korean government to allow tobacco product sales but face considerable government resistance.
SM Duty Free and Entas Duty Free, awarded the concessions to open the first duty free arrivals stores in South Korea at Incheon International Airport on 31 May, have pressed the government to use an ongoing review into duty free arrivals to give their business a much-needed boost.
Entas Duty Free CEO David Yu told The Moodie Davitt: “We have been in discussion with the Ministry to sell tobacco at the arrivals duty free. Nothing has been confirmed, but we belive the Ministry will allow tobacco sales starting early next year.”
However, the government is highly sensitive to health and taxation issues regarding tobacco. This week it circulated a cautionary statement to the press not to report that cigarette sales in arrival shops have been approved since nothing has been decided. Any move to allow tobacco sales on arrivals will also be opposed by Korean Air and Asiana Airlines, which recently re-introduced the category onboard to boost declining sales.
As reported, early sales figures for both airport retailers were short of their targets and expectations. SM and Entas have both, therefore, been continuously urging the government to allow tobacco to be sold on arrival and to consider increasing the US$600 allowance limit currently in place for those shopping upon entry to the country.
