SINGAPORE. Changi Airport Group (CAG) has extended the bid deadline for its duty free liquor & tobacco tender until 26 August. This gives interested parties a further three weeks than originally announced to prepare their offers for one of Asia’s blue-chip duty free concessions.
A spokesperson for CAG told The Moodie Davitt Report: “Changi Airport Group has received strong interest for its recently launched duty free liquor & tobacco concession. To give participating tenderers more time to put together a robust and compelling proposal, we have moved the closing date for the tender to 26 August 2019. This extension also gives tenderers more time to seek clarification regarding recently announced changes to Singapore’s policies on the sale of tobacco products (see below).”
CAG added: “The period of the new concession remains from 9 June 2020 to 8 June 2026. We expect to award the tender by the end of 2019.”
As reported, the tender was launched formally on 4 June (The Moodie Davitt Report announced the move on 29 May).
The tender followed DFS’s decision not to proceed with a two-year extension of its concession that had been previously announced in December 2018. DFS is the long-term incumbent, having held the contract since 1980. CAG and DFS agreed to extend DFS’s current tenancy by two months, and this will now end on 8 June 2020.
The tenancy will cover 18 stores, spanning over 8,000sq m of retail space across Changi Airport’s four terminals.
CAG said that it is seeking a strong partner with retail concepts to augment the passenger experience for the liquor & tobacco concession. “From store design and product range, to in-store activations and e-commerce strategy, the retailer should put forth a robust and compelling proposal, leveraging new technologies and innovations, to elevate travel retail at Changi,” the airport operator said.
On its decision not to pursue its two-year extension, DFS Group Chairman and Chief Executive Officer Ed Brennan said in late May: “DFS’ decision was based on our assessment that our investment plans for Changi Airport required a longer period to fully realise their impact. DFS instead intends to bid in the new concession tender. DFS’s liquor and tobacco operations are recognised by customers, brand partners and industry peers as being among the very best in travel retail. We will continue to operate at Changi under the current concession until June 2020 and look forward to many more years of serving our travelling customers in Singapore.”
As reported earlier this year, Singapore’s government announced a reduction in the duty free alcohol allowance for returning travellers, from three to two litres, effective 1 April. The new allowance regulations represented a blow to the DFS arrivals business.
Also, as noted above, strict tobacco policies have made selling this category more challenging. The country recently introduced stringent new rules on the sale of tobacco, underpinned by the introduction of an updated Tobacco (Control of Advertisements and Sale) Act last year. This provides for graphic health warnings on packs and ultimately plain packaging, among other measures. There is no duty free allowance or Goods and Services Tax (GST) relief for cigarettes and tobacco products brought into Singapore, including in arrivals.
FOOTNOTE: The Moodie Davitt Report is the industry’s most popular channel for launching commercial proposals and for publishing the results. If you wish to promote an Expression of Interest, Request for Proposals or full tender process for any sector of airport revenues, simply e-mail Martin Moodie at Martin@MoodieDavittReport.com.
We have a variety of options that will ensure you reach the widest, most high-quality concessionaire/retailer/operator base in the industry – globally and immediately.
Similarly The Moodie Davitt Report is the only international business intelligence service and industry media to cover all airport consumer services, revenue generating and otherwise. We embrace all airport non-aeronautical revenues, including duty free and specialty retail, food and beverage, property, passenger lounges, car parking, hotels, hospital and other medical facilities, the Internet, advertising and related revenue streams.
Please send relevant material, including images, to Martin Moodie at Martin@MoodieDavittReport.com.
