SOUTH KOREA. Lotte Duty Free and The Shilla Duty Free have been named as the two recommended bidders for the perfumes & cosmetics (DF1) and liquor & tobacco (DF2) licences at Incheon International Airport Terminal 2.

As reported, Incheon International Airport Corporation (IIAC) is recommending two companies for each of the major licences, with Korea Customs Service (KCS) making the final evaluation. A decision from KCS on the winning bidders is expected before the end of the month.

Separately, CityPlus (DF4 and DF6) and Entas Duty Free (DF5) have been recommended for the dedicated SME (small and medium enterprises) concessions.

As we reported on 5 April, four retailers tabled bids for the T2 perfume & cosmetics and liquor/tobacco/foods concessions (DF2) reserved for major companies. Apart from Lotte and Shilla, the bidders were Shinsegae Duty Free and Hanwha Galleria Duty Free.

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Six concessions were made available in T2; the two major contracts now lie between Lotte and Shilla, with Korea Customs Service making the final judgement

The DF3 packages, for fashion and miscellaneous items, attracted no bidders and was retendered.

The long-awaited T2 tender is being conducted on an unprecedented two-stage basis, following a major dispute between the IIAC and KCS over how bids should be judged. That row was resolved in early February with an agreement between the two parties to hold a two-tier assessment. This involves IIAC first judging bids on all licences based on a 60% technical and 40% financial weighting.

IIAC is recommending two players for each licence (Lotte and Shilla for DF1 and DF2, as noted above) with KCS deciding the outright winners based on its own scoring system, including contribution to small & medium enterprises.

While KCS will make the final awards, IIAC’s evaluation is likely to prove key.

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This table details duty free sales at Incheon International Airport Terminal 1 from 2011 to 2016. All figures are in 100 million Korean Won, making 2016 sales around US$1.98 billion

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