Alcohol, Estonia, Markets and Companies

Bidding was due to close on August 5 but Changi Airport Group (CAG) extended the deadline until August 26. The new contract will run from June 9, 2020, to June 8, 2026.

Katri Link, spokesperson for the company, told  that she cannot comment on the potential interest as the shipper's shares are listed on the Tallinn stock exchange.

According to The Moodie Davitt Report, others who have expressed interest include the DFS Group, which has held the contract since 1980, as well as Heinemann, Dufry, Lotte Duty Free, The Shilla Duty Free, Lagardere Travel Retail, China Duty Free Group, King Power Group and King Power International.

The publication said that the interest of the Estonian shipper in participating was surprising. At the same time, The Moodie Davitt Report said that some of the companies named are concerned about the financial risks and will likely not bid.

At stake is a business that The Moodie Davitt Report estimates generated around 430 mln US dollars in sales last year, around 400 mln US dollars of that in departures, the balance from arrivals duty free. For tobacco, the entire business was in departures. Spirits represented around 61% of departures sales, wines and champagne about 7% and tobacco about 32%. In arrivals, spirits accounted for about 74%, the balance coming from wines and champagne.

In addition to a concession fee, the winning bid must also pay a deposit of 20.5 mln US dollars and bear heavy capital expenditure commitments over the contract term.