March 15, 2019 / 6:36 AM / 6 months ago

Thai PM calls for review of duty free auction terms amid monopoly concerns

BANGKOK (Reuters) - Thailand’s prime minister said on Friday the auction terms for duty-free concessions and other commercial activities at four airports should be reviewed to address competition concerns.

Thailand's Prime Minister Prayuth Chan-ocha gestures as he leaves Khon Kaen railway station after a visit ahead of the general election in Khon Kaen Province, Thailand, March 13, 2019. REUTERS/Athit Perawongmetha

Retail groups and anti-corruption activists have criticized single operator duty-free concessions, including at the country’s main airport Suvarnabhumi, and called for multiple concessions.

Prime Minister Prayuth Chan-ocha said the Transport Ministry and state-owned Airports of Thailand (AOT) would work to find a solution.

“The government has heard the concerns from many sides, especially over the issue of a monopoly, and will have the board and management of AOT review the auction terms,” said Lt. Gen. Weerachon Sukhontapatipak, the deputy government spokesman.

The duty-free business is a major beneficiary of Thailand’s tourism boom, which saw more than 38 million arrivals in 2018.

AOT’s concession revenue was 16.7 billion baht ($535 million) at the end of its fiscal year in 2018, up 13.3 percent from a year earlier.

AOT on Monday released auction terms for a single duty-free license that included Suvarnabhumi in Bangkok and airports in Chiang Mai, Hat Yai and Phuket.

A separate license for commercial activity at Suvarnabhumi Airport was also announced by AOT.

King Power currently holds the sole license for duty-free retail, commercial activity and pick-up counters at all of Thailand’s major airports. It expires in 2020.

Rivals, including Central Group, the Mall Group and South Korea’s Hotel Shilla are interested in bidding.

AOT did not immediately respond to a Reuters request for comment.

Reporting by Chayut Setboonsarng and Panarat Thepgumpanat; editing by Darren Schuettler

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