The DFS Group will shut its liquor and tobacco stores at Changi Airport when its lease expires in June, nearly 40 years after they first set up shop.
The company told Coconuts Singapore today that it did not take part in the latest bidding process to retain its booze and smokes concession, which it’s held since 1980. It will, however, continue to operate its luxury stores.
“After careful consideration, DFS has decided not to bid to retain the liquor and tobacco concession operations at Changi Airport,” DFS Group chief Ed Brennan said in a statement.
“Specifically, changing regulations concerning the sale of liquor and tobacco, against a global context of geopolitical uncertainty, meant that staying in Changi was not a financially viable option.”
Earlier this year, the government reduced the amount of duty-free alcohol allowance for travelers returning to Singapore at the airport from three to two liters, and will also impose a mandatory plain-packaging rule with large health warning graphics for tobacco products from July 1 as a way to reduce their appeal.
DFS has no plans to close its luxury retail stores at Changi Airport, its outlets at the Singapore Cruise Centre, or the T Galleria by DFS store at Scotts Road, a spokesperson said.
Among those contesting to take DFS’ place at the airport are South Korea’s Shilla and Lotte duty-free companies, and Germany’s Heinemann, according to business site The Moodie Davitt Report, noting that this is half the number of bidders when the contract last tendered in 2013.
The latest tender was launched on June 4 and closed yesterday.
Changi Airport Group (CAG) said they were “disappointed” at the unexpected decision by what’s probably its oldest tenant.
“We are disappointed that they have opted not to participate in this tender but we will work closely with them to ensure a smooth transition to the new operator for the liquor and tobacco concession. We will also continue to work closely with them to grow their other concession businesses in Changi Airport.”
The new operator is expected to be selected by the end of this year and will operate the tobacco and liquor stores for six years, from June 9, 2020 to June 8, 2026, CAG said.
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