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

Published 03/15/2019, 02:33 AM
Updated 03/15/2019, 02:35 AM
© Reuters. 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

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.

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.

© Reuters. 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

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

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