Lotte Duty Free wins operational rights for liquor, tobacco sales at Gimpo Airport

The nation's top duty free management company beat rival Silla to secure a seven-year contract with the airport.

[LOTTE DUTY FREE]

Lotte Duty Free won the operational rights for the duty-free liquor and tobacco sales area, DF2, at Seoul's Gimpo International Airport, beating out rival Shilla Duty Free.

The win complements their current management of the airport's DF1 area specializing in in perfumes and cosmetics.

Beginning April 17, Lotte Duty Free will begin managing the DF2 area for seven years, replacing Shilla Duty Free, which ran the space since August 2018.

The decision was reached following an evaluation by Korea Customs Service's duty-free shop patent examination committee on Wednesday. Factors considered included management capability within duty-free zones, the suitability of business plans, financial stability, and support measures for small- and medium-sized enterprises, according to the office.

This bidding opportunity represented the final chance before 2030 for duty free retailers to operate at domestic airports.

"Our extensive experience in managing the largest number of global stores among domestic duty-free operators, along with our exceptional sourcing capabilities for liquor and tobacco, appears to have earned us positive feedback," a Lotte Duty Free official said. "We're committed to maximizing customer benefits by expanding our services to cover all items at Gimpo Airport."

Compared to Incheon International Airport, Korea's main gateway, Gimpo Airport mainly serves short-distance international routes, primarily to Japan, China and Southeast Asian nations. The DF2 area, spanning 733.4 square meters, generated approximately 41.9 billion won ($31.4 million) in sales annually as of 2019.

The win by the nation's duty-free leader is expected to widen the revenue gap with Shilla, the second-ranked competitor.

While Lotte Duty Free held its position as the industry's top player in sales until 2022, the failure to secure the bid at Incheon Airport resulted in a narrowed revenue gap with Shilla, reducing the gap to as little as 83 billion won by the third quarter of the same year.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]