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TheMoodieReport.com: Intense interest in Mumbai Airport duty free tender amid traffic and economic boom – 15/02/07
Source: ©The Moodie Report
By Martin Moodie
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INDIA. Interest in the duty free tender at Mumbai Chatrapati Shivaji International Airport (CSIA) is understood to be intense, reflecting the location’s key strategic and commercial worth to the winning bidder.

We can confirm reliably that five bidders are contesting the tender: DFS Group, The Nuance Group/Shoppers’ Stop, Dufry/InterGlobe and Alpha Future (Alpha Airports Group and Pantaloon Retail) and, as reported earlier today, Spanish retailer Aldeasa in partnership with the incumbent, India Tourism Development Corporation (ITDC).

According to one bidder who chose to remain anonymous, final offers are due by 23 February for the contract, which will run for three years with the possibility of a fourth year (depending on the progress of airport development work).

The concession commences on 1 June and, importantly, offers exclusivity across all international products (Indian merchandise is the only exception). The single terminal offer significant space – one 1,355sq m Departures store, a 780sq m Arrivals store and a 145sq m storage department.

Sales are understood to have reached INR444 million (US$10.1 million) in 2006, with branded wines and spirits accounting for two-thirds of that total. Tobacco was the other main category with sales of INR63 million (US$1.49 million). Fragrances and cosmetics generated sales of INR7 million (US$159,000). But these figures offer little real guideline to bidders as the level of retailing and space has been well short of what is expected in the future.

"If you want to be an international player in the Indian duty free market, you want to be in Mumbai or Delhi because of their scale"
Some bidders contacted by The Moodie Report believe there is huge upside potential in the business at one of the country’s most important gateways, despite the short-term contract.

Mumbai handles an estimated 37% of India’s total air passenger traffic (domestic and international), with international passenger numbers currently showing solid double-digit growth and domestic traffic climbing faster still.