Six retailers bid in Changi liquor and tobacco tender

Emily Pacey

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Incumbent retailer DFS Venture Singapore leads the bidding in the Singapore Changi airport liquor and tobacco tender

Civil Aviation Authority of Singapore has released details of the financial proposals from retailers vying to manage its liquor and tobacco duty-free concession. Six retailers submitted bids: incumbent operator DFS Venture Singapore, Nuance-Watson (Singapore), Aldeasa, Aelia, Sky Connection and Hotel Lotte.

DFS Venture Singapore submitted the highest bid, offering either a minimum monthly guarantee of S$10.2m ($6.6m) for the first year, rising to S$10.5m ($6.9m) in year three or 40% of the total monthly liquor sales, 20% of wine sales and 25% of tobacco sales. The retailer has also offered to pay a bonus of S$500,000 ($326,797) in year one, rising to S$1m ($653,594) in year three if annual sales exceed S$385m ($251.6m).

Hotel Lotte submitted the second highest bid, offering either 40% of monthly sales for liquor, 20% for wines and 25% for tobacco sales or a minimum monthly guarantee of S$10.5m, whichever is higher.

Sky Connection offered S$9.3m ($6.1m), Nuance-Watson (Singapore) guaranteed S$8m ($5.2m) for the first year, S$8.5m ($5.5m) for the second and third years plus an annual incentive rent of 45% of total annual gross sales (tags) exceeding S$321m ($210m) in year one, rising to 45% of tags over S$391m ($255.5m) in year three. In addition, if the total percentage rents for the year exceed minimum monthly guarantee amounts for the year, the retailer will pay 30% of tags over S$321m in year one, rising to 30% of tags exceeding S$391m.

Aelia tabled the next highest bid of S$8.1m ($5.3m), while Aldeasa submitted the lowest bid, offering a minimum monthly guarantee of S$5.2m ($3.4m).

The retailers are competing to run 17 outlets totalling 4,824sq m (51,905sq ft) of space over all four terminals. The total space will rise to 4,984sq m (53,627sq ft) after renovations are completed in 2008.

The winner is expected to be announced in April.