Lotte Duty Free Coex Seoul ©.

Leading Korean duty free retailers have told TRBusiness that they fully welcome the government’s decision to permanently transfer the decision-making process on future airport and downtown duty free contracts from the Korea Customs Service into ‘unbiased’ and ‘expert hands’.

Exactly who these experts will be still remains to be announced by the Strategy and Finance Ministry, although it has promised it will consist of non-government individuals whose names will apparently be disclosed to the public.

COEX STORE CONTRACT TO BID IN NOVEMBER

This system is expected to be refined and further formalised next year. However, the Finance Ministry has confirmed to prospective bidders that an early hybrid version will be in place for the evaluation of bids this November. This will be in time to apply to the five-year tender for the Seoul Coex downtown duty free license which is currently held by Lotte Duty Free.

The five-year Seoul Coex downtown duty free license presently held by Lotte Duty free comes up for bid this November. ©

Meanwhile, commenting directly on the planned changes from Seoul, a spokesman for Lotte Duty Free told TRBusiness today that the company is happy that the duty free licensing process will now be overseen by independent assessors.

MORE ‘TRANSPARENCY AND FAIRNESS…’

He said: “We think this will bring a positive change to the industry as a revision and we think it will improve transparency and fairness and this is a good thing.”

He continued: “Also, we consider the change positive, since the government put efforts to improve the transparency and fairness of the license process. It is a good start.”

The Lotte World Tower.

Asked whether the retailer might reasonably even look for compensation – especially considering it lost its World Tower flagship outlet in November 2015 based on decisions influenced by both corrupt influences within the Korean Customs Service and the former government, the spokesman said: “For now, we think it is not really possible. We are just happy to have it back.” [Lotte regained its license on January 5 this year-Ed].

MORE POSITIVE REVISIONS…

More positively, he added that the retailer now fully welcomes the new process involving independent individuals making decisions on duty free concession adjudication in future.

Lotte adds that other than ‘switching judges to non-government experts’, additional new and welcome revisions include public access to information regarding the names and scores of experts; evaluations based on each expert’s own field of expertise; and a strengthening of both external and internal systems to monitor the license evaluation process.