Cabinet urged to fix duty-free pickup monopoly at Suvarnabhumi

Economy December 18, 2018 01:00


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THE OMBUDSMAN is urging the Prime Minister Prayut Chan-o-Cha and the Cabinet to get involved in a dispute at Suvarnabhumi Airport to ensure consumers can pick up their duty-free goods at pickup counters in commercial areas there.

The Ombudsman-General, General Viddhavat Rajatanun, is concerned that Airports of Thailand (AOT) has failed to carry out his judgement in the matter of allocation of duty-free pickup counter space, due to a 2005 contract with King Power, and is prompting the Cabinet to sort it out.

 The Thai Duty Free Shop Trade Association has joined the call for the Cabinet to ensure that King Power shares space with other duty-free operators, in line with government policy to promote trade and investment.

Drawing on Section 32 and Section 34 of the Organic Act on Ombudsman, Viddhavat had previously ordered that Airports of Thailand Public Co Ltd (AOT) pressure King Power to ensure the space is shared. According to the Customs Act, consumers have the right to collect goods at a pick-up counter at the airport after passing through Immigration, after first purchasing it at duty-free shops in town. 

Viddhavat’s Office has now been notified by AOT that King Power has refused their direction to allow other operators to share the pick-up counter. 

King Power argued that it does not have to share the space, according to the conditions under a March 2005 contract that remains in effect. The company has argued that under Condition No 2 of the contract, it has been recognised as the sole authorised licencee. 

Allocation of business spaces to other operators would directly affect the volume of returns that the company had proposed to AOT at the time of bidding, based on the right to operate solely, the company has said. That would be unfair to the company and violate the contract in the event that an act caused a breach of the agreement, the company had responded, while reserving the right to take legal action on the issue.

But the Ombudsman has previously declared that allocating pickup space to other operators does not hurt King Power because the space is not used for business transactions. The company could continue to earn revenues in sales areas of the airport. 

Viddhavat said sharing the space would be beneficial for consumers, as well as escalating national competitiveness, and is also compliant with government policy. That AOT has been unable to take appropriate action as suggested by the Ombudsman. The issue is considered insoluble and so an analysis by the Cabinet is necessary.

Rawittha Pongnuchit, president of the Thai Duty Free Shop Trade Association, wants to government to act quickly as a resolution has been much prolonged. AOT should not have granted a single company to be the sole operator of the pick-up counter at the airport. Consumers are being inconvenienced and competition decreased, while the lack of access goes against the government’s policy of promoting foreign trade and investment, said Rawittha.