June 24, 2008

Booze Gets Costly at IGI Duty-Free

NEW DELHI: The thrill of buying duty free alcohol at airport may fizzle out a bit in Delhi, as prices of most liquor brands have been hiked by 10-20% at IGI Airport. Though insiders are not surprised much since Alpha, the company that owns the duty-free shop, has sole rights over the alcohol sale at the airport.

According to sources, several brands have become dearer by $1 to $5 since May. JW's Black Label is up from $29 to $34, while the price of Red Label has gone up from $15 to $17. Citing monopoly as an important factor, an airport official said: "Till May there were two companies that were running duty-free shops. One of them, Flamingo, shut down about 20 days back, since their contract had expired. Just before that, there was a sort of clearance sale in which many of their products, including alcohol, were sold really cheap and several of the offers were open to passengers. To keep up with the competition, Alpha had also slashed its rates. Now that they are the only company, they have pegged the rates even higher than the earlier slab."

According to a customs official, the rise in prices is most visible at the departure terminal. "On arrival, one can buy only 2 litres of alcohol without duty. After that duty is levied at a rate of 150% on the cost price. It is at the departure that one can buy unlimited alcohol, so most playing around with prices happens there," explained the official.

The airport management, Delhi International Airport (P) Ltd, said that Alpha had bid for the rights to run duty-free shops at the airport for Rs 500 crore and they have exclusive rights till their contract expires in 2010.

Contrary to reports that the price hike was due to a shortage of liquor in the international market, sources confirmed there was no such issue. "There is no shortage of alcohol and no significant price rise either," revealed an importer. "Duty-free companies have a tie-up with liquor manufacturers which specify the price bracket in which particular brands are to be sold. However, there is no question of any shortage at present," he added. Despite repeated attempts, nobody from Alpha could be contacted.

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