June 26, 2008

Airport Still Keen on Duty-Free Plan


AUCKLAND International Airport is considering the implications of a Commerce Commission decision to refuse permission for its two previously competing duty-free operators to merge.

The commission is also investigating an airport decision to move from two duty-free concessions to one.

Auckland airport has granted Hong Kong-based DFS Group duty- free rights for the next seven years, shutting out Regency Duty Free.

On March 28 the commission gave the thumbs-down to the merger on the grounds that it would negatively affect competition.

In its written decision made public yesterday, the commission said the merger would remove consumer choice between duty-free retailers and prevent them from comparing prices.

Commission chairwoman Paula Rebstock said high street duty-free retailers and duty-free shops at other airports would provide limited competitive pressure.

"Auckland International Airport would have little reason to constrain the combined entity's duty-free prices," Ms Rebstock said.

There was little chance of the airport bringing in a competitor given its policy of one concessionaire.

Auckland International Airport said it was reviewing the commission's reasons for turning down the merger "and any implications they may have for its decision to move from two to one duty-free operators".

It did not believe the move breached the Commerce Act.

Overseas passengers would benefit from a wider range of goods offered by a single duty-free operator, and the move would make it more competitive relative to other international airports.

Any impact on duty-free revenue could not be determined before the commission's investigation was complete.

Wellington International Airport is also being investigated by the commission for moving from two duty-free operators to one.


(c) 2008 Dominion Post. Provided by ProQuest Information and Learning. All rights Reserved.