On June 17, a source from the Ministry of Finance revealed that King Power Duty Free Co., Ltd. has sent a letter to Airports of Thailand Public Company Limited (AOT) requesting a discussion on the termination of its duty-free concession at five major airports. The Ministry of Finance emphasized that this matter does not involve the ministry, as King Power must negotiate directly with AOT as contractual parties.

“The negotiation between King Power Duty Free and AOT today is a direct contractual discussion. The Ministry of Finance, although the largest shareholder in AOT, did not send a representative because this is a matter between the contracting parties.”

Regarding King Power's claim that the contract termination stems from the Ministry’s cancellation of inbound duty-free operations, the Ministry stated it had anticipated such issues and implemented temporary suspensions with the private sector's cooperation. Therefore, the contract was not canceled—only suspended by mutual agreement.

As for the reduction in wine taxes, the Ministry believes this reasoning is unfounded. Lower wine taxes should make prices more competitive, potentially benefiting King Power Duty Free through increased sales.

According to reporters, King Power has officially submitted its request to AOT to terminate duty-free operations at Suvarnabhumi, Don Mueang, Phuket, Chiang Mai, and Hat Yai airports. This follows several negative impacts, including the government’s decision to halt inbound duty-free sales, reduced wine tax affecting sales, partial return of spaces to AOT, and lack of proactive government safety measures for tourists, especially Chinese visitors.

Additionally, the company has been affected by the COVID-19 pandemic, global conflicts, and economic downturns, which have led to continual losses. King Power insists these are force majeure events beyond its control.

As part of the inbound duty-free phase-out, AOT has officially terminated inbound duty-free operations at the five airports effective August 1, 2024. This decision, approved by AOT’s board on July 30, 2024, aligns with a Cabinet resolution aimed at making Thailand a hub for tourism and spending.

King Power has confirmed its cooperation with the Customs Department and notified AOT of its agreement to cease inbound duty-free operations from August 1, 2024. The affected areas include:

  • Suvarnabhumi Airport: approx. 1,870.69 sqm
  • Phuket, Chiang Mai, and Hat Yai Airports: combined approx. 217.45 sqm
  • Don Mueang Airport: approx. 162.46 sqm