The James Richardson company yesterday won an Airports Authority tender to run duty-free liquor, tobacco and cosmetics shops in the new terminal being built at Ben-Gurion International Airport.
According to the authority, the company's bid was more than $20 million higher than the $68 million minimum the authority had set. Sakal Duty Free came in second with a slightly lower bid.
"These bids unequivocally demonstrate that these two companies, which are the largest duty-free companies in Israel, have full confidence in the commercial potential of the new terminal," Airports Authority Director-General Gabi Ophir said.
He said that each passenger who travels through Ben-Gurion currently buys an average of $85 to $90 worth of duty-free goods. The cosmetics and perfume shop alone, which is considered the most profitable branch of the duty-free business, is expected to generate hundreds of millions of dollars in revenues. According to data included in a failed lawsuit filed by Sakal against the tender, the current perfume and cosmetics shop at Ben-Gurion generated revenues of $200 million in 2000, a peak tourism year until the intifada broke out at the end of September.
Sakal argued in the lawsuit that the tender for the new terminal, which is part of the Ben-Gurion 2000 project, was tailored in its rival's favor.
James Richardson and Sakal both play a major role in the duty-free business at Ben-Gurion's current terminals, with Sakal handling electronic and sporting goods and James Richardson operating the cosmetics, tobacco and liquor stores.
Yesterday was the last day for submitting bids to run the duty-free electronics shop at the new terminal. Three companies - Sakal, James Richardson and Elco - were expected to submit bids, but James Richardson is now out of the running, since it cannot have both duty-free contracts, and it prefers to keep the one it won yesterday. Electronics industry sources said that Elco is favored to beat out Sakal.
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