News: Retail MNCs rush to run outlets at new B'lore airport
(TNN 15/09/2006) New Delhi - A large number of multinationals like the Nuance Group, the DFS Group, Alpha Airports Group, Dufry Group and Gebr Heinemann have lined up to set up retail services, including duty-free shops, at the new international airport being built near Bangalore. Domestic majors like Shoppers Stop, Pantaloon and Oberoi Group are also in the fray to run retail services at the airport.
India Tourism Development Corporation (ITDC), which runs duty-free shops at most major airports, is missing from the list of potential contenders as it has not made it to the pre-qualification grade. Similar is the case with Arianta, a big player with a turnover of $900 million, industry sources said.
Officials of Bangalore International Airport (BIAL) met potential bidders at a tender meeting on Thursday and it has been decided that bids would be submitted by the end of October. BIAL has shortlisted five sets of potential bidders, the sources said. The packages for which bidders are being shortlisted include food retail and retail facilities at the city side of the airport.
The bids for food retail and city side retail may face a policy hurdle since foreign players are allowed only in single brand retail. In the case of duty free, foreign direct investment (FDI) is allowed. Therefore, foreign companies seeking to provide food and city side retail at BIAL may have to go through franchisees.
As of now, foreign investment in retail is restricted to single brand retail, that too only to the tune of 51%. The issue is of significance since global majors like Nuance are in the fray for food & beverage (F&B) retail at the airport.
Interestingly, the Nuance-Shoppers stop combine is being considered as the favourite to win all categories of retail at BIAL since the Nuance Group and Zurich Airports are quite familiar with each other. Zurich Airports is the airport operator of the Siemens-L&T consortium which runs BIAL.
The origins of both Nuance and Zurich can be traced to the erstwhile Swiss Air Group. Unless the hurdle posed due to ban on retail FDI trips it, the Nuance-Shoppers Stop combine is expected to emerge as the retail champion at the new Bangalore airport.
BIAL is also being watched with interest since it is the first greenfield airport in the country to tie up for retail services. The BIAL model is likely to set the trend for the proposed new international airport near Hyderabad and other similar projects.
India Tourism Development Corporation (ITDC), which runs duty-free shops at most major airports, is missing from the list of potential contenders as it has not made it to the pre-qualification grade. Similar is the case with Arianta, a big player with a turnover of $900 million, industry sources said.
Officials of Bangalore International Airport (BIAL) met potential bidders at a tender meeting on Thursday and it has been decided that bids would be submitted by the end of October. BIAL has shortlisted five sets of potential bidders, the sources said. The packages for which bidders are being shortlisted include food retail and retail facilities at the city side of the airport.
The bids for food retail and city side retail may face a policy hurdle since foreign players are allowed only in single brand retail. In the case of duty free, foreign direct investment (FDI) is allowed. Therefore, foreign companies seeking to provide food and city side retail at BIAL may have to go through franchisees.
As of now, foreign investment in retail is restricted to single brand retail, that too only to the tune of 51%. The issue is of significance since global majors like Nuance are in the fray for food & beverage (F&B) retail at the airport.
Interestingly, the Nuance-Shoppers stop combine is being considered as the favourite to win all categories of retail at BIAL since the Nuance Group and Zurich Airports are quite familiar with each other. Zurich Airports is the airport operator of the Siemens-L&T consortium which runs BIAL.
The origins of both Nuance and Zurich can be traced to the erstwhile Swiss Air Group. Unless the hurdle posed due to ban on retail FDI trips it, the Nuance-Shoppers Stop combine is expected to emerge as the retail champion at the new Bangalore airport.
BIAL is also being watched with interest since it is the first greenfield airport in the country to tie up for retail services. The BIAL model is likely to set the trend for the proposed new international airport near Hyderabad and other similar projects.
posted by InCar Group Press Room at 18:54
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