Duty-Free Industry Requests Government to Temporarily Allow Domestic Sales of Inventory Items

Lotte Duty Free temporarily suspended operations at the international terminal duty-free store of Gimpo International Airport on the 12th. This decision was made due to the sharp decline in flights and passengers at Gimpo Airport caused by the global spread of COVID-19. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Lee Seung-jin] The duty-free industry, hit hard by the novel coronavirus infection (COVID-19), has requested the government to temporarily allow the sale of inventory worth trillions of won to domestic consumers.

According to the duty-free industry on the 17th, on the 7th, major domestic duty-free operators such as Lotte, Shilla, Shinsegae, and the Korea Duty Free Association held a meeting with the Korea Customs Service and demanded a relaxation of bonded goods sales regulations. It is reported that the duty-free industry requested that only foreign-made inventory be allowed to be sold to domestic consumers after customs clearance.

Duty-free goods cannot be distributed in the market with tax benefits. Unlike inventory items sold with discounts to promote sales at department stores and outlets, duty-free goods must be incinerated and discarded. Accordingly, the duty-free industry is said to have argued to the Korea Customs Service that consumers could purchase products at affordable prices and unnecessary disposal could be avoided.

Currently, the duty-free industry is experiencing a sharp decline in sales due to COVID-19. According to the Korea Duty Free Association, duty-free sales in February amounted to 1.1025 trillion won, half of the previous month’s 2.0247 trillion won. The industry reports that sales in March fell by half again. In the case of Incheon International Airport duty-free shops, April sales dropped by 98% compared to the daily average of the previous year.

As a result, inventory is piling up to an unmanageable level. According to the duty-free industry, as of the end of last year, Lotte’s inventory assets exceeded 1 trillion won, while Shilla and Shinsegae had about 800 billion won and 600 billion won, respectively.

The Korea Customs Service is reportedly reviewing the duty-free industry’s request positively. However, there is a precedent of rejecting the duty-free industry’s request to allow domestic sales during the 2017 THAAD (Terminal High Altitude Area Defense) incident, and internal review is expected to take some time, making it difficult to take immediate action.

This content was produced with the assistance of AI translation services.