The Israel Airports Authority (IAA) recently published a tender for operating two duty-free shops at the country's border crossing to Sinai (Menachem Begin border crossing) and Jordan (Jordan River border crossing). The winner will operate the two stores starting in January 2025. The current tender will expire at the end of December this year.
Currently, the total area of the tender’s shops stands at 580 square meters, not including warehouses and pick-up zones. The IAA will allow the winner to double the shop’s area at the Sinai crossing to 200 square meters, twice its current size. The authority also included in the tender the ability for these shops to allow a buy-and-hold service, similar to that operating at Ben Gurion Airport.
The new tender is set for a period of up to 5 years, with an option to extend the contract for up to an additional 36 months. As part of the new tender, the competition among bidders will be based on a percentage of the turnover at each of the shops.
According to market sources, the three duty-free companies operating in the country are expected to bid for the tender: Teddy Sagi's Layam company, the Falic family’s Duty-Free Americas and Heinemann, which operates Ben Gurion Airport’s duty-free store.
The Falic family owns the largest duty-free store network in the U.S. and owns stores at border crossings in South America and China. Teddy Sagi bought Layam from the Sakal Group, which bought it from Zim.
The company operates several duty-free stores at Ben Gurion Airport and supplies duty-free products on commercial flights. German company Heinemann acquired the rights to operate the duty-free stores at Ben Gurion, Ramon, and Taba airports.
Both Israeli and international chains that operate in the retail, pharmacy, cosmetics, electronics, and sports sectors can apply for the tender. According to IAA data, the annual turnover of duty-free shops at the two border crossings stood at NIS 45 million in 2023.
The Menachem Begin border crossing is located about 10 kilometers south of Eilat and serves as Israel’s southernmost border point. Israeli citizens and tourists can cross the border to Sinai and back through this terminal, which operates 24 hours per day.
The Jordan River border crossing is located about 10 kilometers east of Beit She'an, near the historic Sheikh Hussein Bridge. The crossing is intended for the passage of Israeli and tourist passengers, as well as delivery of goods between the two countries and is open daily from morning until late evening.
"During 2023 and until the outbreak of the war, record high traffic was seen at both terminals, with a total passenger volume of over 2 million passengers,” the IAA said in a statement. “After a sharp decline in the number of passengers crossing during the first months of the war, recent months have seen a resurgence in travel.”
“This is partly due to the cancellation of direct flights between Israel and Turkey. According to data from the Israel Airports Authority, the best-selling products in duty-free shops at both crossings are tobacco and alcohol products,” the statement added.