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April 6, 2017

Airport Authority Hong Kong Announced Award of the Liquor & Tobacco Concession

Airport Authority Hong Kong (AA) announced the award of the Liquor & Tobacco concession at Hong Kong International Airport (HKIA) on April 5th 2017 to CDF-LAGARDERE Company Limited, a partnership formed by China Duty Free Group (CDFG) and Lagardère Travel Retail, amidst a strong field of contenders. The tender award gives CDF-Lagardère Company Limited the right to operate the Liquor and Tobacco concession from end of this year.

As an international and regional aviation hub, HKIA is connecting more than 190 destinations in the world, including 40 cities in mainland China. HKIA achieved a record high of 70.5 million passenger throughput in 2016. Being one of the world's busiest passenger airport, HKIA's liquor & tobacco business carries a big weight in world duty free industry.

Charles Chen, President of CDFG stated: "It is such a distinguished honor to be awarded the Liquor and Tobacco concession at HKIA. This is a significant milestone for CDFG to grow globally. We genuinely appreciate the trust and confidence the AA has placed in us. CDFG in partnership with Lagardère Travel Retail, shall deliver a world class duty free shopping experiences at HKIA".

Dag Rasmussen, Chairman and Chief Executive Officer of Lagardère Travel Retail added: "The award of the Liquor and Tobacco license at HKIA to Lagardère Travel Retail's joint venture with CDFG is a recognition of our mutual category leadership and respective operational expertise. We are grateful for the trust placed in us by the AA and look forward to growing our long-standing partnership with one of the world's finest airports. Our teams across the world are excited by the opportunity of working in close collaboration with our brand partners to bring to life a new benchmark for quality and engagement in travel retail."

CDFG and Lagardère Travel Retail are familiar names in global travel retail industry. CDFG is the leading duty free operator in China's duty free industry, who has 248 duty free stores across mainland China, Hong Kong, Macau, Taiwan and South East Asia. Besides operating world largest single duty free shop - Sanya International Duty Free Shopping Complex, CDFG's parent company China National Travel Service Group, is China's largest tourism group following the strategic merger of CTS Group and CITS Group in 2016.

With a presence in 31 countries, 220 airports and 700 train stations in EMEA, North America and Asia-Pacific, Lagardère Travel Retail is a leading travel retail operator with a global reach. With a complete range of brands and concepts for duty-free, luxury, travel essentials and foodservice, Lagardère Travel Retail help travelers experience new horizons, every day.

Speaking of the cooperation, Emmanuel De Place, Chief Operating Officer of Lagardère Travel Retail in Asia Pacific commented: "At HKIA, destinations in China and South East Asia are the key part of the mix, complemented by a wide coverage of European and American gateways. These are passengers we know well thanks to our global footprint. East meets West in Hong Kong where Lagardere Travel Retails' alliance with CDFG will build on the respective strengths of the partners to bring a new type of duty-free shopping experience to customers at HKIA. At Lagardère Travel Retail we strive to be recognized as a leader in merchandizing, customer service and innovation. Our presence in the Asia-Pacific region has been expanding. CDFG has a unique "Travel and Duty Free" model and already reaches 500 million passengers annually. This approach leverages the diverse resources of CDFG's parent companies, including over 2,100 travel agencies, 140 hotels and 12 tourist attractions. The partnership between our companies creates exciting possibilities.

Eight stores, total operating size of around 3,400 square meters, were put on the tender of HKIA liquor and tobacco concession. Regarding how to present a complete new liquor and tobacco duty free store, CDFG Chief Operating Officer Lee Charn Cheng indicated: "We aim to set a new benchmark in Duty Free through an exciting and engaging Customer experience journey as they enter the stores. We will introduce customer interactive zones that include showcasing of manufacturing process of products, VR shopping and tasting bars. Leveraging on the combined strength of CDFG and Lagardère Travel Retail, our merchandise offer will be exciting and unique, including the World's largest Chinese Liquor and Tobacco corner, a House of Single Malt plus an exclusive Asian Liquor concept store and a dedicated Hong Kong Gourmet section to name a few. To build our Customer Service promise program, we are dedicating Customer Service Desks as well as an instore VIP lounge.

Over the next seven months, CDFG and Lagardère Travel Retail will work together with our business partners i.e. suppliers, designers and the AA to deliver this World Class store. Charles Chen, President of CDFG said: "We are committed to the AA, through our close collaboration, to deliver this exciting dream come true." Dag Rasmussen, Chairman and Chief Executive Officer of Lagardère Travel Retail added: "We will work with world leading liquor, tobacco and local fine food brands to bring a remarkable shopping experience to customers."

As one of the most cosmopolitan cities in the world, Hong Kong is an amazing city welcoming changes. We believe that future new airport liquor and tobacco stores will leave a page in HKIA travel retail history.

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