German duty free operator exits business at Sheremetyevo and Domodedovo

German company Gebr. Heinemann has exited the duty-free business at Domodedovo and Sheremetyevo. Now the owner of the largest duty free operators at these airports is the former co-owner of Kievskaya Ploshchad, Araz Mekhdiyev

German Gebr. Heinemann has withdrawn from the capital of two Cypriot companies that own duty-free shops at the Russian Domodedovo and Sheremetyevo airports. Its share in this business was received by Azerbaijani businessman Araz Mehdiyev, former co-owner of the Kyiv Ploshad group. This follows from extracts from the Cyprus trade register, which RBC examined.

Both deals were closed at the end of April 2024 , but were not previously reported. A representative of Gebr. Heinemann did not respond to RBC's request. it was not possible to contact Araz Mehdiyev.

How Gebr. Heinemann Developed Business in RUSSIA

One of the world's largest distributors and operators of duty-free retail stores, Gebr. Heinemann, has been operating in Russia since 2007. As Kommersant wrote, the German company initially developed its stores at Domodedovo Airport. They were represented by Travel Retail Domodedovo LLC, founded by the Cypriot company Rubis Holdings Limited. As of February 2025, the Russian company, based on data from the Federal Customs Service (FCS) registry, was the largest operator of duty-free points of sale in Domodedovo: the stores operate under the Sky Duty Free brand.

After entering Russia, Gebr. Heinemann actively increased its presence in this market: since 2009, it has been developing duty-free shops at another Moscow airport, Sheremetyevo. A few years later, the oldest Russian operator of duty-free shops, Aerofirst, came under the control of the German company: Gebr. Heinemann bought out Aeroflot's share in a joint venture with the Irish operator Aer Rianta International, Vedomosti wrote. And in 2013, Imperial Duty Free JSC was created - a joint venture between Gebr. Heinemann and Sheremetyevo Airport itself (JSC MASH).

But in the spring of 2024, the German Gebr. Heinemann ceased to be a shareholder of Rubis Holdings Limited, according to data from the Cyprus registry. As of the end of 2023, the company registered in Cyprus still remained the owner of 100% of Travel Retail Domodedovo LLC, according to the accounting statements of the Russian legal entity. In Rubis Holdings Limited itself, the German duty-free shop operator owned 50% at the time of the transaction.

At the same time, in April 2024, Gebr. Heinemann withdrew from the capital of another company registered in Cyprus, Jullianita Limited, where it also owned 50%. This company is a co-owner of Imperial Duty Free JSC, one of the largest duty free operators at Sheremetyevo at the moment. In 2020, Jullianita Limited owned 41.6% of Imperial Duty Free JSC, according to the latter's financial statements. The document lists Sheremetyevo Airport itself as the company's main shareholder; information about the owners for later periods was not disclosed in the financial statements. The airport's press service clarified to RBC that at present, MASH JSC owns 58.4% of the duty free operator, while Jullianita Limited still owns 41.6%. There is no information about the beneficiaries of the latter in MASH JSC, the Sheremetyevo representative added.

Like Gebr. Heinemann developed duty free

The company was founded in 1879 by brothers Carl and Heinrich Heinemann in the German port city of Hamburg. Their business consisted of selling goods – tobacco and ALCOHOL – to ship suppliers. Working in the free port allowed them to store and move goods without paying taxes: it was duty-free trade that became the basis of the family business.

The heyday of duty-free trade, and with it the business of the Heinemann family, began with the development of mass passenger air transportation. Since 1949, the company began servicing airports, including new items in its range - perfumes and cosmetics, wrote the publication Tharawat Magazine. At that time, Gebr. Heinemann still worked as a distributor of goods. In 1970, the company received a concession to open its first retail duty free stores at Cologne Airport, and two years later opened a store at Frankfurt Airport. This is how a new line of business developed - the sale of duty-free goods to tourists: shopping in duty free stores became part of the trip.

Today, Gebr. Heinemann is one of the largest international distributors and operators of duty-free shops. The company operates as a wholesaler and retailer at 130 international airports, on board 230 ferries and cruise ships, in 200 shops at border crossings, and also supplies goods to almost 50 airlines, according to its website. Gebr. Heinemann's turnover in 2023 was €3.6 billion. The company is owned by cousins ​​Klaus and Gunnar Heinemann, fourth-generation family members.

What is the new owner of Moscow duty free known for?

The buyer of Gebr. Heinemann's shares in Cypriot companies that operate duty free shops at Moscow airports was businessman Araz Mehdiyev, according to data from the Cyprus Trade Register. The entrepreneur became a shareholder in the companies back in 2021: he then received 25% each in Jullianita Limited and Rubis Holdings Limited.

But Araz Mehdiyev may be associated with a company that became a co-owner of the Cypriot companies several years before he appeared on the list of shareholders. We are talking about Greenway International, registered in Dubai, which Vedomosti sources called Mehdiyev's company in 2018. It appeared among the founders of Rubis Holdings Limited and Jullianita Limited in 2015-2016, according to the extracts. Initially, Greenway International owned 50% in each company, but with Mehdiyev's entry into their capital, its share decreased to 25%. Since the end of April 2024, the Azerbaijani businessman has been listed in the materials of Rubis Holdings Limited and Jullianita Limited as their sole owner.

Mekhdiyev owns another duty-free shop operator in Sheremetyevo. The businessman is the sole beneficiary of Travel Retail Sheremetyevo LLC, registered in the fall of 2022, according to the company's financial statements for the past year. This operator, according to the Federal Customs Service register, owns the largest number of duty-free shops at the airport.

In addition, Araz Mehdiyev is known for his ties to the Kievskaya Ploshad group of God Nisanov and Zarakh Iliev. In 2018, Mehdiyev became a minority shareholder in Russia's largest rentier: he received 12-15% in six companies that are part of the Kievskaya Ploshad group. They own, among other things, the Radisson Collection Hotel Moscow (formerly known as Ukraina), the Sadovod market, the Moscow automobile shopping center on Kashirka, and the MTK Grand and Grand Yug furniture shopping centers. Previously, these shares in the companies belonged to Nisanov's partner, entrepreneur Ilgam Ragimov.

God Nisanov, in an interview with RBC in 2019, said that the founders of the companies of the Kyiv Ploshchad group were his relatives and the relatives of his partners Iliev and Ragimov. The Azerbaijani publication Vesti.az called Mehdiyev Ragimov's son-in-law. According to SPARK, Mehdiyev ceased to be a co-owner of the group's structures in 2019. They were again transferred to Ragimov, who continues to own shares in these companies to this day.

What are assets?

There are two duty-free operators at Domodedovo Airport — Travel Retail Domodedovo LLC and RegStaer (the general partner and co-owner of part of the assets of this company is the Swiss operator of duty free shops Avolta, previously called Dufry), the press service of the airport clarified to RBK. In the international sector of the airport, Travel Retail Domodedovo operates the main duty free shop in the walk-through format with an area of ​​4.5 thousand square meters — the largest in Russia, three adjacent boutique shops Belle You, Underwear and Kids, as well as three Last Minute Shop outlets with an area of ​​93 to 165 square meters in the immediate vicinity of the gates, the airport representative lists. In addition to duty-free shops, the company is also developing duty paid outlets at the airport (the price of these goods already includes VAT, excise taxes and other fees stipulated by Russian tax legislation). In the domestic air sector, the retailer operates three duty paid stores with a total area of ​​177 sq. m.

The total area of ​​premises leased by Travel Retail Domodedovo exceeds 6.4 thousand square meters, the airport representative points out. RegStaer, for comparison, has a smaller total area of ​​facilities at the airport — 4.2 thousand square meters. Various concepts and trade formats provide maximum coverage of target groups, the Domodedovo press service notes. “Large areas of the main stores allow for a wide selection of each product category, and the Last Minute Shop format presents bestsellers for “quick” purchases before boarding an aircraft. Thematic stores cover the needs of individual groups of passengers,” the airport representative added.

The website of Travel Retail Domodedovo itself states that it operates 22 stores under the Sky Duty Free brand at five international airports in Russia. In addition to Domodedovo, these are Zhukovsky near Moscow, and the airports of Yekaterinburg, Samara, and Nizhny Novgorod.

As for Imperial Duty Free in Sheremetyevo, based on the Federal Customs Service register, it carries out duty free trade in stores with a total area of ​​3.3 thousand square meters. Travel Retail Sheremetyevo (Sheremetyevo Duty Free brand), which belongs to the same co-owner, has 5.9 thousand square meters. According to the financial statements of Imperial Duty Free for 2024, it follows that it has more than 50 retail stores at the airport (including under the brands Bulgari, Max Mara, Etro, CK Underwear and others), as well as three warehouses, one of which is an alcohol warehouse. In addition to duty-free shops, the company has duty paid shops in terminals B and D of Sheremetyevo.

What's Happening with Duty Free in Russia

Duty free shops directly depend on international air traffic and passenger flow at airports, the Eurasian Duty Free Association explained earlier. The industry suffered greatly during the pandemic: according to the association, due to covid-19, the duty free market has decreased to 70% of its volume in 2019 — from $600 million to $400 million in 2021. A new blow to the market was the anti-Russian sanctions introduced in 2022 in response to the start of a special military operation in Ukraine: they affected international air traffic with Russia and the supply of goods from the world's largest brands to the country.

In the spring of 2022, the industry found itself in a "critical situation": airport owners asked the government to allow them to sell duty-free goods to passengers on domestic flights. This measure was never introduced, but in the summer of 2022, the State Duma allowed the sale of duty free goods on flights from Russia to the EAEU countries (Armenia, Belarus, Kazakhstan and Kyrgyzstan). This measure helped some companies: for example, the RegStaer operator at Moscow's Vnukovo Airport increased its revenue by 33% in 2022, and at St. Petersburg's Pulkovo, it showed growth of 29.6%. In addition to passengers flying to the EAEU, RegStaer's revenue growth was influenced by the replacement of goods from brands that left Russia, as well as savings on uniforms and training for staff. And in 2023, some duty free shops were able to increase their revenues thanks to the growth in the number of international flights from regional airports, as well as the return of Chinese tourists to Russia - for example, this was the case at the Vladivostok airport. But globally, the duty-free market in Russia continued to experience the consequences of the reduction in international flights and tourist passenger traffic, explained the Russian Union of Travel Industry: if earlier the share of international flights averaged 40%, then in 2023 it was only 20%.

Imperial Duty Free's revenue in 2024 remained at the previous year's level of RUB 6.2 billion, while net profit increased by 53.6% to RUB 739.6 million, according to the legal entity's financial statements. Revenue from its core business fell sharply: duty free stores brought the company almost half as much as in 2023 (RUB 1.2 billion versus RUB 2.3 billion a year earlier), while revenue from duty paid retail trade almost completely ceased (it brought in RUB 4.4 million versus RUB 1.3 billion in 2023). Imperial Duty Free's main source of income was space leasing services, which grew by 90% to RUB 4.8 billion. As stated in its financial statements, the company decided to sublease part of its space in 2023 — the transfer was carried out throughout 2024.

At the same time, Travel Retail Sheremetyevo, which has a common co-owner with Imperial Duty Free, saw its revenue for 2024 more than double compared to the previous year — from RUB 6 billion to RUB 12 billion, net profit by 35% to RUB 16 million. The growth was driven by doubled retail revenue (in duty free stores — by 114.9% to RUB 8.2 billion, in duty paid — by 83.3% to RUB 4.2 billion). The main factor in the increase in revenue was the opening of new retail space, according to the company's financial statements.

Travel Retail Domodedovo has not yet published its financial statements for 2024 at the time of publication. In 2023, its revenue increased by 31% compared to the previous year, to RUB 2.3 billion. But the company was unprofitable at least a year ago: Travel Retail Domodedovo's loss for 2023 was almost RUB 347 million, compared to a net profit of RUB 111.4 million for the previous annual period.

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