MULTINATIONAL retailer Duty Free Shoppers (DFS) has lost the billion-dollar management contract for alcohol and tobacco sales at Kai Tak Airport. Mystery consortium Hong Kong Kai Tak International Duty Free Shop won the lucrative concession by guaranteeing the Government more than $2 million a week in royalties. The consortium formed for the Kai Tak bid was believed to be mainland backed. The decision surprised aviation experts and sparked concerns that there could be a repeat of the controversy which clouded the Government's last award of the contract. It has given the consortium pole position for the massive retailing concessions to be awarded soon for Hong Kong's new Chek Lap Kok airport, scheduled to open at the end of 1997. According to official documents, the consortium has guaranteed the Government a minimum of $56 million for each six-month term of the deal. The DFS management contract ends on August 31. Despite losing the alcohol and tobacco management deal, DFS president James Hurley said his company would retain its general merchandising operation at the airport. DFS, whose owners include flamboyant millionaire Robert Miller, is part of a global group with operations in a dozen countries and is the largest duty-free operator in the world. In 1988 it lost a bid for the airport concession which it had held for 26 years. The winning bidder then was Kui Fat Investment Corporation, which was backed by mainland Chinese interests. Within months of taking over the concessions, the company hit major financial difficulties. A bitter row erupted in which DFS called for a review of the decision after accusing the Civil Aviation Department of basing its award of the contract on the amount of the bid rather than the operator's experience of the business. After Kui Fat began losing about $500,000 a day, DFS was called back to manage the duty-free operations. The duty-free liquor and tobacco concession at Kai Tak is estimated to generate more than a billion dollars a year in turnover. The new consortium's contract will run until the transfer of sovereignty, after which it will be renewed on a monthly basis until Chek Lap Kok opens.