Asia Pacific Breweries has been forced to drop exclusive beer supply deals after a probe by the Competition Commission of Singapore.
Acting on consumer complaints, the CCS investigated Asia Pacific Breweries (Singapore)’s practice of supplying draught beer to retail outlets solely on an exclusive basis. Under competition law in Singapore, a dominant firm is prohibited from preventing or impeding its competitors from competing effectively through exclusive business practices.
The outlet-exclusivity practice had prevented retail outlets from selling draught beers from competing suppliers and restricted the choices of draught beers available to retailers and consumers.
Rival suppliers will be likely to take note as the agreement will apply equally to all companies. No longer can retailers be forced to sign to a single brand to the exclusion of others.
“In the course of its investigations, CCS obtained information on the beer market in Singapore from retailers and beer suppliers. CCS also commissioned a market survey to gather information on market practices,” the regulatory body said in a statement.
“APBS has since provided CCS with a voluntary commitment to cease its outlet-exclusivity practice. Moving forward, APBS will not impose outlet-exclusivity conditions in its supply of draught beer contracts to retailers.”
The CCS said feedback from consultations with various beer suppliers and retailers in relation to the practice indicates the absence of outlet exclusivity will be a welcome development for the industry.
The change in APBS’s business practices will be applicable to all draught beer contracts entered into with retailers on and after December 28, 2015, including new and renewal contracts. APBS will also be required to provide CCS with documents to show that these changes have taken effect.
“As the voluntary commitment adequately addresses CCS’s concerns, CCS has ceased its investigation. CCS will, however, continue to monitor market practices, and reserves the right to investigate any breach of the commitment or any other anti-competitive practices by APBS.”
CCS CEO Toh Han Li said the removal of these exclusive business practices will allow beer suppliers to compete on merit in offering their draught beers to retail outlets.
“This will allow retailers to stock a greater variety of draught beers, leading to a more vibrant market with more choices for consumers, as well as opportunities for existing suppliers and new entrants including microbreweries and craft beer suppliers,” he said.
“CCS will continue to monitor the beer market to ensure that there are no impediments to competition, and market participants are encouraged to report any potentially anti-competitive business practices to CCS.”
