Asia Pacific Breweries Singapore to axe exclusivity practice after probe
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Asia Pacific Breweries Singapore has agreed to stop supplying draught beer to retail outlets on an exclusive basis after it was investigated by the Competition Commission of Singapore (CCS).
The CCS said in a statement on Wednesday that it had acted on complaints, adding: “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.”
Under competition laws here, a dominant firm is prohibited from preventing or impeding its competitors from competing effectively through exclusive business practices.
In its investigation, the CCS obtained information on the beer market in Singapore from retailers and beer suppliers.
Asia Pacific Breweries Singapore(APBS) has since provided the CCS with a voluntary commitment to cease its outlet exclusivity practice.
The change in the company’s business practices will be applicable to all draught beer contracts entered into with retailers on and after Dec 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.
The CCS will continue to monitor market practices
CCS chief executive Toh Han Li said: “The removal of these exclusive business practices 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 added that in general, exclusive agreements made by a dominant firm that harm competition may be illegal under the Competition Act.
Questions & Answers
Q.What prompted the Competition Commission of Singapore to investigate Asia Pacific Breweries Singapore?
What prompted the Competition Commission of Singapore to investigate Asia Pacific Breweries Singapore?
The Competition Commission of Singapore (CCS) launched its investigation into Asia Pacific Breweries Singapore (APBS) after receiving complaints regarding the company's outlet-exclusivity practice for supplying draught beer.
Q.When will the changes to APBS's draught beer contracts take effect?
When will the changes to APBS's draught beer contracts take effect?
The change in APBS's business practices will apply to all draught beer contracts entered into with retailers on and after December 28, 2015. This includes both new agreements and the renewal of existing contracts.
Q.What impact does the CCS expect this decision to have on the market?
What impact does the CCS expect this decision to have on the market?
The CCS anticipates that removing exclusive practices will allow retailers to stock more diverse draught beers. This should create a more vibrant market, offering increased choices for consumers and new opportunities for suppliers, including microbreweries.