Singapore: Asia Pacific Breweries to stop supplying draught beer to retailers on exclusive basis

Asia Pacific Breweries (Singapore) will cease its practice of supplying draught beer to retailers on an exclusive basis, following a probe by the Competition Commission of Singapore (CCS), The Business Times reported on October 28.

The company has given CCS 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 change in APBS's business practices will be applicable to all draught beer contracts entered into with retailers on and after Dec 28, including new and renewal contracts. APBS will also be required to provide CCS with documents to show that these changes have taken effect.

"The removal of these exclusive business practices will allow beer suppliers to compete on merit in offering their draught beers to retail outlets," said Toh Han Li, chief executive officer of statutory board CCS.

"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."

Acting on complaints, CCS had investigated APBS in relation to its practice of supplying draught beer to retail outlets solely on an exclusive basis.

Under the competition law in Singapore, a dominant firm is prohibited from preventing or impeding its competitors from competing effectively through exclusive business practices.

CCS noted that APBS's 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.

As part of its probe, 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.

Based on the feedback received from various beer suppliers and retailers on the practice of outlet exclusivity in the market, CCS said the absence of outlet exclusivity will be a welcome development for the industry. CCS has ceased its investigation but will continue to monitor market practices.

28 October, 2015