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    Oct 29, 2015

    APBS ends exclusivity practice after probe

    ASIA Pacific Breweries Singapore (APBS) has volunteered to stop supplying draught beer to retail outlets such as restaurants and bars on an exclusive basis after it was investigated by the competition authority in Singapore.

    In a statement yesterday, the Competition Commission of Singapore (CCS), which conducted the investigation, said it had acted on complaints against the only large-scale brewery here.

    A spokesman told The Straits Times three complaints were received from competing beer companies, such as microbreweries, before the start of investigations in April 2012.

    APBS produces beer labels such as Tiger Beer, Heineken and Guinness.

    The spokesman said CCS found it had reasonable grounds to suspect APBS had "abused its dominant position by imposing outlet exclusivity to retailers who purchased any of its draught beers".

    She explained that generally, exclusive arrangements by a dominant supplier dictate that a retailer buys only from him and not from his competitors.

    "Such conduct may have the effect of preventing the retailer from sourcing even small quantities from a competitor, thereby cutting off any opportunities for the competitor to grow or a new competitor to enter the market," she said. Consumers' choices are also restricted, she added.

    However, CCS has not made any finding of an infringement, and, consequently, no penalties have been imposed on APBS. This is because APBS has volunteered to stop the practice before the end of investigations, she said.

    Under competition laws here, a dominant firm is prohibited from preventing its competitors from competing effectively through exclusive business practices.

    The change will apply to all draught beer contracts with retailers from Dec 28, and APBS will have to provide proof.

    CCS said it had stopped investigations but would continue to monitor the market.

    In response to the CCS statement, Mitchell Leow, head of corporate relations at APBS, noted there was no finding of liability.

    "Draught exclusivity arrangements are not uncommon in the beer industry and competition among suppliers is intense," he said, noting that more than 300 beer brands are available in Singapore.

    Businesses and consumers welcomed the move. Adrian Sim, the director of a restaurant and a bar and the sole distributor of a range of other beer brands, said: "It's great for consumers. I'm all for it... Retailers are in the best position to know what customers want to drink."

    Other competitors also said they could try to penetrate outlets that were previously out of reach.

    Like retailers, consumers welcomed the prospect of more choice.

    "Maybe if I come across another beer brand, I can try it. At least I have the option," said Valerie Toh, 28, an office manager.