APB ends exclusive beer supply practice after competition probe

Asia Pacific Breweries Singapore (APB) said Wednesday (28 Oct) that it is committed to stop supplying draught beer to retail outlets on an exclusive basis after an investigation by the competition authority into the practice by the brewery giant.

Acting on information provided by three complainants, who were from competing beer suppliers, the Competition Commission of Singapore (CCS) told Yahoo Singapore that it began investigating APB’s practice in April 2012.

CCS later found an outlet-exclusivity clause in APB’s contracts with retail outlets, which prevented them from selling draught beers from other suppliers. The investigation ended with no finding of liability.

APB will undertake a voluntary commitment to end the exclusive business practice for all draught beer contracts signed with retail outlets on and after 28 December, CCS said. APB will be required to provide supporting information to affirm that commitment, the authority added.

In response to queries by Yahoo Singapore, APB corporate relations head Mitchell Leow said that brewer made the commitment as of Wednesday (28 0ct), adding that the practice was “not uncommon in the beer industry”.

“Competition among suppliers is intense. Retailers always have and continue to have a choice of beer supplier in Singapore,” he said.

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 supplies.”

CCS would continue to monitor the beer market and encourages market participants to report any potentially anti-competitive business practices. According to the Euromonitor Singapore, the total value of retail sales of beer in Singapore in 2014 was estimated to be $2.28 billion.

When asked if there will be an impact on APB’s sales, the brewery said it was “too soon” to provide any projections.

Formed in 2005, CCS administers and enforces the Competition Act, which prohibits abuse of a dominant position in the marketplace. The Act came into force on 1 January, 2006.