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Softly does it…Coca-Cola Singapore changes business tack after competition probe

By Ben Bouckley+

21-Jan-2013

Singapore skyline (Picture Copyright: Erwin Soo/Flickr)
Singapore skyline (Picture Copyright: Erwin Soo/Flickr)

Coca-Cola Singapore Beverages (CCSB) is changing its business practices as the nation’s competition commission agreed to end a probe into allegations of restrictive provisions in soft drink supply agreements.

These agreements cover the firm’s deals with on-premise retailers, and did include exclusivity conditions and conditional rebates, according to a statement from the Competition Commission of Singapore (CCS).

Announcing the end of its investigation, the statutory board, which investigates allegations of anti-competitive activity, said it would keep a vigilant eye on the nation’s soft drinks market.

“Having reviewed the facts and circumstances of the case, CCS has ceased its investigation into CCSB, but will continue to closely monitor market practices in the local soft drinks market,” CCS said.

Coke makes voluntary changes

CCS said that CCSB had voluntarily amended supply agreements to remove potentially anti-competitive provisions and given it an undertaking as follows.

Firstly, not to impose exclusivity restrictions on on-premise retailers for CCSB brands of non-alcoholic beverages, except in limited circumstances.

Removal of a stipulation that on-premise retailers who wish to sell other brands of beverage must first negotiate with CCSB.

An end to grant loyalty-inducing rebates that, according to CCS, “have an effect of inducing on-premise retailers to purchase exclusively, or almost exclusively from, CCSB”.

Finally, Coca-Cola’s Singapore arm will now allow on-premise retailers to use up to 20% of the cooler space it provides to store other beverage brands, when the retailers have no access to alternative cooling equipment on their premises.

Coca-Cola Singapore Beverages (CCSB) was unavailable for comment as we went to press.

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