Will new laws affect drinking industry?

A couple of major new laws by the Ministry of Domestic Trade might have an impact on drinkers.

The Competition Act 2010, which will be enforced from January 1st next year, is meant to protect free competition and promote a level playing field for businesses, primarily to benefit consumers, and make this country more open and competitive. More details in a feature by The Star.

Provisions include those against price-fixing, tie-ins and price-discrimination. One that is of interest is entitled “Exclusive Dealing”, which prohibits unfair trading terms such as exclusivity. Will that affect the main players here such as the Malaysian beer industry?

Right now, most bars are forced to sell either GAB or Carlsberg Malaysia’s brands on tap. So if an outlet serves drafts such as Carlsberg or Hoegaarden, there cant be Guinness or Tiger draft.

Draft beers are getting more popular, but limited in variety due to allegiance to particular breweries

Which limits a consumer’s outlet choice according to which beer he prefers. And bar owners too have to agree to those terms and shut out the competitor, and in return get rewarded by the brewery in various ways.

It doesnt affect the liquor guys so much i guess. Moet Hennessy Diageo and Pernod Ricard Malaysia are the biggest, so this law might help the little guys.

The other relevant law is the Price Control and Anti-Profiteering Act 2010, which has already kicked in this month. Besides making sure all outlets display prices for all products prominently, there is a new provision, which makes it illegal to make unreasonably high profits, or profiteer.

The law also controls prices increases. Say the tax on booze or whatever product is increased by 5%. If the retailer then increases price disproportionately, he can be guilty of an offence, with massive fines up to 100k for individuals and 500k for companies. Consumers themselves are the primary enforcers of this law, and can contact the Malaysian Competition Commission to make a complaint.

This is to control the unjustified price increases by businesses in this country, which has been sending our standard of living downhill.

About time i say.

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4 thoughts on “Will new laws affect drinking industry?

  1. i hope it warrants strange unpredicted consequences, destroys the alcohol industry in general through utterly unbalanced taxes, and forces the governments hand in banning all forms of alcohol entirely.

    which while harsh, would be the first truly good thing this government would do

    crucify me anyone?

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