Fraser & Neave will not enforce soft drinks non-compete clause with Heineken

Fraser & Neave has agreed not to enforce an agreement that it signed with Heineken which would have prevented Heineken from entering Singapore's soft drinks market. -- FILE PHOTO: REUTERS
Fraser & Neave has agreed not to enforce an agreement that it signed with Heineken which would have prevented Heineken from entering Singapore's soft drinks market. -- FILE PHOTO: REUTERS

Fraser & Neave has agreed not to enforce an agreement with Heineken, which would have prevented the Dutch brewer from entering Singapore's soft drinks market.

F&N said in a statement on Monday that this non-compete clause was part of the deal made when Heineken bought out F&N's 50 per cent stake in Asia Pacific Investment Pte Ltd last year.

The deal was that Heineken would not manufacture, distribute or sell soft drinks in Singapore for two years from the completion of the acquisition. This non-compete cause will cease effect after Nov 14 next year.

However, F&N said it has offered not to enforce the clause. It said it has been in talks with the Competition Commission of Singapore (CCS), "and following such discussions, has offered a voluntary undertaking to the CCS not to enforce the soft drinks non-compete clause with respect to Singapore".

F&N added that it was unaware of any plans by Heineken to carry out any soft drinks business activities in Singapore, and in making its decision, it had taken into account the time and resources it would have to spend on further discussions with the CCS.

It also considered the fact that the clause will expire in about a year's time anyway.

The CCS said in its own statement that it had begun an investigation into the clause in January this year.

But since F&N has agreed not to enforce it in Singapore, the CCS has ceased its investigations, but will continue to closely monitor market practices in the local soft drinks market.