MTI warns business association not to increase liquor prices unfairly for profits

MTI said stressed that businesses should not take advantage of the increase in liquor duties to raise prices unduly at the expense of consumers.

SINGAPORE - The Ministry of Trade and Industry (MTI) has issued a warning over liquor prices to Mr Thomas Foo, Chairman of Kheng Keow Coffee Merchants Restaurant and Bar-Owners Association, after he indicated to the media that a bottle of beer that costs around $6 could go up to over $7.

In a statement released to the media on Monday, MTI stressed that businesses should not take advantage of the increase in liquor duties to raise prices unduly at the expense of consumers.

This is in response to recent media reports that some vendors might raise prices due to the increase in liquor excise duties announced during Budget 2014.

The Competition Commission of Singapore (CCS) has advised the Kheng Keow Coffee Merchants Restaurant and Bar-Owners Association to refrain from making statements which might be seen as encouraging or coordinating among its members to raise prices as it could be an infringement of section 34 of the Competition Act.

MTI added that all businesses should determine their own prices independently.

Based on the Ministry of Finance (MOF)'s assessment, if the additional duty is fully passed on to consumers, the price of a typical can of beer (323 ml) should increase by about 20 cents, while a typical bottle of beer (663ml) should increase by only about 40 cents at coffee shops.

"While we fully expect liquor prices to adjust as a result of the increase in excise duties, sellers should not take advantage of this to raise prices unreasonably," Senior Minister of State for Trade and Industry, Mr Lee Yi Shyan said.

"MTI will work closely with the Consumer Association of Singapore (CASE) and the CCS to monitor the market for any unfair pricing and coordinated price hikes which are anti-competitive".

He added, "Consumers should exercise their rights to walk away from merchants pricing alcohol unreasonably.

"Consumers can also report any errant sellers to the Consumers Association of Singapore (CASE)."

Echoing Mr Lee's comments on liquor prices, Mr Lim Biow Chuan, President of CASE said, "CASE is of the view that any increase in prices of liquor should be reasonable.

"Retailers should not take advantage of the hike in liquor duties to profit by increasing prices beyond the tax amount."

Mr Seah Kian Peng, CEO, NTUC FairPrice, said, "In light of the recent tax adjustment on alcohol, FairPrice is supportive of MTI's stand against profiteering.

"FairPrice is maintaining the prices of current alcohol products as our existing stocks have not been affected by the tax increase.

"Pending a review with our suppliers, we will ensure that price changes for new stocks will be within the new alcohol tax framework.

"In the meantime, we have disallowed the bulk buying of alcohol products."

grongloh@sph.com.sg