On the 21 May 2012, FOMCA filed a complaint against Nestle with the Malaysian Competition Commission. 

The complaint was related to two issues. Firstly through the Brand Equity Protection Policy (BEPP), for certain products Nestle was fixing the prices that has to be sold at the retail level. Retailers thus did not have the option to sell those products at a lower price.  Additionally, there were negative consequences to the retailer if they did go ahead and sold at lower prices. Thus retailers were forced to sell at prices fixed by the manufacturer, without the option of reducing prices to attract consumer. Clearly, this was a case of resale price maintenance, an anti-competitive behavior that contravened the provisions of the Act. The consumer thus suffered and their welfare was diminished, for they were forced to pay higher prices for the products concerned.

Secondly, FOMCA stated in no uncertain terms that Nestle should never be given any form of exemption by the Malaysian Competition Commission. Locally and globally, there have been many consumer issues with this multi-national.

Thus it was great to see that the Malaysian Competition Commission has through discussions with Nestle resolved these two issues.  Firstly, Nestle has withdrawn its application for exemption.  Secondly, the BEPP mechanism, a clear anti-competitive behavior would be dismantled.

The Chairperson of the Malaysian Competition Commission should be lauded for her stern and uncompromising action against any party, no matter how big and powerful, to ensure that the provisions of the act are enforced.  Through the decisive action against Nestle, consumers in Malaysia may have a sense of optimism of the ability of the Commission to protect and enhance the welfare of consumers.  Further, to eliminate any form of anti-competitive behaviors in the market that would have a negative consequence on consumer protection and consumer welfare.

The consumer movement would continue to monitor the market to ensure that all forms of anti-competitive behaviors that would negatively impact consumers through higher prices or lower value, be eliminated and that through a truly free and open market, consumers would benefit.

Dato' Paul Selva Raj
CEO FOMCA