MyCC releases Market Review on Wholesale and Retail Industry

20 October 2020

On 19 August 2020, the Malaysia Competition Commission (“MyCC”) launched its “Final Report on the Market Review under the Competition Act 2010 for the Service Sector in Malaysia” (“Market Review”).

The Market Review was conducted in order for MyCC to better understand the market structure and to assess market activities along the supply chain in order to identify any anticompetitive conduct in the wholesale and retail trade for four selected products, namely:

  • processed food and beverages;
  • personal care and toiletries;
  • household cleaning products; and
  • clothing.

The Market Review also aimed to review any regulations and policy that may impede on competition in the service sector in Malaysia. The Market Review identified several market-driven issues highlighting the shift in purchasing habits of Malaysian consumers from conventional methods to digital and e-commerce platforms due to the Movement Control Order (MCO). Further, the Market Review highlighted that online platforms may result in reduced operating costs, leading to reduced prices for consumers.  

MyCC also found that majority of the industry players in Malaysia were inefficient and ill-equipped to deal with this emerging trend in online platforms, especially when burdened with the COVID-19 outbreak and the introduction of digital tax. Pursuant to the Market Review, MyCC also identified that the majority of the business owners in Malaysia are unaware of the impact that the Competition Act 2010 and the Price Control Anti-Profiteering Act 2010 would have on their businesses.

In conclusion, the key preliminary recommendations provided in the report include:

  • the facilitation of structural reforms to ensure efficiency and resiliency;
  • fostering a competitive environment towards industry best practices;
  • establishing progressive policies and regulations with long term positive impact; and
  • keeping the rules and regulations for the wholesale and retail industry
    up-to-date.

These recommendations aim to reduce unnecessary regulatory burden and bureaucracy which in turn would encourage the creation and growth of the business sector in Malaysia, particularly in the wholesale and retail industry.

Reference materials

The MyCC press release on this development can be found on its website www.mycc.gov.my by clicking here.