SINGAPORE — The competition watchdog has given NTUC Enterprise the green light to buy over home-grown food centre operator Kopitiam, after deciding that the move will not lead to a “substantial lessening of competition”.

The Competition and Consumer Commission of Singapore (CCCS) found that NTUC Enterprise and Kopitiam are not each other’s closest competitors, and there are other strong rivals including Koufu, Food Junction, Food Republic, Kimly and Broadway.

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Furthermore, the barriers to entry and expansion of eating establishments are “likely to be low”, the commission said in a statement on Thursday (Dec 20).

The decision came three months after NTUC Enterprise announced its plans for a takeover by the end of the year for an undisclosed sum.

Kopitiam, which was founded in 1988, operates 80 establishments — 56 food courts, 21 coffee shops, three hawker centres — and two central kitchens, dishing out about 350,000 meals daily. It manages more than 1,000 food stalls and employs over 1,000 people.

NTUC Foodfare, which is overseen by NTUC Enterprise, runs 14 food courts, 10 coffee shops and nine hawker centres.

Both parties previously said that after the takeover, NTUC Foodfare and Kopitiam will continue to operate separately, with “their respective management teams and employees remaining in place”.

The CCCS noted that NTUC Enterprise and Kopitiam operate four out of seven new hawker centres that were built after 2011, and are subject to the National Environment Agency’s oversight. There are 114 hawker centres in Singapore.

Given the relatively “small” number of hawker centres operated by the merged entity, there is “little prospect of a substantial lessening of competition occurring in the market for the rental of stalls in hawker centres”, said the commission.

The CCCS also felt that the merged entity would not have the ability or incentive to shut out competitors and to mandate purchases through central kitchens and supply chain networks.

Read also

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• Competition watchdog calls for public feedback on NTUC Enterprise’s proposed takeover of Kopitiam
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As part of its assessment, CCCS evaluated relevant information and conducted a public consultation from Oct 1 to 17.

It engaged landlords, competitors, customers, representatives from hawker associations and various government agencies to gather relevant information necessary for the watchdog to conduct its assessment.

Although a majority did not voice objections to the takeover, there were a few who raised concerns.

They relate mainly to Foodfare becoming a bigger player in the operation of hawker centres, coffee shops and food courts, thus enjoying “stronger bargaining power” over the landlords. Food vendors and consumers may face "higher rental fees and food prices” as a result of fewer operators, those who had concerns felt.

In a separate statement, NTUC Enterprise said that the takeover will “strengthen our ability to provide affordable cooked food, thereby furthering our social mission of moderating the cost of living”.

For one, the operator is looking to reduce coffee and tea prices, with details to be announced in the first quarter of 2019.

It is also working to extend existing initiatives meant for lower-income consumers to other outlets.