The National Assembly yesterday passed in the second reading the commercial agencies law, but after introducing a crucial amendment that allows more than one agent or dealer for commodities in the country, officially breaking the monopoly of agents over imports. [Source]
Does this mean what I think it means? Does this mean there can now be more than one BMW dealer or more than one Nikon dealer in Kuwait?
26 replies on “No More Monopolies in Kuwait?”
Ford is already splitting dealership between Al Wazzan and Alghanim (chevrolet dealers). So not sure if the law is new, or just fixing it. there are already other brands that operate under different distributor, Samsung is one of them.
Al Andalus Trading Company is the chief distributor of SAMSUNG in Kuwait. So you can find it at different shops but there is only one importer. Or at least I think so.
there is also Wahran. The Samsung flagship store in Al Hamra for instance is Wahran not Andalus.
Wahran distributes only Samsung mobiles and mobile accessories…. Andalus almost everything else from TVs to household electronics but not the mobiles…
Alghanim’s takeover of Ford has nothing to with this I believe.
When did Alghanim takeover Ford ?
Yep. That’s what I understood of it…
Maybe Miss Fajer can shed more light on the subject…
Possible, but not likely. Some other GCC countries have also changed their commercial laws and removed the monopolistic agencies clauses but nothing changed. The law says a brand can have more than one agent but that doesn’t mean that the brand will want to appoint another agent to compete with the existing agent that they’ve been happy with for decades.
Having an anti-monopoly law doesn’t mean you won’t have monopolies operating in Kuwait. If a company, say for example Al Andalus Trading Company, negotiates an exclusive representation deal with the provider of a product/service, such as Samsung, then the monopoly will continue to exist. This law, if enforced, will only make a difference if a company like Samsung is OK with having more merchants deal with it directly rather than one major player like Al Andalus.
For specific goods it allows it but as mentioned doesn’t mean the seller has to abide. If they’re comfortable working with a distributor they can keep the agreement in place.
Now for things like Franchises it’s not like you can suddenly go open a Starbucks, Starbucks would have to agree to that and they most likely wouldn’t.
Actually, it’s not as simple as that. if you read the law carefully, you will find that it is completely in the favor of the current agent (no surprise there looking at the parliament members).
If you, as a consumer, want to bring a product on your own then this product has to match the specs of the local dealer (set by the dealer not the country). Imagine now wanting to bring a new motorcycle or car from the states!
There are many other little legal comments and paragraphs that was amended to the original suggestion by the chamber of commerce that swings this law in their favor.
The normal Joe will think YAY! no monopoly, but the fact is that there is more control by the agent. at least to my understanding and I might be mistaken, but this is what I gathered from reading on this law.
Dear JS,
I would appreciate if you could share your thoughts on “there is more control by the agent”. Do you have legal comments on the law?
Thank you.
Before Invasion BMW was with Alghanim ?
If I’m not mistaken,it was the Alateeqi family.
Wouldn’t any company want as many agents and dealers in one country as than can possibly have. The price the original company sells is pretty much fixed, the extra the local agent or dealer takes is what will suffer.
It may also depend on the brand obviously, big brands won’t want to gamble on first-timers.
No, it leads to a drop in quality and you can’t police it as easily. If you ever hear a complaint with your brand in Kuwait it’s good to know there’s a single person to blame.
I don’t see how the quality of the product will drop. You mean quality of product not quality of service right?
You’re right, policing would be difficult. Bes I didn’t literarily mean every Tom Dick and Harry shop in Kuwait. You can choose a few good agents based on shop distribution. That would be easier to control. And as a big brand franchise, you’d have some sort of standard for franchisees.
This is going to lead to a feud between the big guys. Say both Alghanim and Al-Sayer go after Toyota. Only one will survive the catfight – leading to a monopoly again 😊 !
LOL!
LOL!
So can we now order our protein shakes online? Or will they be confiscated by the customs?
I always wondered why they were so expensive here! There’s only one company allowed to import them?
More than one Shani links a day – https://248am.com/mark/events/happy-shani-day-3/
😀
Here’s how most likely the next steps will flow: Since now by law monopoly is not a legal privilege, current dealers will make bigger purchase orders and promises to convince the brands they represent that they are the best partner for them in Kuwait. This approach will lead to more promos because they will need to liquidate more stock. While consumers might enjoy the savings and price wars here and there, quality of service might get affected and eventually, profitability. At such point, competitors will start negotiating with the brands abroad and some shifts will happen. Monopoly made local businesses lazy for a long time. Let’s hope they understand that only way to sustainable growth and differentiate themselves is by truly focusing on adding value to the customer experience. Bottomline, it’s about time. Let the real business practice begin.
Thanks Loaay for that insight…
I doubt it will happen but I sure hope so. BMW is good example!
I went to check out the M4, the top specs online is around 24,000 dinar. They’re selling their M4 for 30,000 dinar and I’m not even sure if its fully specs or not. The 740i full specs online is 28,500 dinar and they’re selling it for 40,000 dinar!
The entire BMW showroom is ridiculious… their entire range is priced 40K, 30K, 40K, 30K, 50K…
I’m surprised there are dumb people out there willing to over pay just to show off. We all know how “good” BMW Kuwait after sale service so don’t tell me you’re paying for a service!