Bucket Full (Pty) Ltd v Cartons And Labels Business of Nampak Products Ltd (018457) [2014] ZACT 52 (6 August 2014)

Bucket Full (Pty) Ltd v Cartons And Labels Business of Nampak Products Ltd (018457) [2014] ZACT 52 (6 August 2014)

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the relevant product markets due to the presence of strong countervailing power among major customers and sufficient alternative suppliers. Although the merged entity would become dominant in certain markets, customers such as BAT SA and SAB possess the ability to discipline suppliers through procurement practices and international benchmarking. Regarding public interest, the Tribunal determined that the evidence did not conclusively establish that all retrenchments were merger-specific. The Commission failed to discharge the onus to justify a three-year moratorium. The Tribunal accepted...

Citation
[2014] ZACT 52
Parties
Applicant: Bucket Full (Pty) Ltd; Respondent: Cartons And Labels Business of Nampak Products Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
6 August 2014
Case Number
018457
Procedural Posture
Merger Review / Reasons for Decision
Outcome
Merger conditionally approved subject to a two-year moratorium on retrenchments resulting from the transaction.
Judges
T Madima, A Ndoni, F Tregenna
Legal Topics
Horizontal Merger, Market Concentration, Public Interest, Employment Retrenchment, Countervailing Power, Moratorium on Retrenchment
Competition Law Commercial and Corporate Horizontal Merger Market Concentration Public Interest Employment Retrenchment Countervailing Power Moratorium on Retrenchment

Case Brief

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Parties

Bucket Full (Pty) Ltd

Applicant

Cartons And Labels Business of Nampak Products Ltd

Respondent

Procedural Posture

Merger Review / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the merger will result in significant public interest concerns, particularly regarding employment retrenchments.
  3. 3 Whether a moratorium on retrenchments should be imposed and its appropriate duration.

Ratio Decidendi

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the relevant product markets due to the presence of strong countervailing power among major customers and sufficient alternative suppliers. Although the merged entity would become dominant in certain markets, customers such as BAT SA and SAB possess the ability to discipline suppliers through procurement practices and international benchmarking. Regarding public interest, the Tribunal determined that the evidence did not conclusively establish that all retrenchments were merger-specific. The Commission failed to discharge the onus to justify a three-year moratorium. The Tribunal accepted...

Court Disposition

Merger conditionally approved subject to a two-year moratorium on retrenchments resulting from the transaction.

Orders

  • The proposed merger is approved subject to the condition that the merged entity shall not retrench any employees for a period of two years from the effective date as a result of the proposed transaction.