Competition Commission v Wesgrow Potatoes (Pty) Ltd and Another (CR249Mar17/SA130Nov19) [2020] ZACT 3 (15 January 2020)

Competition Commission v Wesgrow Potatoes (Pty) Ltd and Another (CR249Mar17/SA130Nov19) [2020] ZACT 3 (15 January 2020)

The Tribunal found that the settlement agreement between the Commission, Wesgrow, and HZPC adequately addresses the exclusionary effects of the exclusive agreements that were the subject of the complaint. The undertakings provided in the agreement ensure that, for a period of three years, Wesgrow will supply Mondial plantlets to professional seed growers, seed banks, laboratories, and tissue culture facilities at cost, without imposing restrictive conditions. Wesgrow and HZPC will not enforce contractual clauses that prohibit reverse engineering, planting of farm saved seed, or require royalties for farm saved seed. The agreement also requires Wesgrow to amend its standard sales...

Citation
[2020] ZACT 3
Parties
Applicant: Competition Commission; Respondent: Wesgrow Potatoes (Pty) Ltd; Respondent: HZPC Holland B.V.
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
15 January 2020
Case Number
CR249Mar17/SA130Nov19
Procedural Posture
Settlement Application / Order Confirming Settlement Agreement
Outcome
Settlement agreement confirmed as an order of the Tribunal; complaint referral fully and finally resolved.
Judges
Y Carrim, A Ndoni, H Cheadle
Legal Topics
Exclusive Agreements, Abuse of Dominance, Market Foreclosure, Settlement Agreement, Plant Breeders Rights, Administrative Penalty
Competition Law Commercial and Corporate Exclusive Agreements Abuse of Dominance Market Foreclosure Settlement Agreement Plant Breeders Rights Administrative Penalty

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Parties

Competition Commission

Applicant

Wesgrow Potatoes (Pty) Ltd

Respondent

HZPC Holland B.V.

Respondent

Procedural Posture

Settlement Application / Order Confirming Settlement Agreement

Legal Issues

  1. 1 Whether the exclusive agreements between Wesgrow and HZPC, and Wesgrow and its customers, contravened sections 5(1) and 8 of the Competition Act.
  2. 2 Whether the conduct of Wesgrow and HZPC unlawfully foreclosed access to the Mondial seed potato varietal after expiry of plant breeder's rights.
  3. 3 Whether the settlement agreement adequately addresses the exclusionary effects and opens access to the Mondial varietal.

Ratio Decidendi

The Tribunal found that the settlement agreement between the Commission, Wesgrow, and HZPC adequately addresses the exclusionary effects of the exclusive agreements that were the subject of the complaint. The undertakings provided in the agreement ensure that, for a period of three years, Wesgrow will supply Mondial plantlets to professional seed growers, seed banks, laboratories, and tissue culture facilities at cost, without imposing restrictive conditions. Wesgrow and HZPC will not enforce contractual clauses that prohibit reverse engineering, planting of farm saved seed, or require royalties for farm saved seed. The agreement also requires Wesgrow to amend its standard sales...

Court Disposition

Settlement agreement confirmed as an order of the Tribunal; complaint referral fully and finally resolved.

Orders

  • The settlement agreement between the Competition Commission, Wesgrow Potatoes (Pty) Ltd, and HZPC Holland B.V. is approved and confirmed as an order of the Tribunal.
  • Wesgrow must place a copy of the settlement agreement on its website for a period of three years from the date of approval.