Daybreak Farms (Pty) Ltd v Rossgro Chickens (Pty) Ltd (57/LM/Sep10) [2010] ZACT 84 (29 November 2010)

Daybreak Farms (Pty) Ltd v Rossgro Chickens (Pty) Ltd (57/LM/Sep10) [2010] ZACT 84 (29 November 2010)

The Tribunal found that the horizontal overlap between Daybreak Farms and Rossgro Chickens in the market for frozen poultry products was minimal, resulting in a combined market share of only 5.5%. The merged entity would continue to face competition from larger players such as Rainbow, Astral, and Supreme. Vertical relationships identified did not present foreclosure risks due to the merged entity's limited capacity and the presence of alternative suppliers. The pending cartel investigation in the poultry sector related to fresh poultry products in a different region and was unlikely to be affected by the merger. The employment impact was limited to 14 retrenchments, mainly among junior...

Citation
[2010] ZACT 84
Parties
Applicant: Daybreak Farms (Pty) Ltd; Respondent: Rossgro Chickens (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
29 November 2010
Case Number
57/LM/Sep10
Procedural Posture
Merger Application / Approval
Outcome
Merger approved unconditionally.
Judges
Yasmin Carrim, Andreas Wessels, Medi Mokuena
Legal Topics
Horizontal Merger, Vertical Merger, Market Share Analysis, Cartel Investigation, Employment Impact
Competition Law Commercial and Corporate Horizontal Merger Vertical Merger Market Share Analysis Cartel Investigation Employment Impact

Case Brief

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Parties

Daybreak Farms (Pty) Ltd

Applicant

Rossgro Chickens (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Approval

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the merger will strengthen cartel conduct under investigation in the poultry sector.
  3. 3 Whether the merger will result in significant job losses.

Ratio Decidendi

The Tribunal found that the horizontal overlap between Daybreak Farms and Rossgro Chickens in the market for frozen poultry products was minimal, resulting in a combined market share of only 5.5%. The merged entity would continue to face competition from larger players such as Rainbow, Astral, and Supreme. Vertical relationships identified did not present foreclosure risks due to the merged entity's limited capacity and the presence of alternative suppliers. The pending cartel investigation in the poultry sector related to fresh poultry products in a different region and was unlikely to be affected by the merger. The employment impact was limited to 14 retrenchments, mainly among junior...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Daybreak Farms (Pty) Ltd and Rossgro Chickens (Pty) Ltd is approved without conditions.