Diageo Africa B.V v Newshelf 1167 (Pty) Ltd (107/LM/Dec12) [2013] ZACT 26; [2013] 1 CPLR 184 (CT) (15 April 2013)

Diageo Africa B.V v Newshelf 1167 (Pty) Ltd (107/LM/Dec12) [2013] ZACT 26; [2013] 1 CPLR 184 (CT) (15 April 2013)

The Tribunal found that the relevant product markets for clear beer and sorghum beer are distinct, with no overlap between the merging parties in these segments. Although both parties manufacture flavoured alcoholic beverages (FABs), the overlap is minimal, with a combined post-merger market share of approximately 19% and an accretion of less than 1%. Competitors such as Distell, SAB, and Halewood International remain active in the market. Concerns raised by an anonymous third party regarding food security, pricing, and portfolio effects were found not to be merger-specific or supported by evidence. The Tribunal was satisfied that the merger would not result in a substantial prevention or...

Citation
[2013] ZACT 26
Parties
Applicant: Diageo Africa B.V.; Respondent: Newshelf 1167 (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
15 April 2013
Case Number
107/LM/Dec12
Procedural Posture
Merger Control / Tribunal Approval of Merger
Outcome
Merger approved unconditionally.
Judges
Andreas Wessels, Anton Roskam, Mondo Mazwai
Legal Topics
Merger Control, Horizontal Overlap, Product Market Definition, Public Interest, Portfolio Effects
Competition Law Commercial and Corporate Merger Control Horizontal Overlap Product Market Definition Public Interest Portfolio Effects

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Parties

Diageo Africa B.V.

Applicant

Newshelf 1167 (Pty) Ltd

Respondent

Procedural Posture

Merger Control / Tribunal Approval of Merger

Legal Issues

  1. 1 Whether the proposed acquisition would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises public interest concerns, including employment effects.
  3. 3 Whether the concerns raised by an anonymous third party regarding food security, pricing, and portfolio effects are merger-specific and substantiated.

Ratio Decidendi

The Tribunal found that the relevant product markets for clear beer and sorghum beer are distinct, with no overlap between the merging parties in these segments. Although both parties manufacture flavoured alcoholic beverages (FABs), the overlap is minimal, with a combined post-merger market share of approximately 19% and an accretion of less than 1%. Competitors such as Distell, SAB, and Halewood International remain active in the market. Concerns raised by an anonymous third party regarding food security, pricing, and portfolio effects were found not to be merger-specific or supported by evidence. The Tribunal was satisfied that the merger would not result in a substantial prevention or...

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed acquisition by Diageo Africa B.V. of Newshelf 1167 (Pty) Ltd is approved without conditions.