Dis-Chem Pharmarcies Ltd v Quenets Pharmaceutical Wholesalers (Pty) Ltd, Brandwacht Marketing (Pty) Ltd (LM115Jul18) [2018] ZACT 51 (15 November 2018)

Dis-Chem Pharmarcies Ltd v Quenets Pharmaceutical Wholesalers (Pty) Ltd, Brandwacht Marketing (Pty) Ltd (LM115Jul18) [2018] ZACT 51 (15 November 2018)

The Tribunal found that the proposed merger would not result in a substantial prevention or lessening of competition in either the national or Western Cape markets for the wholesale distribution of pharmaceutical products. The combined post-merger market shares were below thresholds that would raise competition concerns, and the merged entity would continue to face competition from other market participants. The vertical relationship between the parties was limited and did not alter the structure of the downstream retail market. Public interest concerns raised by a competitor were investigated and found to be unsubstantiated, with no evidence of job losses or market foreclosure....

Citation
[2018] ZACT 51
Parties
Applicant: Dis-Chem Pharmacies Ltd; Respondent: Quenets Pharmaceutical Wholesalers (Pty) Ltd; Respondent: Brandwacht Marketing (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
15 November 2018
Case Number
LM115Jul18
Procedural Posture
Merger Approval / Final Determination
Outcome
The proposed merger is approved unconditionally.
Judges
Enver Daniels, lmraan Valodia
Legal Topics
Merger Control, Horizontal Overlap, Vertical Relationship, Public Interest, Market Share Analysis
Competition Law Merger Control Horizontal Overlap Vertical Relationship Public Interest Market Share Analysis

Case Brief

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Parties

Dis-Chem Pharmacies Ltd

Applicant

Quenets Pharmaceutical Wholesalers (Pty) Ltd

Respondent

Brandwacht Marketing (Pty) Ltd

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed merger between Dis-Chem and Quenets/Brandwacht is likely to substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the transaction raises any public interest concerns, including potential job losses or market foreclosure.

Ratio Decidendi

The Tribunal found that the proposed merger would not result in a substantial prevention or lessening of competition in either the national or Western Cape markets for the wholesale distribution of pharmaceutical products. The combined post-merger market shares were below thresholds that would raise competition concerns, and the merged entity would continue to face competition from other market participants. The vertical relationship between the parties was limited and did not alter the structure of the downstream retail market. Public interest concerns raised by a competitor were investigated and found to be unsubstantiated, with no evidence of job losses or market foreclosure....

Court Disposition

The proposed merger is approved unconditionally.

Orders

  • The proposed transaction between Dis-Chem Pharmacies Ltd and Quenets Pharmaceutical Wholesalers (Pty) Ltd, Brandwacht Marketing (Pty) Ltd is approved without conditions.