Distillers Corporation (SA) Ltd and Hygrace Holdings (Pty) Ltd (29/LM/Mar00) [2000] ZACT 8 (29 March 2000)

Distillers Corporation (SA) Ltd and Hygrace Holdings (Pty) Ltd (29/LM/Mar00) [2000] ZACT 8 (29 March 2000)

The Tribunal found that the joint venture between Distillers Corporation (SA) Ltd and Hygrace Holdings (Pty) Ltd constitutes a merger as defined in section 12(1)(b) of the Competition Act, 1998. The relevant market was identified as the market for natural still wine in South Africa, with the joint venture operating in the high-price segment. The Tribunal considered the significant decrease in the joint market share of the major producers, the deregulation and restructuring of the wine market, the presence of vibrant new entrants, and the existence of countervailing power from large grocery store groups. The Tribunal also noted that vertical integration is regulated by the Liquor Act and...

Citation
[2000] ZACT 8
Parties
Applicant: Distillers Corporation (SA) Ltd; Respondent: Hygrace Holdings (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
29 March 2000
Case Number
29/LM/Mar00
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved without conditions.
Judges
D.H Lewis, N.M. Manoim, S. Zilwa
Legal Topics
Large Merger Review, Market Share Analysis, Vertical Integration, Public Interest, Countervailing Power
Competition Law Commercial and Corporate Large Merger Review Market Share Analysis Vertical Integration Public Interest Countervailing Power

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Parties

Distillers Corporation (SA) Ltd

Applicant

Hygrace Holdings (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Whether the joint venture between Distillers Corporation (SA) Ltd and Hygrace Holdings (Pty) Ltd constitutes a merger under section 12(1)(b) of the Competition Act, 1998.
  2. 2 Whether the merger will substantially prevent or lessen competition in the South African market for natural still wine.
  3. 3 Whether any public interest concerns arise from the merger.

Ratio Decidendi

The Tribunal found that the joint venture between Distillers Corporation (SA) Ltd and Hygrace Holdings (Pty) Ltd constitutes a merger as defined in section 12(1)(b) of the Competition Act, 1998. The relevant market was identified as the market for natural still wine in South Africa, with the joint venture operating in the high-price segment. The Tribunal considered the significant decrease in the joint market share of the major producers, the deregulation and restructuring of the wine market, the presence of vibrant new entrants, and the existence of countervailing power from large grocery store groups. The Tribunal also noted that vertical integration is regulated by the Liquor Act and...

Court Disposition

Merger approved without conditions.

Orders

  • The joint venture between Distillers Corporation (SA) Ltd and Hygrace Holdings (Pty) Ltd is approved without conditions.
  • A Merger Clearance Certificate is issued.