Edgars Consolidated Stores (Pty) Ltd and Rapid Dawn 123 (Pty) Ltd (21/LM/Mar05) [2005] ZACT 45; [2005] 2 CPLR 457 (CT) (4 July 2005)

Edgars Consolidated Stores (Pty) Ltd and Rapid Dawn 123 (Pty) Ltd (21/LM/Mar05) [2005] ZACT 45; [2005] 2 CPLR 457 (CT) (4 July 2005)

The Tribunal found that the merger would not substantially prevent or lessen competition in the relevant retail markets. The combined post-merger market shares in ladieswear, ladies footwear, and cellular products were not high enough to raise competition concerns, and several large competitors would remain in the market. The Tribunal noted that market share data was incomplete but concluded that Topics is a small competitor and Edcon's increase in market share is marginal. Vertical integration issues were dismissed as there are many alternative suppliers and imports compete effectively with local manufacturers. Public interest concerns raised by SACTWU, particularly regarding employment...

Citation
[2005] ZACT 45
Parties
Applicant: Edgars Consolidated Stores (Pty) Ltd; Respondent: Rapid Dawn 123 (Pty) Ltd; Respondent: South African Clothing and Textile Workers Union (SACTWU)
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
4 July 2005
Case Number
21/LM/Mar05
Procedural Posture
Large Merger Review / Merger Approval Hearing
Outcome
Merger approved without conditions.
Judges
D Lewis, N Manoim, Y Carrim
Legal Topics
Merger Control, Public Interest, Market Concentration, Vertical Integration, Retail Sector, Employment Effects
Competition Law Merger Control Public Interest Market Concentration Vertical Integration Retail Sector Employment Effects

Case Brief

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Parties

Edgars Consolidated Stores (Pty) Ltd

Applicant

Rapid Dawn 123 (Pty) Ltd

Respondent

South African Clothing and Textile Workers Union (SACTWU)

Respondent

Procedural Posture

Large Merger Review / Merger Approval Hearing

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in the relevant retail markets.
  2. 2 Whether the merger raises public interest concerns under section 12A(3) of the Competition Act, including employment and impact on local suppliers.
  3. 3 Whether vertical integration issues arise from Edcon's control of upstream manufacturers.

Ratio Decidendi

The Tribunal found that the merger would not substantially prevent or lessen competition in the relevant retail markets. The combined post-merger market shares in ladieswear, ladies footwear, and cellular products were not high enough to raise competition concerns, and several large competitors would remain in the market. The Tribunal noted that market share data was incomplete but concluded that Topics is a small competitor and Edcon's increase in market share is marginal. Vertical integration issues were dismissed as there are many alternative suppliers and imports compete effectively with local manufacturers. Public interest concerns raised by SACTWU, particularly regarding employment...

Court Disposition

Merger approved without conditions.

Orders

  • The merger between Edgars Consolidated Stores (Pty) Ltd and Rapid Dawn 123 (Pty) Ltd is approved without conditions.