Food & Allied Workers Union v Competition Commission and Others (SA) [2001] ZACT 17 (26 April 2001)

Food & Allied Workers Union v Competition Commission and Others (SA) [2001] ZACT 17 (26 April 2001)

The Tribunal found that the relevant market includes frozen potato products, fresh-cut potato products, and table potatoes, based on evidence of substitutability and buyer behaviour in the food services and retail industries. The merged entity's market share, under this broader definition, does not raise substantial competition concerns. The Tribunal also determined that the employment losses directly attributable to the merger are minimal and limited to seven positions, with no causal link established between the merger and retrenchments in McCain's frozen vegetable division. The Tribunal concluded that prohibiting the merger would likely result in greater job losses due to potential...

Citation
[2001] ZACT 17
Parties
Applicant: Food and Allied Workers Union; Respondent: Competition Commission; Respondent: McCain Foods (SA) (Pty) Ltd; Respondent: Heinz Frozen Foods (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
26 April 2001
Case Number
17/AM/Mar01
Procedural Posture
Review Application / Tribunal Review of Commission Merger Approval
Outcome
Merger approved subject to conditions.
Judges
D.H. Lewis, P. Maponya, C. Qunta
Legal Topics
Merger Control, Public Interest, Market Definition, Employment Impact, Relevant Market, Retention of Employment
Competition Law Merger Control Public Interest Market Definition Employment Impact Relevant Market Retention of Employment

Case Brief

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Parties

Food and Allied Workers Union

Applicant

Competition Commission

Respondent

McCain Foods (SA) (Pty) Ltd

Respondent

Heinz Frozen Foods (Pty) Ltd

Respondent

Procedural Posture

Review Application / Tribunal Review of Commission Merger Approval

Legal Issues

  1. 1 Whether the merger between McCain Foods (SA) (Pty) Ltd and Heinz Frozen Foods (Pty) Ltd will substantially lessen competition in the relevant market.
  2. 2 Whether the merger will have a detrimental effect on public interest, specifically employment.
  3. 3 Whether the Competition Commission correctly defined the relevant market for purposes of merger analysis.

Ratio Decidendi

The Tribunal found that the relevant market includes frozen potato products, fresh-cut potato products, and table potatoes, based on evidence of substitutability and buyer behaviour in the food services and retail industries. The merged entity's market share, under this broader definition, does not raise substantial competition concerns. The Tribunal also determined that the employment losses directly attributable to the merger are minimal and limited to seven positions, with no causal link established between the merger and retrenchments in McCain's frozen vegetable division. The Tribunal concluded that prohibiting the merger would likely result in greater job losses due to potential...

Court Disposition

Merger approved subject to conditions.

Orders

  • The merger between McCain Foods (SA) (Pty) Ltd and Heinz Frozen Foods (Pty) Ltd is approved subject to the condition that the number of employees retrenched as a result of this merger shall not exceed seven.
  • McCain Foods (SA) (Pty) Ltd and Heinz Frozen Foods (Pty) Ltd shall, on a monthly basis, supply the Competition Commission with their post-merger employment statistics for a period of eighteen months from the date of this order.