Lithotech Holdings Ltd and Rotolabel (Transvaal) (Pty) Ltd (132/LM/Dec07) [2008] ZACT 16 (20 February 2008)

Lithotech Holdings Ltd and Rotolabel (Transvaal) (Pty) Ltd (132/LM/Dec07) [2008] ZACT 16 (20 February 2008)

The Tribunal found that the processes for manufacturing decorative self-adhesive labels, while requiring more colours and varnishes, are not significantly different from those for blank self-adhesive labels. Therefore, the relevant market is defined as the manufacture and supply of self-adhesive labels. The combined post-merger market share of 9% is not substantial, and the accretion of 5% does not raise competition concerns. No public interest issues were identified. Consequently, the merger does not result in a substantial lessening or prevention of competition and is approved unconditionally.

Citation
[2008] ZACT 16
Parties
Applicant: Lithotech Holdings Ltd; Respondent: Rotolabel (Transvaal) (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
20 February 2008
Case Number
132/LM/Dec07
Procedural Posture
Merger Clearance / Reasons for Decision
Outcome
Merger approved unconditionally; no substantial lessening or prevention of competition found.
Judges
Y Carrim, N Manoim, U Bhoola
Legal Topics
Merger Clearance, Market Definition, Market Share Analysis, Public Interest, Substantial Lessening of Competition
Competition Law Commercial and Corporate Merger Clearance Market Definition Market Share Analysis Public Interest Substantial Lessening of Competition

Case Brief

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Parties

Lithotech Holdings Ltd

Applicant

Rotolabel (Transvaal) (Pty) Ltd

Respondent

Procedural Posture

Merger Clearance / Reasons for Decision

Legal Issues

  1. 1 Does the proposed merger between Lithotech Holdings Ltd and Rotolabel (Transvaal) (Pty) Ltd substantially lessen or prevent competition in the relevant market?
  2. 2 Is the relevant market correctly defined for the purposes of competition analysis?
  3. 3 Does the transaction raise any public interest concerns?

Ratio Decidendi

The Tribunal found that the processes for manufacturing decorative self-adhesive labels, while requiring more colours and varnishes, are not significantly different from those for blank self-adhesive labels. Therefore, the relevant market is defined as the manufacture and supply of self-adhesive labels. The combined post-merger market share of 9% is not substantial, and the accretion of 5% does not raise competition concerns. No public interest issues were identified. Consequently, the merger does not result in a substantial lessening or prevention of competition and is approved unconditionally.

Court Disposition

Merger approved unconditionally; no substantial lessening or prevention of competition found.

Orders

  • The merger between Lithotech Holdings Ltd and Rotolabel (Transvaal) (Pty) Ltd is approved unconditionally.
  • No conditions are imposed on the approval of the merger.