Main Street 251 (Pty) Ltd v The House of Busby Ltd (16/LM/Feb08) [2008] ZACT 32 (14 May 2008)

Main Street 251 (Pty) Ltd v The House of Busby Ltd (16/LM/Feb08) [2008] ZACT 32 (14 May 2008)

The Tribunal found that the relevant markets are the wholesale and retail markets for handbags and luggage. The merged entity's market share would be 18% at wholesale level, with significant competition from imports and other suppliers. Barriers to entry are low, and the market is fragmented. Concerns about customer foreclosure and vertical relationships were addressed: most stock is sold to other retailers, and exclusive distribution agreements for certain brands are governed by international licences and do not foreclose competition. The Tribunal agreed with the Commission that the transaction would not result in a substantial lessening or prevention of competition. No public interest...

Citation
[2008] ZACT 32
Parties
Applicant: Main Street 251 (Pty) Ltd; Respondent: The House of Busby Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 May 2008
Case Number
16/LM/Feb08
Procedural Posture
Merger Clearance / Reasons for Unconditional Approval of Merger
Outcome
Merger approved unconditionally; no substantial lessening or prevention of competition found.
Judges
D Lewis, N Manoim, Y Carrim
Legal Topics
Merger Clearance, Market Definition, Vertical Relationships, Customer Foreclosure, Public Interest
Competition Law Merger Clearance Market Definition Vertical Relationships Customer Foreclosure Public Interest

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Parties

Main Street 251 (Pty) Ltd

Applicant

The House of Busby Ltd

Respondent

Procedural Posture

Merger Clearance / Reasons for Unconditional Approval of Merger

Legal Issues

  1. 1 Whether the proposed merger between Main Street 251 (Pty) Ltd and The House of Busby Ltd will substantially lessen or prevent competition in the relevant markets.
  2. 2 Whether the transaction raises any public interest concerns.
  3. 3 Whether the merger will result in customer foreclosure or anti-competitive vertical relationships.

Ratio Decidendi

The Tribunal found that the relevant markets are the wholesale and retail markets for handbags and luggage. The merged entity's market share would be 18% at wholesale level, with significant competition from imports and other suppliers. Barriers to entry are low, and the market is fragmented. Concerns about customer foreclosure and vertical relationships were addressed: most stock is sold to other retailers, and exclusive distribution agreements for certain brands are governed by international licences and do not foreclose competition. The Tribunal agreed with the Commission that the transaction would not result in a substantial lessening or prevention of competition. No public interest...

Court Disposition

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

Orders

  • The merger between Main Street 251 (Pty) Ltd and The House of Busby Ltd is approved unconditionally.
  • No conditions are imposed on the approval of the merger.