Mr Price Group Ltd v Otto Brothers Distributors (Pty) Ltd (LM180Jan21) [2021] ZACT 19 (17 March 2021)

Mr Price Group Ltd v Otto Brothers Distributors (Pty) Ltd (LM180Jan21) [2021] ZACT 19 (17 March 2021)

The Tribunal found that the proposed merger between Mr Price Group Ltd and Otto Brothers Distributors (Pty) Ltd does not substantially prevent or lessen competition in any relevant market, as the post-merger market shares and accretions are low and the parties will continue to face competition from numerous other retailers. No third parties raised competition concerns. However, public interest concerns were raised by the Minister of Trade, Industry and Competition regarding local procurement and the competitiveness of small businesses and historically disadvantaged persons. The merging parties undertook to maintain or improve Power Fashion's current level of procurement from South African...

Citation
[2021] ZACT 19
Parties
Applicant: Mr Price Group Ltd; Respondent: Otto Brothers Distributors (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
17 March 2021
Case Number
LM180Jan21
Procedural Posture
Merger Approval / Final Determination
Outcome
Merger conditionally approved subject to public interest and procurement conditions.
Judges
E Daniels, AW Wessels, Y Carrim
Legal Topics
Large Merger, Public Interest Conditions, Procurement Commitments, R Ctfl Masterplan, No Retrenchments
Competition Law Large Merger Public Interest Conditions Procurement Commitments R Ctfl Masterplan No Retrenchments

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Parties

Mr Price Group Ltd

Applicant

Otto Brothers Distributors (Pty) Ltd

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed merger between Mr Price Group Ltd and Otto Brothers Distributors (Pty) Ltd would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises public interest concerns under section 12A(3) of the Competition Act, particularly regarding local procurement and participation in the R-CTFL Masterplan Initiative.
  3. 3 Whether the merger would result in any retrenchments or negatively affect small businesses or historically disadvantaged persons.

Ratio Decidendi

The Tribunal found that the proposed merger between Mr Price Group Ltd and Otto Brothers Distributors (Pty) Ltd does not substantially prevent or lessen competition in any relevant market, as the post-merger market shares and accretions are low and the parties will continue to face competition from numerous other retailers. No third parties raised competition concerns. However, public interest concerns were raised by the Minister of Trade, Industry and Competition regarding local procurement and the competitiveness of small businesses and historically disadvantaged persons. The merging parties undertook to maintain or improve Power Fashion's current level of procurement from South African...

Court Disposition

Merger conditionally approved subject to public interest and procurement conditions.

Orders

  • The merger between Mr Price Group Ltd and Otto Brothers Distributors (Pty) Ltd is approved in terms of section 16(2)(b) of the Competition Act, subject to the conditions set out in Annexure A.
  • A Merger Clearance Certificate is to be issued in terms of Competition Tribunal Rule 35(5)(a).