Opiconsivia Trading 99 (Pty) Ltd v The Fruitspot Group (55/LM/Jul11) [2012] ZACT 8 (30 January 2012)

Opiconsivia Trading 99 (Pty) Ltd v The Fruitspot Group (55/LM/Jul11) [2012] ZACT 8 (30 January 2012)

The Tribunal found that the merger between Opiconsivia Trading 99 (Pty) Ltd and The Fruitspot Group is unlikely to result in a substantial lessening or prevention of competition at the intermediary level within Gauteng, given the fragmented nature of the market, the presence of numerous competitors, and low barriers to entry for small-scale participants. The Tribunal accepted the Commission's assessment that Fruitspot and Rahme Guys are not close competitors, serving different customer segments. However, the Tribunal identified a risk of input foreclosure for Fruitspot customers outside Gauteng, who are heavily reliant on Fruitspot and have limited alternatives. To address this, the...

Citation
[2012] ZACT 8
Parties
Applicant: Opiconsivia Trading 99 (Pty) Ltd; Respondent: The Fruitspot Group
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
30 January 2012
Case Number
55/LM/Jul11
Procedural Posture
Merger Application / Approval With Conditions
Outcome
Merger approved subject to conditions.
Judges
Norma Manoim, Yasmin Carrim, Andreas Wessels
Legal Topics
Merger Control, Input Foreclosure, Market Definition, Public Interest, Barriers to Entry, Buyer Power
Competition Law Merger Control Input Foreclosure Market Definition Public Interest Barriers to Entry Buyer Power

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Parties

Opiconsivia Trading 99 (Pty) Ltd

Applicant

The Fruitspot Group

Respondent

Procedural Posture

Merger Application / Approval With Conditions

Legal Issues

  1. 1 Whether the proposed merger between Opiconsivia Trading 99 (Pty) Ltd and The Fruitspot Group is likely to substantially lessen or prevent competition in the relevant markets.
  2. 2 Whether the merger raises public interest concerns, including effects on employment, small business, and regional sectors.
  3. 3 Whether the merger creates a risk of input foreclosure for Fruitspot customers outside Gauteng.

Ratio Decidendi

The Tribunal found that the merger between Opiconsivia Trading 99 (Pty) Ltd and The Fruitspot Group is unlikely to result in a substantial lessening or prevention of competition at the intermediary level within Gauteng, given the fragmented nature of the market, the presence of numerous competitors, and low barriers to entry for small-scale participants. The Tribunal accepted the Commission's assessment that Fruitspot and Rahme Guys are not close competitors, serving different customer segments. However, the Tribunal identified a risk of input foreclosure for Fruitspot customers outside Gauteng, who are heavily reliant on Fruitspot and have limited alternatives. To address this, the...

Court Disposition

Merger approved subject to conditions.

Orders

  • The merger between Opiconsivia Trading 99 (Pty) Ltd and The Fruitspot Group is approved, subject to the condition that Massmart must ensure Fruitspot continues to supply fresh produce to its existing customers outside Gauteng for a period of two years on the same basis as pre-merger.
  • The condition is binding on Massmart and is attached as Annexure A to the reasons for decision.