Pick 'n Pay Retailers (Pty) Ltd and Boxer Holdings (Pty) Ltd (52/LM/Jul02) [2002] ZACT 30 (26 April 2002)

Pick 'n Pay Retailers (Pty) Ltd and Boxer Holdings (Pty) Ltd (52/LM/Jul02) [2002] ZACT 30 (26 April 2002)

The Tribunal found that the relevant market is the retail grocery sector serving LSM 1-5 consumers within local geographic areas. Market shares of the merged entity fluctuate between 13% and 23% in overlapping markets, with only Bizana and Butterworth exceeding the HHI threshold for high concentration. However, the markets are highly price sensitive, and evidence showed that price increases lead to reduced sales, indicating limited market power. The presence of several competitors and differences in market focus between Boxer and Score further mitigate competitive concerns. The Tribunal concluded that the merger would not substantially prevent or lessen competition in any relevant market...

Citation
[2002] ZACT 30
Parties
Applicant: Pick 'n Pay Retailers (Pty) Ltd; Respondent: Boxer Holdings (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
26 April 2002
Case Number
52/LM/Jul02
Procedural Posture
Merger Clearance / Merger Approval
Outcome
Merger approved without conditions.
Judges
D.H. Lewis, N. Manoim, U. Bhoola
Legal Topics
Large Merger, Market Definition, Market Power, Public Interest, Herfindahl Hirschman Index, Retail Grocery Sector
Competition Law Large Merger Market Definition Market Power Public Interest Herfindahl Hirschman Index Retail Grocery Sector

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Parties

Pick 'n Pay Retailers (Pty) Ltd

Applicant

Boxer Holdings (Pty) Ltd

Respondent

Procedural Posture

Merger Clearance / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger between Pick 'n Pay Retailers and Boxer Holdings will substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the transaction raises any adverse public interest concerns.

Ratio Decidendi

The Tribunal found that the relevant market is the retail grocery sector serving LSM 1-5 consumers within local geographic areas. Market shares of the merged entity fluctuate between 13% and 23% in overlapping markets, with only Bizana and Butterworth exceeding the HHI threshold for high concentration. However, the markets are highly price sensitive, and evidence showed that price increases lead to reduced sales, indicating limited market power. The presence of several competitors and differences in market focus between Boxer and Score further mitigate competitive concerns. The Tribunal concluded that the merger would not substantially prevent or lessen competition in any relevant market...

Court Disposition

Merger approved without conditions.

Orders

  • The merger between Pick 'n Pay Retailers (Pty) Ltd and Boxer Holdings (Pty) Ltd is approved.
  • No conditions are imposed on the approval.