Shoprite Checkers (Pty) Ltd v Trademarks (LM090Oct21) [2022] ZACT 1 (13 January 2022)

Shoprite Checkers (Pty) Ltd v Trademarks (LM090Oct21) [2022] ZACT 1 (13 January 2022)

The Tribunal found that the acquisition of the Trademarks by Shoprite does not result in any significant market share increase or substantial prevention or lessening of competition in the retail grocery market. The Option Agreement for potential future acquisition of the President Outlets must be subject to merger notification and review to ensure compliance with the Competition Act. The Tribunal also required that Shoprite's Expansion Plan for the Trademarks be made a condition of approval to prevent the disappearance of the President brand from the market. No public interest concerns, including employment, arise from the transaction. The merger was approved subject to these conditions.

Citation
[2022] ZACT 1
Parties
Applicant: Shoprite Checkers (Pty) Ltd; Respondent: The Trademarks owned by Mr Basil Synodinos
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
13 January 2022
Case Number
LM090Oct21
Procedural Posture
Merger Review / Conditional Approval
Outcome
Merger conditionally approved subject to notification and expansion plan conditions.
Judges
Enver Daniels, Imraan Valodia, Thando Vilakazi
Legal Topics
Large Merger, Franchise Agreement, Option Agreement, Market Share, Public Interest, Conditional Approval
Competition Law Commercial and Corporate Large Merger Franchise Agreement Option Agreement Market Share Public Interest Conditional Approval

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Parties

Shoprite Checkers (Pty) Ltd

Applicant

The Trademarks owned by Mr Basil Synodinos

Respondent

Procedural Posture

Merger Review / Conditional Approval

Legal Issues

  1. 1 Whether the acquisition of the Trademarks by Shoprite constitutes a merger that may substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the Option Agreement for future acquisition of the President Outlets requires merger notification and review.
  3. 3 Whether the Expansion Plan for the Trademarks should be made a condition of approval to prevent the disappearance of the President brand.

Ratio Decidendi

The Tribunal found that the acquisition of the Trademarks by Shoprite does not result in any significant market share increase or substantial prevention or lessening of competition in the retail grocery market. The Option Agreement for potential future acquisition of the President Outlets must be subject to merger notification and review to ensure compliance with the Competition Act. The Tribunal also required that Shoprite's Expansion Plan for the Trademarks be made a condition of approval to prevent the disappearance of the President brand from the market. No public interest concerns, including employment, arise from the transaction. The merger was approved subject to these conditions.

Court Disposition

Merger conditionally approved subject to notification and expansion plan conditions.

Orders

  • The merger is approved subject to the condition that any future acquisition of the President Outlets by Shoprite Group under the Option Agreement must be notified to the Competition Commission for merger review.
  • Shoprite Group must use its best endeavours to implement the Expansion Plan for the Trademarks, including opening new franchise outlets over the specified period.