Shoprite Checkers (Pty) Ltd v Transfarm (Pty) Ltd and Others (68/LM/Oct09) [2010] ZACT 8; [2009] 2 CPLR 483 (CT) (2 February 2010)

Shoprite Checkers (Pty) Ltd v Transfarm (Pty) Ltd and Others (68/LM/Oct09) [2010] ZACT 8; [2009] 2 CPLR 483 (CT) (2 February 2010)

The Tribunal found that the proposed merger would not result in a substantial prevention or lessening of competition in any relevant market. Transfarm's market share in the wholesale distribution of pharmaceuticals is below 10%, and the retail market is highly competitive with several national players. The vertical integration resulting from the merger does not create significant foreclosure risks, as both upstream and downstream markets remain competitive. No public interest concerns were identified. Accordingly, the merger was approved unconditionally.

Citation
[2010] ZACT 8
Parties
Applicant: Shoprite Checkers (Pty) Ltd; Respondent: Transfarm (Pty) Ltd and 6 Others; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
2 February 2010
Case Number
68/LM/Oct09
Procedural Posture
Merger Application / Approval and Reasons
Outcome
Merger approved unconditionally.
Judges
N Manoim, Y Carrim, A Wessels
Legal Topics
Merger Control, Vertical Integration, Market Definition, Foreclosure Effects
Competition Law Commercial and Corporate Merger Control Vertical Integration Market Definition Foreclosure Effects

Case Brief

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Parties

Shoprite Checkers (Pty) Ltd

Applicant

Transfarm (Pty) Ltd and 6 Others

Respondent

Competition Commission

Respondent

Procedural Posture

Merger Application / Approval and Reasons

Legal Issues

  1. 1 Does the proposed merger result in a substantial prevention or lessening of competition in any relevant market?
  2. 2 Are there any public interest concerns arising from the transaction?
  3. 3 Is there a likelihood of customer or input foreclosure due to the vertical integration?

Ratio Decidendi

The Tribunal found that the proposed merger would not result in a substantial prevention or lessening of competition in any relevant market. Transfarm's market share in the wholesale distribution of pharmaceuticals is below 10%, and the retail market is highly competitive with several national players. The vertical integration resulting from the merger does not create significant foreclosure risks, as both upstream and downstream markets remain competitive. No public interest concerns were identified. Accordingly, the merger was approved unconditionally.

Court Disposition

Merger approved unconditionally.

Orders

  • The acquisition by Shoprite Checkers (Pty) Ltd of Transfarm (Pty) Ltd and 6 Others is approved without conditions.