Tiger Brands Limited and Enterprise Foods (Pty) Ltd (12/LM/Mar03) [2003] ZACT 34 (10 June 2003)

Tiger Brands Limited and Enterprise Foods (Pty) Ltd (12/LM/Mar03) [2003] ZACT 34 (10 June 2003)

The Tribunal found that the merger represents Tiger Brands consolidating its existing control over Enterprise Foods, with no product market overlap except for the jointly held subsidiary. The transaction does not alter market structure or increase market share. The Commission's investigation into vertical integration with the Spar Group revealed that Spar retailers are not compelled to buy from Spar distribution centres, Spar is a minor customer, and major retailers possess substantial countervailing power. The Tribunal agreed that the strengthening of the vertical relationship is unlikely to result in customer or competitor foreclosure. Public interest concerns, including employment...

Citation
[2003] ZACT 34
Parties
Applicant: Tiger Brands Limited; Respondent: Enterprise Foods (Pty) Ltd; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
10 June 2003
Case Number
12/LM/Mar03
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger unconditionally approved.
Judges
N Manoim, D Lewis, L Reyburn
Legal Topics
Large Merger Review, Vertical Integration, Market Definition, Public Interest, Employment Effects
Competition Law Commercial and Corporate Large Merger Review Vertical Integration Market Definition Public Interest Employment Effects

Case Brief

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Parties

Tiger Brands Limited

Applicant

Enterprise Foods (Pty) Ltd

Respondent

Competition Commission

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Whether the acquisition of the remaining 50% shareholding in Enterprise Foods by Tiger Brands will substantially lessen competition in any relevant market.
  2. 2 Whether the merger will result in customer or competitor foreclosure due to vertical integration with the Spar Group.
  3. 3 Whether there are any public interest concerns, including employment effects, arising from the merger.

Ratio Decidendi

The Tribunal found that the merger represents Tiger Brands consolidating its existing control over Enterprise Foods, with no product market overlap except for the jointly held subsidiary. The transaction does not alter market structure or increase market share. The Commission's investigation into vertical integration with the Spar Group revealed that Spar retailers are not compelled to buy from Spar distribution centres, Spar is a minor customer, and major retailers possess substantial countervailing power. The Tribunal agreed that the strengthening of the vertical relationship is unlikely to result in customer or competitor foreclosure. Public interest concerns, including employment...

Court Disposition

Merger unconditionally approved.

Orders

  • The merger between Tiger Brands Limited and Enterprise Foods (Pty) Ltd is unconditionally approved.