TIGER FOOD BRANDS LTD and BROMOR FOODS (PTY) LTD (33/LM/Apr06) [2006] ZACT 64 (17 July 2006)

TIGER FOOD BRANDS LTD and BROMOR FOODS (PTY) LTD (33/LM/Apr06) [2006] ZACT 64 (17 July 2006)

The Tribunal found that the combined post-merger market shares of Tiger Food Brands Ltd and Bromor Foods (Pty) Ltd in the relevant markets—non-alcoholic beverages and jams/piefills—were low and did not raise competition concerns. In the broad non-alcoholic beverages market, the merged entity would hold approximately 3.81%, far below the leading competitor. In the jams and piefills market, the increment was minor, increasing Tiger's share from 58% to 60%, which was not considered likely to substantially lessen competition, especially given the presence of alternative suppliers and strong countervailing power among customers. The Tribunal also considered public interest factors, noting...

Citation
[2006] ZACT 64
Parties
Applicant: Tiger Food Brands Ltd; Respondent: Bromor Foods (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
17 July 2006
Case Number
33/LM/Apr06
Procedural Posture
Merger Application / Merger Clearance Decision
Outcome
Merger approved unconditionally.
Judges
D Lewis, N Manoim, U Bhoola
Legal Topics
Merger Clearance, Market Definition, Substantial Lessening of Competition, Public Interest, Market Share Analysis
Competition Law Commercial and Corporate Merger Clearance Market Definition Substantial Lessening of Competition Public Interest Market Share Analysis

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Parties

Tiger Food Brands Ltd

Applicant

Bromor Foods (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Merger Clearance Decision

Legal Issues

  1. 1 Whether the proposed merger between Tiger Food Brands Ltd and Bromor Foods (Pty) Ltd is likely to result in a substantial lessening or prevention of competition in the relevant markets.
  2. 2 Whether public interest considerations justify the imposition of conditions on the merger.

Ratio Decidendi

The Tribunal found that the combined post-merger market shares of Tiger Food Brands Ltd and Bromor Foods (Pty) Ltd in the relevant markets—non-alcoholic beverages and jams/piefills—were low and did not raise competition concerns. In the broad non-alcoholic beverages market, the merged entity would hold approximately 3.81%, far below the leading competitor. In the jams and piefills market, the increment was minor, increasing Tiger's share from 58% to 60%, which was not considered likely to substantially lessen competition, especially given the presence of alternative suppliers and strong countervailing power among customers. The Tribunal also considered public interest factors, noting...

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed merger between Tiger Food Brands Ltd and Bromor Foods (Pty) Ltd is approved without conditions.
  • No retrenchments may occur for a period of at least nine months, and no preparatory steps for retrenchment may be taken for at least six months from implementation of the merger.