competitiontri bu nal
SOUTH AFR ICA
COMPETITION TRIBUNAL REPUBLIC OF SOUTH AFRICA
In the matter between:
The Competition Commission
And
RAPS Stores (Pty) Ltd;
K2016335487 (SA) Pty Ltd;
De Hallen Liquor (Pty) Ltd
Pane l:
Heard on:
Dec ided on:
C ase No: CO004Apr25
Applicant
First Re spondent
Second Re spondent
Third Re spondent
T Vilakazi (Presiding Member)
A Ndo ni (Tribunal Member)
G Budlender (Tribunal Member)
12 May 2025
13 May 2025
CONSENT AGREEMENT
The Tribunal hereby confirms the consent agreement concluded between the
Compet ition Commiss ion and RAPS Stores (Pty) Ltd; K2016335487 (SA) Pty
Ltd; De H allen Liquor (Pty) Ltd, annexed hereto.
Signed by:Thando Vilakazi
Signed at:2025-05-13 12:06:28 +02:00
Reason :\Mtnessing Thando V ilakazi
Presiding Member
Prof. Thando Vilakazi
13 May 2025
Date
Concurring: M s Andiswa Ndoni and Adv. Geoff Budlender SC
IN THE C OMPETITION TRIBUNAL OF SOUTH AFRICA
CC Case No: 2024NOV0073
CT Case No:
In the matter between:
THE COMPETITION COMMISSION
And
RAPS STORES PROPRIETARY LIMITED
K2016335487 (SOUTH AFRICA) PROPRIETARY
LIMITED
DE HALLEN LIQUOR PROPRIETARY LIMITED
Applicant
First Respondent
Second Respondent
Third Respondent
CONSENT AGREEMENT IN TERMS OF SECTION 49D , READ WITH SECTION
58(1)(b) OF THE COMPETITION ACT , NO. 89 OF 1998 AS AMENDED , RELATING
TO ALLEGED CONTRAVENTIONS OF SECTION 4(1)(b), SECTION 13A(1) AND
SECTION 13A(3) OF THE COMPETITION ACT
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1. PREAMBLE
1.1 The Cornpctition Commission ("Commission") and Raps Sto,cs Proprietary
Limited and K2016335487 (South Africa) Proprietary Limited and De Hallen
Liquor Proprietary Limited hereby agree that an application be made to the
Competition Tribunal ("Tribunal") for the confirmation of this settlement
agreement as a consent order of the Tribunal in terms of section 49D read with
section 58(1)(b) of the Competition Act, on the terms set out below.
2. DEFINITIONS AND INTERPRETATION
2.1 In this document the following expressions bear the meanings assigned to them
below and related expressions bear corresponding meanings -
2.1.1 "Agreement" means this agreement duly signed and concluded
between the Commission and Raps Stores Proprietary Limited and
K2016335487 (South Africa) Proprietary Limited and De Hallen Liquor
Proprietary Limited, that will be referred to the Tribunal for confirmation
as a consent order;
2.1.2 "Comm ission·· means the Competition Comm ission of Souttl Africa, a
statutory body established in terms of section 19 of the Cornpetition Act,
w ith its principal place of business at 1st Floor, Mulayo Building (Block
C ), the DTI campus, 77 Meintjies Street. Sunnyside, Pretoria, Gauteng:
2.1.3 "Competition Act" means tne Competition Act 89 of 1998, as amended:
2.1.4 "Commissioner" means the Competition Commissioner of South Africa,
appointed in terms of section 22 of the Competition Act;
2.1.5 "Confirmation Date'' means the date upon which the Tribunal confirms
this Agreement as a consent order in terms of section 490, read with
section 58(1)(b) of the Competition Act;
2.1.6 "Days" means any business day being a day which is not a Saturday
Sunday or an official holiday in South Africa;
2.1.7 "Parties" means the Commiss ion and the Respondents collectively;
2.1.8 "Respondents" rTieans the first and second Respondents being Raps
Stores Proprietary Limited ("Raps"), and K2016335487 (South Africa)
Proprietary Limited and De Hallen liquor Proprietary Limited.
2.1.9 "Tribunal" means the Competition Tribunal of South Africa, a statutory
body established in terms of section 26 of the Competition Act;
3. RECORDAL
3.1 T1is consent agreement relates to the transaction discussed below namely
management agreement (Management Agreement) entered into between Raps
Stores Proprietary Limited ("Raps'') and the SPAR Steiltes, De Hallen
KWIKSPAR and De Hallen TOPS retail stores (the "Target Businesses"). The
agreement was implemented, without the required regulatory approval on
1 November 2024.
4. BACKGROUND
4.1 In 2021 and 2022, K2016335487 (South Africa} Proprietary Limited and De
Hallen Liquor Proprietary Limited ("the Sellers") purchased the SPAR Steilte~.
De Hallen KWIKSPAR and De Hallen TOPS retail stores (the "Target
Businesses").
4.2 The Sellers had been struggling to operate the Target Businesses at suitable
levels of profitability and decided to sell the Target Businesses. Raps was
identified as a preferred purchaser of the Target Businesses and the acquisition
process commenced.
4.3 The Sellers, conscious of the poor financial performance. of the Target
8Jsmesses w1ich would result in liquidation and retrenctrn1ent of all of its
em ployees, outsourced the management of the Target Businesses to Raps
through a management agreement ("Management Agreement") while the
Se llers and Raps (collectively referred to c1s the "Respondents") finalised the
implementation of the sale agreement and met all the suspensive conditions
("Sale Agreement").
4.4 The purpose of the Management Agreement was to assist the Target
Businesses with reducing the decline in their performance, so as to safeguard
the value of the Target Businesses, until such time as the merge r was approved
by the Commissio n.
4.5 In terms of the Management Agreement, all management services rendered by
Raps shall be in the sole and absolute discretion of Raps and shall include, but
not be limited to:
4.5.1 order and receiving of stock;
4.5.2. merchandising,
4.5.3. staff and finances;
4.5.4. selling and collecting of payment at the tills;
4.5.5. daily banking; and
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all and any other services which, in the opinion of Raps, may be reasonably
required by Raps to manage the businesses of the Sellers.
4.6 The Respondents instructed an attorney to draw up the Management
Agreement but were not advised that the Management Agreement could give
rise to a potential b·reach of the Competition Act. This is evidenced by the
following statements in the Management Agreement:
4.6.1. In the introductory paragraphs, specifically clause 1.2 and 1.3, where it
is stated that "The envisaged Sale Agreement is subject to statutory and
regulatory requirements" and "The patties have agreed that pending the
compliance with the regulatory and statutory requirements to give effect
to the sale agreement, that RAPS STORES will manage, on behalf of the
KENNET GROUP, the businesses of the KENNET GROUP which forms
part of the subject of the sale agreement"; and
4.6.2. In sub-clause 8.1.3. "where it is stated that "the execution of this
{Management] Agreement and the performance of its obligations
hereunder does not and shall not:
8. 1. 3. 1 contravene any Jaw or regulation to which that Party is subject;"
4.7 The Management Agreement became effective on 1 November 2024.
4.8 It was only when the Respondents commenced the preparation of the merger
notification as contemplated in the Sale Agreement and briefed specialist
competition lawyers that they were advised the implementation of the
Management Agreement could have breached the Competition Act. As soon as
they were so advised, the Respondents voluntarily approached the Commission
to bring the Management Agreement to the Commission's attention.
5. THE COMMISSION'S FINDING
5.1 The transaction was filed with the Commission, post implementation, on 28
January 2025. The duration of the contravention is therefore a period of 3
months, (from 1 November 2024 to 30 January 2025, when the prior
implementation was reported to the Commission}, which period does not exceed
two years.
5.2 The Commission has perused the Management Agreement and agrees with the
Respondents that there was indeed an implementation of a merger prior to
notification. This is borne by the fact that the Management Agreement gives
RAPS Stores effective control over the entire operations of the Target
Businesses from purchasing to selling of merchandise. Furthermore, this control
appears to be unfettered in any material manner by the presence of the Sellers
as owners of Target Businesses.
5.3 The Respondents have demonstrated willingness to expeditiously conclude a
settlement witt, the Commission. Further, the Respondents in their interaction
with the Commiss ion have exhibited transparency and have provided all the
agreements entered into including giving full historical background leading up to
the transaction.
5.4 The Respondents have not previously been found to have contravened the
Competition Act.
6. ADMISSION
The Respondents admit that they entered into a merger transaction without
notify;ng the Commission and implemented the merger without the approval of
the Commission in terms of section 14(1)(b), or the Tribunal in terms of section
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16(2) or tt,e Competition Appeal Court in terms of section 17. as required by
section 13 A of the Competition Act, and as such are in contravention of the
Competition Act.
7 AGREEMENT REGARDING FUTURE CONDUCT
7 .1 The Respondents agree to;
7.1.1 Not to undertake in any contravention of the Competition Act;
7 .1. 2 Develop, implement and monitor a competition law compliance
programme incorporating corporate governance designed to ensure that
its employees, management , directors and agents do not engage in
future contraventions of the Competition Act;
7 1.3 To submit a copy of such compliance programme to the Comm ission
w ithin 60 days of the date of confirmation of the Settlement Agreement
as an order by the Tribunal.
7 .2 Notification ,s to be provided to the Commiss ion per email at
m ergerconditions@ com pcom .co.za.
8. ADMINISTRATIVE PENALTY
8.1 In terms of section 58(1)(a)(iii) of the Competition Act read with sections
59(1)(a), 59(2) and (3) of the Competition Act, Respondents agree to pay an
administrative penalty in the amount of R350 ,625.00 (Three Hundred and Fifty
Thousand Six Hundred and Twenty Five Rand).
8.2 The above amount does not exceed 10% of the respondents' respective annual
turnover for the 2024 financial year.
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•
8.3 The administrative penalty shall be paid within 30 Days from the date of
confirmation of this Agreement by the Tribunal.
8.4 Tt1e administrative penalty will be pad into the Commission's bank account.
8.5 The Commission's banking details are as follows:
Bank: ABSA Bank
Name of Account: The Compet ition Commission Fees Account
Branch Name: Pretoria
Branch Code: 323345
AccountNumbe~ 4050778576
8.6 The Co m mission w ill pay the administrative penalty amount into the National
Revenue Fund in compliance with section 59(4) of the Competition Act.
9. FULL ANO FINAL SETTLEMENT
This Consent Agreement, upon confirmation as an order by the Tribunal, is entered
into in fu[I and final settlement and concludes all proceedings between the
Commission and the Respondents relating to the failure to notify the transaction in
terms of which Raps and K2016335487 (South Africa) Proprietary Limited and De
Hallen Liquor Proprietary Lim ted entered into the Management Agreement and
implemented the ag0eement without receiving the prior approval of the Competition
Authorities.
~ '
on the Ji: day of ~a_ r-0~ 2025.
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For the Respondents :
Signature: ~
D8ted and si9nec at _ __.,P..,,r .... etl:>Oo"-'ri,....a ___ on the28thday of_.JaM .... a..._r...,ch1..1...-___ 2025.
For the Commiss ion:
Name: Doris Tshepe
Capacity: Commissioner
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