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Competition Commission and Another v South African Breweries and Others (134/CR/DEC07) [2010] ZACT 45 (9 July 2010)

78 Reportability
Competition Law
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Brief Summary

Competition Law — Separation of issues — Application for separation by South African Breweries Limited and its distributors — Tribunal granted separation based on convenience and to prevent prejudice to respondents — Commission opposed the application — Key considerations included the lengthy delays in proceedings and the need for expeditious resolution of litigation — Tribunal held that separation was appropriate to facilitate the efficient disposal of the case.

Comprehensive Summary

Summary of Judgment


1. Introduction


The proceedings concerned an interlocutory application for separation of issues in pending complaint referral proceedings before the Competition Tribunal of South Africa. The application was brought by South African Breweries Limited (SAB) and its appointed distributors (the second to fourteenth respondents in the main referral) against the Competition Commission.


The matter arose from the Commission’s referral to the Tribunal of a complaint alleging various contraventions of the Competition Act 89 of 1998, including complaints relating to SAB’s distribution arrangements and related trading practices, as well as an alleged abuse of dominance. The litigation had been marked by protracted procedural disputes and delays, including discovery disputes, applications concerning the scope and admissibility of evidence, and the Commission’s failure to comply timeously with agreed pre-hearing timetables.


The general subject-matter of the dispute was not the merits of the competition allegations themselves, but whether it was procedurally convenient and fair to separate and hear first the complaints concerning SAB’s wholesale distribution model and related conduct (involving SAB and the distributors), and to stay the hearing of the abuse of dominance complaint directed at SAB.


2. Material Facts


The Tribunal relied on a set of largely undisputed procedural facts demonstrating that the matter had experienced significant delay and that the case, as referred, comprised multiple complaints implicating different parties and different commercial relationships.


On 21 December 2007, the Commission referred a complaint to the Tribunal against SAB and its appointed distributors. The referral alleged that SAB’s distribution agreements with appointed distributors amounted to a prohibited concerted practice under section 4(1)(b)(ii), alternatively that SAB’s wholesaler and franchise agreements were prohibited vertical agreements under section 5(1). The referral also alleged minimum resale price maintenance under section 5(2), price discrimination under section 9, and an abuse of dominance under section 8(d)(i) and/or section 8(c) relating to inducements or requirements that retail outlets not deal with competitors.


The Tribunal accepted that the proceedings had progressed slowly, including because of interlocutory disputes. A pre-hearing conference was held on 8 September 2009, at which a timetable was agreed for discovery, factual witness statements, expert reports, and hearing dates extending into May 2010 (and, if necessary, August 2010). Separation had been canvassed at that stage, but SAB and the Commission were then opposed.


The Commission brought a timeous application for further and better discovery, but the discovery process became contentious. The Commission sought to compel SAB to produce documents; SAB opposed parts of the request, including on the basis that certain documents related to periods after December 2007 and were therefore irrelevant to the referred complaint period. The application to compel was postponed more than once and was later modified in light of the separation order.


A material trigger for the separation application was that the Commission failed to file factual witness statements by the agreed dates. Instead, it served subpoenas on various witnesses to testify at the hearing, including individuals associated with certain respondents and representatives of Brandhouse Beverages, a competitor of SAB. SAB disputed the Commission’s explanation for non-compliance (which was linked to alleged inadequate discovery) and brought an application to dismiss the complaint on 23 March 2010, which the Tribunal dismissed while issuing directives for the filing of witness statements and/or transcripts/summaries.


Further interlocutory dispute arose concerning the Brandhouse evidence, which SAB contended went beyond the pleaded case and referred to events after the relevant period. The Tribunal recorded that this issue was ultimately resolved by the Commission’s decision to initiate a second section 8 complaint against SAB based on that evidence, which created uncertainty regarding the trajectory of the existing section 8 referral.


When expert reports were due on 1 April 2010, the Commission was not able to comply and sought a directive regarding the impact on further proceedings. The May 2010 hearing dates were postponed, leaving August 2010 as the next available hearing period and contributing to the Tribunal’s concern that an extended period had elapsed since the original complaint had been lodged with the Commission in 2004.


In evaluating evidentiary overlap and convenience, the Tribunal treated as material that for purposes of the section 9 complaint SAB had conceded dominance, which reduced (for that separated dispute) the need for extensive evidence on market definition and market power, even though SAB’s concession was on a market definition different from that alleged by the Commission.


3. Legal Issues


The central legal question was whether the Tribunal should grant an order separating issues so that certain complaints would be heard and determined separately from the section 8 abuse of dominance complaint, and whether the section 8 complaint should be stayed pending further directions.


This was not a determination of the merits of the competition law allegations. It was primarily a matter of procedural discretion involving the application of a legal standard (“convenience” and associated considerations of fairness and expedition) to the procedural history and structure of the pleadings. The dispute therefore concerned a value judgment and case-management discretion, informed by legal principle and an assessment of the practical impact of overlap, delay, and prejudice.


A further question was what constituted a sensible demarcation between the complaints, given the Commission’s contention that the alleged contraventions formed an integrated strategy and that issues such as dominance and market definition overlapped across complaints.


4. Court’s Reasoning


The Tribunal began by identifying the applicable procedural framework. The Tribunal’s rules did not expressly provide for separation applications, but Tribunal Rule 55(1)(b) permitted reference to the Uniform Rules of Court where the Tribunal’s rules were silent. The Tribunal accordingly applied Uniform Rule 33(4), which permits a court to order the separate disposal of any question of law or fact if it may be conveniently decided separately, and requires such an order on application unless separate determination would not be convenient.


Relying on King v King 1971 (2) SA 630 (O), the Tribunal understood Rule 33(4) to be directed at the convenient and expeditious disposal of litigation, including the shortening of proceedings or facilitating final determination. It emphasised that convenience and fairness are the principal guiding factors, and that a separation decision requires weighing advantages and disadvantages in the circumstances of each case. The Tribunal added that its own procedural mandate to conduct matters expeditiously (with reference to the Competition Act) formed part of the balancing exercise, and that the Tribunal enjoys a relatively greater procedural discretion.


On the question of overlap, the Tribunal accepted that overlap of evidence is relevant and that overlap may count against separation. However, it did not treat overlap as determinative; it framed the inquiry more broadly, including the extent of factual and legal overlap and whether practical measures could reduce duplication (including, as proposed by the distributors, treating evidence in the first separated hearing as evidence available for later determination).


The Tribunal addressed and rejected the Commission’s reliance on the Tribunal’s decision in Loungefoam (Pty) Ltd and Vitafoam (Pty) Ltd v The Competition Commission (Case No: 103/CR/Sep8, 4 December 2009) as a close analogue. It distinguished that matter on the basis that the separation there had initially been agreed, but later withdrawn when demarcation proved more complex. In the present matter, uncertainty was increased by the Commission’s initiation of a further complaint based on Brandhouse evidence, and there was no equivalent completeness of a consolidated factual case that would make near-term consolidation probable.


Turning to the structure of the referred complaints, the Tribunal characterised the referral as involving discrete complaints. It drew a “clear fissure” between, on the one hand, complaints concerning SAB’s relationship with its appointed distributors at wholesale level (the section 4/5 distribution complaints, the section 5(2) resale price maintenance complaint, and the section 9 price discrimination complaint) and, on the other hand, the section 8 abuse of dominance complaint focused on SAB’s alleged conduct affecting retail outlets.


Although the Tribunal accepted that there could be some overlap between the section 8 case and the section 9 claim because both might implicate dominance, it held that this overlap should not be overstated. It placed weight on the fact that SAB’s concession of dominance for purposes of section 9 would obviate the need for extensive evidence on market definition and market power in the first separated hearing.


The Tribunal’s fairness assessment focused particularly on the position of the appointed distributors. It accepted that their businesses had been subject to prolonged regulatory uncertainty and that they had a direct interest in the distribution-related complaints but no legal interest in the section 8 abuse case directed solely at SAB. It considered it unfair to require relatively smaller distributor businesses to participate, at their own cost, in protracted litigation on a section 8 case that the Commission itself was not ready to proceed with.


The Tribunal also rejected the Commission’s proposed separation (limited to section 4(1)(b) and part of section 5(2)) because it would not achieve the principal purpose of separation in this matter. On the Tribunal’s reasoning, the Commission’s approach would still require the distributors to be drawn into section 8 litigation, undermining the convenience and fairness rationale advanced for separation.


On balance, the Tribunal concluded that a coherent hearing could proceed in August on the sections 4, 5, and 9 complaints, and that the Commission could proceed with the section 8 complaint when ready, with the possibility (but not certainty) of future consolidation depending on developments.


5. Outcome and Relief


The Tribunal granted the separation application and ordered that the complaints under sections 4(1)(b)(ii), 5(1), 5(2), and 9(1) (as pleaded in the founding affidavit in the complaint referral) would be heard and determined separately from the section 8 complaint.


The Tribunal ordered that the hearing of the section 8 complaint would be stayed pending further directions. It limited the pending discovery application to discovery required for the first separated complaint and postponed it sine die insofar as it related to the stayed section 8 complaint. The Tribunal set the hearing of the first separated complaint down for 2 to 27 August 2010.


No order as to costs was made.


Cases Cited


King v King 1971 (2) SA 630 (O).


Loungefoam (Pty) Ltd and Vitafoam (Pty) Ltd v The Competition Commission Case No: 103/CR/Sep8 (Competition Tribunal of South Africa, decision dated 4 December 2009).


Legislation Cited


Competition Act 89 of 1998 (as amended), including sections 4(1)(b)(ii), 5(1), 5(2), 8(c), 8(d)(i), 9, 52(2), 52(2A), and 55.


Rules of Court Cited


Competition Tribunal Rule 55(1)(b).


Uniform Rules of Court, Rule 33(4).


Held


The Tribunal held that, applying the convenience and fairness standard underlying Uniform Rule 33(4) (read through Tribunal Rule 55(1)(b)), the complaints relating to SAB’s distribution model and related trading practices at wholesale level were sufficiently discrete, and could be conveniently and fairly determined separately from the section 8 abuse of dominance complaint.


The Tribunal held further that the prolonged delays, the Commission’s lack of readiness to proceed with the section 8 case, the distributors’ lack of legal interest in that case, and the prejudice of continued regulatory uncertainty justified separating and proceeding with the distribution-related complaints first, while staying the section 8 complaint pending further directions.


LEGAL PRINCIPLES


The Tribunal applied the principle that separation of issues under Uniform Rule 33(4) serves the convenient and expeditious disposal of litigation, and may shorten proceedings or facilitate final determination, as articulated in King v King 1971 (2) SA 630 (O).


The Tribunal applied a balancing approach in which convenience and fairness are the primary criteria, assessed case-by-case by weighing the advantages and disadvantages of separation, including considerations of expedition and procedural efficiency within the Tribunal’s mandate under the Competition Act.


The Tribunal applied the principle that overlap of evidence is a relevant factor in deciding separation but is not decisive. The assessment extends to the extent of overlap and whether procedural mechanisms can mitigate duplication, while ensuring that separation does not impose undue prejudice or unfairness on parties who have no legal interest in stayed or deferred issues.


The Tribunal applied the procedural principle that where the Tribunal’s rules do not regulate a procedure, it may have regard to the High Court rules (through Tribunal Rule 55(1)(b)) in order to manage proceedings fairly and efficiently.

IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA
CT CASE NO: 134/CR/DEC07
SOUTH AFRICAN BREWERIES LIMITED First Applicant
SAB’s APPOINTED DISTRIBUTORS
(2nd -14th Respondents) Second Applicant
and
COMPETITION COMMISSION Respondent
In the matter between:
COMPETITION COMMISSION Applicant
and
SOUTH AFRICAN BREWERIES LIMITED 1st Respondent
AFRICA’S BEER WHOLESALERS (PTY) LTD 2nd Respondent
BOLAND BEER DISTRIBUTORS (PTY) LTD 3rd Respondent
ERMELO BEER WHOLESALES (PTY) LTD 4th Respondent
GREYTOWN BEER DISTRIBUTORS (PTY) LTD 5th Respondent
MAKHADO BEER WHOLESALERS (PTY) LTD 6th Respondent
MIDLANDS BEER DISTRIBUTORS (PTY) LTD 7th Respondent
MKUZE BEER WHOLESALERS (PTY) LTD 8th Respondent
SOUTHERN CAPE BEER DISTRIBUTORS (PTY) LTD 9th Respondent
STEFQUO (PTY) LTD 10th Respondent
VRYHEID BEER DISTRIBUTORS (PTY) LTD 11th Respondent
MADADENI BEER WHOLESALERS (PTY) LTD 12th Respondent
WESTONARIA BEER DISTRIBUTORS (PTY) LTD 13th Respondent
THOHOYANDOU BEER DISTRIBUTORS (PTY) LTD 14th Respondent
Panel : Norman Manoim (Presiding Member), Yasmin Carrim (Tribunal
Member), and Merle Holden (Tribunal Member)
Heard on : 12 May 2010
Order Issued : 13 May 2010
1

_____________________________________________________________________
Reasons: Separation Application
_____________________________________________________________________
Introduction
1.]On 13 May 2010 the Tribunal issued an order in which it granted the
separation application which was brought by South African Breweries Limited
(“SAB”) and its appointed distributors. 1 These are the reasons for that
decision.
2.]The application for separation of issues was motivated on the basis of
convenience and prejudice to the respondents. The Commission opposed the
application. Before considering the merits we sketch out briefly the events
leading up to this point.
Background
3.]On 21 December 2007 the Commission referred to the Tribunal a complaint
against SAB and its appointed distributors in which it alleged that:
[31]SAB’s distribution agreements with its appointed distributors
constituted a concerted practice in contravention of section 4(1)(b)(ii),
alternatively that SAB’s wholesaler agreements and franchise
agreements are agreements between parties in a vertical relationship
which is prohibited by section 5(1) of the Competition Act (No. 89 of
1998) (the “Act”).2
1 This refers to the second to fourteenth respondents in the main matter. The second to eleventh
respondents (including fourteenth respondent which was joined later in the proceedings) are liquor
distributors with whom SAB has concluded wholesale distribution agreements, and the twelfth and
thirteenth respondents are SAB’s franchisees with whom SAB has also concluded franchised
agreements.
2 Refer to paras 7-8 of the complaint referral.

[32] SAB engaged in minimum resale price maintenance in contravention
of section 5(2) of the Act.3
[33]SAB is guilty of price discrimination in contravention of section 9 of the
Act4; and
[34]SAB abused its dominance by engaging in practices which require or
induce retail outlets not to deal with SAB’s competitors in the market
for the manufacture and sale of beer and the market for the distribution
of liquor in contravention of section 8(d)(i) and/or section 8(c) of the
Act.5
4.]The progress in these proceedings has been remarkably slow. In the first
instance the Commission’s complaint was referred to the Tribunal some three
years after a complaint had been lodged by the Big Daddy’s Group of
companies6 and other liquor wholesalers and retailers. 7 The proceedings at
the Tribunal have been plagued by a number of interlocutory disputes
between the parties over the last few years. For ease of convenience we
have set out in annexure A to these reasons, a chronology of these disputes.
5.]One worth mentioning and relevant to the issue of separation is the
exception to the complaint delivered by SAB on June 2008 in relation to the
section 8 complaint which then led to the filing of a supplementary founding
affidavit by the Commission in which it purported to set out the competitive
harm on which it relied in its section 8 complaint.
3 Refer to para 9 of the Complaint referral.
4 Refer to para 11 of the complaint referral.
5 Refer to para 10 of the complaint referral.
6 These refer to liquor wholesalers or retailers, trading primarily in the Eastern Cape and some parts
of the Western Cape.
7 This was on 25 November 2004. The Commission extended the investigation period by consent of
all the parties until the end of December 2007.
3

6.]Of particular relevance to this application is the prehearing conference held
on 8 September 2009. At that conference the presiding member had
canvassed a possible separation with the parties, as requested by the 2nd –
14th respondents (“the distributors”). At that time both SAB and the
Commission were opposed to such separation and the following timetable
was agreed upon:
[61]Filing of any further and better discovery applications on or before 23
October 2009.
[62]Hearing of further and better discovery applications if necessary on 30
November 2009
[63]Filing of factual witness statements by the Commission on or before
19 February 2010
[64]Filing of factual witness statements by the respondents on or before
12 March 2010
[65]Filing of expert reports by the Commission by 1 April 2010
[66]Filing of expert reports by the respondents by 20 April 2010
[67]Hearing date from 04 to 28 May 2010, and continue from 02 to 27
August 2010, if necessary.
7.]The Commission filed its application for further and better discovery

timeously. However it appears that the process was fraught with disputes
between the parties which led to the Commission seeking to compel SAB to
hand over documents it sought. The Commission’s application to compel
discovery was initially set down for 30 November 2009. That hearing was
however postponed, on request by the Commission, after SAB provided it with
an undertaking to consider its request. SAB only clarified its position in its
answer of 11 February 2010. In its answer SAB opposed the application on
the basis that some of the documents sought by the Commission related to a
period post December 2007 and the information sought was accordingly
irrelevant. The Commission’s discovery application was then rescheduled for
hearing on 19 May 2010 but was postponed once more to 2 June 2010 by
consent of all parties to allow them time to settle outstanding discovery
issues. This hearing was postponed further and the application, which was
modified in light of our order of separation, was only heard on 14 June 2010.8
8.]The most immediate trigger for the separation application however was the
failure by the Commission to file its witness statements on the agreed dates.
Instead of filing factual witness statements the Commission served
subpoenas on various witnesses to attend and testify at the hearing. These
included Mr Zulu and Mr Gciliza who represent the eighth and twelfth
respondent respectively, and three representatives of Brandhouse Beverages,
a competitor of SAB, whose evidence had not been foreshadowed or referred
to in the complaint referral. 9 The Commission justified its tardiness on the
basis that SAB at that time had failed to make full, adequate and proper
discovery. SAB challenged this and consequently brought an application for
the dismissal of the complaint on 23 March 2010. The Tribunal dismissed that
application and further made an order that the witness statements, and/or

application and further made an order that the witness statements, and/or
transcripts or summaries were to be filed by 24 March 2010 and on 6 April
2010.10
8 At the time the Commission’s application was limited to documents relevant to the separated
complaint.
9 SAB’s other concern with the Brandhouse evidence is that Brandhouse only became a significant
competitor of SAB subsequent to the date of the complaint referral.
10 See dismissal order. After the Tribunal granted an order for separation, a further prehearing was
held on 2 June 2010 in which it was decided that the Commission’s expert reports in respect to the
first separated matter would be filed on 5 July 2010 and the respondents’ expert reports would be filed
on 15 July 2010.
5

9.]When the Commission eventually did file its factual witness statements the
interlocutory wrangling continued. SAB brought another application to strike
out or alternatively rule as inadmissible, the Brandhouse evidence (which
related to the section 8 complaint) on the basis that it went beyond the scope
of the case pleaded in the complaint referral and referred to events that
occurred after the relevant period of the complaint referral. This issue was
ultimately resolved by the Commission’s decision to initiate a second section
8 complaint against SAB based on the Brandhouse evidence.
10.]When the time arrived for the filing of its expert witness statements on 1
April 2010, the Commission, contrary to its assurances given at the dismissal
hearing, was unable to meet its obligations and instead requested a directive
from this Tribunal regarding the impact of this on further proceedings. As a
consequence of this, the matter was not ripe for hearing and the hearing
dates for May were postponed. This left only the August 2010 hearing dates
which, if the matter were to be heard at all, would result in a period of almost 6
years having elapsed since the Big Daddy’s complaint was lodged.
Legal Framework
11.]The Tribunal rules do not expressly deal with applications for separation.
However Tribunal Rule 55 (1)(b) provides that the Tribunal may have regard
to the High Court Rules in instances where a practice or procedure is not
provided for in its own Rules.11
12.] An application for separation is governed by High Court Rule 33(4) which
provides that:
“If, in any pending action, it appears to the court mero motu that there
is a question of law or fact which may conveniently be decided either
before any evidence is led or separately from any other question, the
11 See sections 52(2) and (2A).

court may make an order directing the disposal of such question in
such a manner as it may deem fit and may order that all further
proceedings be stayed until such question has been disposed of, and
the court shall on the application of any party make such order unless
it appears that the questions cannot conveniently be decided
separately.”
13.]In King v King decision 12 It was held that Rule 33(4) is aimed at the
convenient and expeditious disposal of litigation and confers on the court the
power to shorten the duration, or to facilitate the final determination, of
actions.
14.]Convenience and fairness are the key guiding factors in the determination
of whether or not granting a separation would be suitable in the circumstances
of the case. Moreover, the exercise is guided by the facts of each case and
entails the weighing of all the advantages and the disadvantages of the
separation in the circumstances of the case. This is seldom a simple exercise
and requires careful consideration at all times. The Tribunal also enjoys a
greater degree of discretion in determining matters of procedures and is
required to conduct matters as expeditiously as possible. 13 These
considerations must also be included in the balancing exercise.
15.]Certainly as part and parcel of the inquiry what must be considered is
whether there is an overlap of evidence, and if the evidence will overlap it
may be inconvenient to grant a separation. However, the fact that such
overlap may exist does not automatically lead to inconvenience - undoubtedly
the assessment is not as narrow as it may seem. Other factors that may be
considered in the balance include the extent of the factual and legal overlap
and whether there are ways that the inconvenience can be obviated in the
circumstances if the separation is granted.
12 1971 (2) SA 630 (O) at 634F.
13 Section 55 of the Competition Act,1998 (as amended).
7

Commission’s Opposition of the Separation
16.]The Commission advanced various arguments for why the separation was
not convenient in the circumstances of this case. The Commission’s
contention was that there is no discrete “distribution case”. It argued that the
abuse and distribution cases are inextricably intertwined factually, particularly
in respect of the section 8 and section 9 complaints in so far as SAB’s overall
strategy is concerned. Further that the questions relating to dominance and
market definition straddle both the section 8 and section 9 complaints.
Secondly it argued that the section 5(2) and 8 cases both dealt with incentives
at retail level and therefore could not be separated.
17.]For these reasons, the Commission made its own proposal as to what was
convenient in the circumstances of this case. In order to salvage the August
hearing dates the Commission argued in favour of a separated cases
consisting of the section 4(1)(b) complaint and the non-retail leg of the section
5(2) complaint. The reason advanced by the Commission in this regard was
that if it found that SAB’s distribution model was best characterised as
horizontal, there would be no need to go into the section 5(1) complaint, in
which assessment of anti-competitive effects becomes relevant, as the
complaints in those sections are pleaded in the alternative.
18.]The Commission in its arguments relied heavily on the Loungefoam
decision14 which was decided by the Tribunal recently, in which a separation
of issues was granted.
First Respondent’s arguments
14 Loungefoam (Pty) Ltd and Vitafoam (Pty) Ltd v The Competition Commission Case No:
103/CR/Sep8. This was decided o 4 December 2009.

19.]According to SAB, the distribution case is self-contained and easily
separable, both legally and factually, from the abuse case, and to the extent
that there may be any factual overlaps, evidence adduced in the distribution
case, can again be used in the abuse case.
20.]As part of the convenience analysis, SAB argued that the separation will
provide the first opportunity for certainty in relation to its distribution business,
which had been under a cloud of regulatory uncertainty for a number of years.
It argued for a separated case consisting of the Commission’s section 4(1)(b)
(ii), 5(1), 5(2) and 9(1) case.
Second to Fourteenth Respondent’s Argument for Separation
21.] The second to fourteenth respondents associated themselves with SAB’s
approach in viewing the distribution case as discrete from the abuse case.
They argued for the separation because of their interests as distributors, in
the complaints under sections 4(1)(b)(ii) and 5(1) in that those complaints
challenge their distribution agreements with SAB and themselves. They
submitted that the section 5(2) and 9 complaints also relate directly to their
terms of trade with SAB and which are central to their respective businesses.
Their businesses were shrouded with regulatory uncertainty for almost 6
years. Furthermore they as appointed distributors have no interest in the
Commission’s abuse of dominance case under section 8 which is solely
directed at SAB. It would be unfair to require the second to fourteenth
respondents to be engaged in prolonged litigation, the outcome of which had
no relevance for them. In the absence of a separation, the continuing delay
will prejudice and would have significant impact on their respective business
operations. Thus a separation is manifestly convenient in the circumstances
of this case. The appointed distributors were also not agreeable to the terms

of this case. The appointed distributors were also not agreeable to the terms
of the Commission’s proposed separation, which they argued, represented
the maximum inconvenience for them.
9

22.]The distributors further contended that the alleged overlaps, to the extent
that they exist at all, are minimal in the context of the overall evidence
relevant to those complaints, and could be obviated by allowing evidence in
the first separated case to constitute evidence in the case for future
determination.
Conclusion
23.]The circumstances of this case are clearly distinguishable from those in the
Loungefoam decision.15 In that case an order of separation was granted in
accordance with an agreed separation between the parties. However that order was
subsequently withdrawn when it became clear that the issues could not be as easily
separated as initially contemplated and that the parties could not agree on
demarcation issues.
24.]This case involves a number of discrete complaints which relate to on the one
hand the relationship that SAB has with its appointed distributors at a wholesale level
(section 4(1)(b) or 5(1), 5(2) and 9(1)) and those that it has with retailers (section 8
complaint). The fact that the Commission has now initiated a further complaint
against SAB has created uncertainty about its current section 8 referral. Indeed
there is no certainty whether this complaint will eventually be referred to the Tribunal
or not. If it were referred it would be convenient because of the factual and legal
overlaps, to consolidate the current section 8 complaint with that later complaint.
However because of this uncertainty a consolidation of the matter in the near future
can only be posited as a possibility not a probability. This distinguishes this case from
Loungefoam where the Commission’s factual case justifying the re-consolidation was
complete and set out in its replying affidavits. This is not so in the present case.
25.]The distribution complaint involves SAB’s wholesale distributors (s4(1)(b) and/or
15 Supra footnote 14.

s5(1)) as does the resale price maintenance charge (s5(2)). Although there will be
some overlap between the contemplated section 8 case and the present section 9
claim in the distribution case since both entail proof that SAB is a dominant firm this
aspect should not be overstated when we consider the question of separation. For
purposes of the section 9 complaint, SAB has conceded the question of dominance 16
which will obviate the need to lead extensive evidence on market definition and
power.
26.]In our view the circumstances of this case justify the making of a separation order.
The next question is to determine a sensible basis for separation. Whilst finding a
separation that eliminates any form of overlap between the separated cases is
unlikely the most practical is that along the lines proposed by SAB and the
distributors. A clear fissure in the case is the distribution model in its various forms
versus the section 8 case. There is no doubt that a clear coherent case can go
forward in August based on the sections 4,5 and 9 complaints, and the Commission,
when it is ready, can then proceed with its section 8 case. Any further postponement
of the distribution case will be unfair to the distributors whose businesses have been
shrouded with regulatory uncertainty for a prolonged period of time. If we were not to
grant a separation along these lines we would require these relatively small
businesses to engage, at their own cost, in a section 8 case, which the Commission
by its own admission is not ready to proceed with and in which they have no legal
interest whatsoever.
27.]A separation along the lines proposed by the Commission would still require the
distributors to participate in the section 8 litigation and would defeat the very purpose
for which the separation is sought, namely considerations of convenience, fairness
and expedition.
Order
28.]In the circumstances the Tribunal makes the following order:

and expedition.
Order
28.]In the circumstances the Tribunal makes the following order:
16 See para 10.3 of the referral affidavit; paras 93.4 and 93.5 of SAB’s answering affidavit. Although it
concedes dominance SAB does so based on a different market definition to that alleged by the
Commission.
11

[28.1] The complaints against the First to Fourteenth Respondents
under sections 4 (1)(b)(ii), 5(1), 5(2) and 9(1) of the
Competition Act (No 89 of 1998) (“the Act”), found in
paragraphs 7,8,9 and 11 of the founding affidavit in the
complaint referral, (“the first separated complaint”) will be
heard and determined separately from the complaint under
section 8 of the Act, found in paragraph 10 of the founding
affidavit in the complaint referral (“the second separated
complaint”).
[28.2] The hearing of the second separated complaint will be stayed
pending further directions by the Tribunal.
[28.3] The hearing of the discovery application on 19 May 2010 is
limited to discovery required for the purpose of hearing the first
separated complaint, and is postponed sine die in respect of
the second separated complaint.
[28.4] The hearing of the first separated complaint is set down for the
period 2 to 27 August 2010.
[28.5] There is no order as to costs.
______________________ 9 July 2010
Yasmin Carrim Date
Presiding Member
Concurring: Norman Manoim and Merle Holden

Tribunal Researcher: Londiwe Senona
For the First Respondent : D Unterhalter (SC) instructed by Bowman
Gilfillan
For the Second to Fourteenth Respondents : J Wilson instructed by Deneys Reitz
For the Commission : A Gotz instructed by Mkhabela Huntley
Adekeye Attorneys
13

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