About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Competition Tribunal
SAFLII
>>
Databases
>>
South Africa: Competition Tribunal
>>
2014
>>
[2014] ZACT 38
|
|
Super Group Trading (Pty) Ltd v Greystone Trading 6 CC (018333) [2014] ZACT 38; [2014] 1 CPLR 138 (CT) (26 March 2014)
COMPETITION TRIBUNAL
OF SOUTH AFRICA
Case
No: 018333
In the matter between:
SUPER GROUP TRADING
(PTY) LTD
Primary
Acquiring Firm
And
GREYSTONE
TRADING 6
CC
Primary
Target Firm
Panel
:
T
Madima (Presiding Member)
:
A
Roskam (Tribunal Member)
:I
Vaiodia (Tribunal Member)
Heard
On
:
26
February 2014
:26
February 2014
:26
March 2014
Reasons for Decision
[1]
On 26 February 2014, the Competition Tribunal unconditionally
approved the acquisition by Super Group Holdings (Pty) Ltd of
Greystone
Trading 6 CC as a going concern.
[2]
The reasons for approving the proposed transaction follow.
Parties
to transaction
Primary
acquiring firm
[3]
The primary acquiring firm is Super Group Trading (Pty) Ltd
(“SGT”). SGT is a wholly owned subsidiary of Super Group
Holdings (Pty) Ltd (“Super Group Holdings”). Super Group
Holdings is ultimately controlled by Super Group Limited,
a company
listed on the Johannesburg Securities Exchange Limited (“Super
Group”). Super Group’s top five shareholders
are:
•
Allan Gray
•
Public Investment
Corporation
[1]
•
Visio/Mazi Capital
(Hedge funds)
•
PSG Online
Securities Broking
•
Investec Asset
Management
[4]
Super Group controls the following firms:
•
Bluefin
Investments Limited
•
Emerald Insurance
Company Limited
•
Fleet Africa (Pty)
Ltd
[5]
SGT directly controls the following firms:
•
Super Group Africa
•
Chataprop Holdings
98 (Pty) Ltd
•
Lexsheil 280
Investments (Pty) Ltd
•
Micor Freight
(Pty) Ltd
•
Rentrack (Pty) Ltd
[6]
Super
Group is a supply chain management business. Of relevance to the
proposed transaction is the business activities of Super
Group
Convenience (“SG Convenience”), a division operated under
SGT. SG Convenience offers a centralised warehouse
and distribution
centre for all trading formats below forma! retail (low-end
retail).
[2]
SG Convenience also purchases liquor from integrated distributors or
independent liquor distributors and redistributes it to certain
low
end retailers.
Primary
target firm
[8]
The primary target firm is Greystone Trading 6 CC trading as
Restaurant and Hotel Liquor Distributors (“R&H”). R&H
is jointly controlled by Amaro Fernades and Alda Mario Fernades.
[9]
R&H distributes liquor to low-end retailers such as
hotels, restaurants and small liquor outlets situated in Cape Town
and the
surrounding areas. R&H distributes liquor to low-end
retailers in the Western Cape region.
Proposed Transaction
[10]
In terms of the Sale of Business Agreement between Super Group
Trading and Greystone Trading 6 CC, it is agreed that SGT will
acquire
the business of R&H as a going concern.
Rationale
[11]
SGT wishes to expand its presence within the market for the
distribution of liquor to hotels and restaurants in the Western Cape
region and as such would like to acquire the business of R&H as a
going concern.
[12]
R&H Close Corporation members wish to realise their
investment by selling the business as a going concern to SGT.
Relevant Market and
Impact on Competition
[13]
There
is a horizontal overlap between the activities of the merging parties
in respect of the distribution of liquor to low-end
retailers in the
Western Cape area.
[3]
[14]
We
identified, in line with a previous decision in this regard,
[4]
a separate market for the wholesale and retail of liquor. We further
identified a narrow market for the redistribution/wholesaling
of
liquor to low end retailers, as well as a broader market of
distribution of liquor to retailers in general. Thus the relevant
market for the purpose of assessing the proposed transaction is the
redistribution/wholesaling of liquor to small independent /low-end
retailers in the Western Cape area, which represents the narrowest
market in which competition concerns are likely to arise.
[15]
The estimated market shares of R&H and SGT in the relevant
market are 3% and 1% respectively. The merged entity will have an
estimated combined market share of 4% with an accretion of 3%.
[16]
We are of the view that the merged entities’ market
share is low and unlikely to raise any competition concerns.
Furthermore,
there are a number of viable competitors such as
Makro/Masscash, Ultra liquor, Diamond Discount Liquor and Liquor
Runners who also
supply low-end retailers. Customers therefore have
the option of purchasing directly from the integrated, appointed or
independent
distributors, thus further exerting a constraining
influence upon the merged entity post-merger.
Conclusion
[11]
In the circumstances of the above we conclude that the
proposed transaction is unlikely to substantially prevent or lessen
competition
in the market for the redistribution/ wholesaling of
liquor to low end retailers. In addition, no public interest issues
arise
from the proposed transactions. Accordingly we approve the
proposed transactions unconditionally.
26
March 2014
DATE
____________________________
Takaiani
Madima
Anton
Roskam and Imraan Valodia concurring
Tribunal
Researcher: Moleboheng Moleko
For
Merging Parties : Bianca Ellisa and Andile Nikani - Fluxmans
Attorneys For the Commission: Nompucuko Nontombana
[1]
PIC also has interests in Barloworld SA, Imperial Holdings, Bidvest
(McCarthy). Combined Motor Holdings and Unitrans Automotive.
[2]
Low-end retailers are small independent firms that have fragmented
buying patterns who are occasionally unable to meet
the minimum
order quantities required by the manufacturers for direct delivery,
whereas high-end retailers are large integrated
firms with their own
distribution network and typically buy directly from the
manufacturer through the manufacturer’s distribution
channels.
[3]
This geographic market comprises a radius of approximately 500km
from Cape Town. In this regard see pages
11
-12
of the Commission’s Report.
[4]
See Massmart Holdings (Pty) Ltd and Picardi Liquors (Pty) Ltd Case
Number 47/LM/AugOl.