COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: LM014Apr21
In the matter between:
Mr Price Group Ltd Primary Acquiring Firm
And
K2018509367 (South Africa) (Pty) Ltd (“Yuppiechef”)Primary Target Firm
E Daniels (Presiding Member)
Y Carrim (Tribunal Member)
Panel:
A Ndoni (Tribunal Member)
Heard on: 19 July 2021
Order Issued on: 19 July 2021
ORDER
Further to the recommendation of the Competition Commission in terms of section
14A(1)(b) of the Competition Act, 1998 (“the Act”) the Competition Tribunal orders that–
1. the merger between the abovementioned parties be approved in terms of section
16(2)(a) of the Act; and
2. a Merger Clearance Certificate be issued in terms of Competition Tribunal Rule
35(5)(a).
19 July 2021
Presiding Member
Mr Enver Daniels
Date
Concurring: Ms Yasmin Carrim and Ms Andiswa Ndoni
Date : 19 July 2021
To : Bowmans Attorneys
Case Number: LM014Apr21
Mr Price Group Ltd And K2018509367 (South Africa) (Pty) Ltd
(“Yuppiechef”)
You applied to the Competition Commission on 16 April 2021 for
merger approval in accordance with Chapter 3 of the Competition
Act.
Your merger was referred to the Competition Tribunal in terms of
section 14A of the Act, or was the subject of a Request for
consideration by the Tribunal in terms of section 16(1) of the Act.
After reviewing all relevant information, and the recommendation
or decision of the Competition Commission, the Competition
Tribunal approves the merger in terms of section 16(2) of the Act,
for the reasons set out in the Reasons for Decision.
This approval is subject to:
x no conditions.
the conditions listed on the attached sheet.
The Competition Tribunal has the authority in terms of section 16(3)
of the Competition Act to revoke this approval if
a) it was granted on the basis of incorrect information for which
a party to the merger was responsible.
b) the approval was obtained by deceit.
c) a firm concerned has breached an obligation attached to
this approval.
The Registrar, Competition Tribunal
Notice CT 10
About this Notice
This form is prescribed by the Minister of Trade and Industry in terms of section 27 (2) of the Competition Act 1998 (Act No. 89 of 1998).
Contacting
the Tribunal
The Competition Tribunal
Private Bag X24
Sunnyside
Pretoria 0132
Republic of South Africa
tel: 27 12 394 3300
fax: 27 12 394 0169
e-mail: ctsa@comptrib.co.za
Merger Clearance Certificate
This notice is issued in
terms of section 16 of
the Competition Act.
You may appeal
against this decision to
the Competition
Appeal Court within 20
business days.
1
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM014Apr21
Mr Price Group Limited (Primary Acquiring Firm)
and
K2018509367 (South Africa) Proprietary Limited (Primary Target Firm)
REASONS FOR DECISION
[1] On 19 July 2021, the Competition Tribunal unconditionally approved a
large merger between Mr Price Group Limited and K2018509367
[2] Mr Price Group will acquire 100% of the issued shares of Yuppiechef, such that Mr
Price Group will wholly control Yuppiechef, post-merger.
[3] Mr Price Group is listed on the JSE and is not controlled by any single shareholder or
firm, but controls several entities across Southern Africa. It operates through various
brands in South Africa.1
[4] Yuppiechef is controlled by multiple shareholders and controls Yuppiechef Holdings
Holdings in turn controls the following
firms in South Africa: Edison Stone (Pty) Ltd (Edison Stone), Yuppiechef Digital (Pty)
Ltd (Yuppiechef Digital), and Yuppiechef Online (Pty) Ltd (Yuppiechef Online).2
[5] The
stores, which are complimented by active social media engagement and marketing
through platforms such as Instagram, Facebook and YouTube, so that customers can
purchase products online for delivery or collection throughout South Africa.
[6] Yuppiechef is a South African retailer, focused on the supply of kitchen and homeware,
furniture, and appliances, mainly via its website (online sales). Yuppiechef operates
division, which develops, and
imports branded goods, primarily kitchenware, for wholesale distribution to retail
customers in South Africa. Its focus is on the middle-to-upper income customers who
value quality and detail.
[7] In its competition assessment, the Competition Commission identified
a horizontal overlap, in that the merging parties are both active in the retail of
homeware and related products in South Africa, as well as a vertical overlap as
Yuppiechef, though Edison Stone, is a wholesaler of homeware product while Mr Price
Yuppiechef, though Edison Stone, is a wholesaler of homeware product while Mr Price
Group, through Mr Price Home is active as a retailer of homeware products.
1 These brands are Mr Price, Miladys, Mr Price Sports, Mr Price Home, and Sheet Street.
2 Yuppiechef and all of .
2
[8] In its horizontal assessment, the Commission did not conclude on definitive product
and geographic markets. The Commission, nonetheless, assessed the competitive
effects of the proposed transaction in the following markets:
8.1. The broad national market for the retail of homeware, furniture and appliances;
8.2. The national downstream market for the retail of homeware products;
8.3. The national upstream market for the wholesale of homeware products;
8.4. The national market for the retail of furniture; and
8.5. The national market for the retail of appliances.
[9] In these markets, the Commission, found that the merging parties would have low post-
merger market shares, and would continue to be constrained by other players in each
of the above markets.
[10] In determining closeness of competition between the merging parties, the Commission
considered the channel used to sell products by the merging parties, product
characteristics and customer focus. In this regard, the Commission found that Mr Price
and Yuppiechef are unlikely to be considered close competitors in the relevant
markets.
[11] In its vertical assessment, the Commission found that the vertical overlap in the
merging parties is unlikely to result in foreclosure.
[12] The Commission, during its investigation, received concerns from two third parties.
The first concern was raised by a competitor of Edison Stone, who is also a supplier
to Yuppiechef. The concern raised was that Mr Price Group may use their buying
power to replicate their brands at a lower price range, thus pricing their brands out of
the market. The merging parties submitted, among others, that the concerns raised
are not merger-specific as Mr Price Group would have the ability to offer lower-priced
brands absent the merger, regardless as to whether or not Edison Stone was part of
the Mr Price Group.
[13] The second concern was raised by a customer of Edison Stone, who is also a
[13] The second concern was raised by a customer of Edison Stone, who is also a
competitor of Yuppiechef. The concern in this instance was that, combined, the two
entities would have dominance across the entire homeware market, thus making it
difficult for other retailers to compete as they share amongst other things, expertise,
skills and budgets. A further concern was
combined with the attraction of the Yuppiechef platform and their combined footprint
and market coverage, could result in brands giving them exclusivity, which will impact
negatively on the homeware market. Additionally, it was submitted that the
combination of the Mr Price Group and Yuppiechef will likely grant them a strong
thereby isolating or dominating the supply chain to the detriment of other retailers. In
response, the merging parties submitted that Yuppiechef does not have the rights to
retail any brands exclusively on an ongoing basis, although it may have the exclusive
right to retail certain product ranges (or products within ranges) for a limited period of
time. Further, such agreements are typical in respect of imported homeware products
globally and are also common in South Africa. Additionally, the merged entity would
have a low market share and thus fail to meet the Competition Act
. As such, it would have
number of rivals it faces, the ability of customers to switch to other stores, and the
strong position of global suppliers to negotiate to supply retailers all over the world.
3
[14] The Commission was of the view that the proposed transaction is unlikely to
substantially lessen or prevent competition.
[15] the Commission contacted the
employee representatives representing the employees of the acquiring group and the
target firm, and no concerns were raised.
[16] In assessing whether the merger would have an impact on a particular industrial sector
or region, the Commission considered submissions from the Department of Trade
The DTIC was of the view that the acquisition, if
approved, will result in Mr Price having full access to a successful e-commerce
platform that will enhance its e-commerce offering and income. Further, the DTIC
submitted that Yuppiechef website has a category of South African produced
products offered for sale on their e-commerce platform. In this regard, the DTIC
required Yuppiechef to provide them with information on the percentage of sales of
locally produced goods that it sold in the last three financial years. Further, the DTIC
stated that as contemplated in terms of section 12A(3) of the Competition Act, the
merged entity is required to make offers of listing of South African-produced goods that
will suit the product mix of the merged entity on its e-commerce platform.
[17] In response, the merging parties submitted that, Yuppiechef does currently offer a
range of products that are produced in South Africa as its business is focused on the
sale of premium or high-end international brands. The merging parties also submitted
that Mr Price is focussed on increasing its local procurement as far as possible. This
focus includes its participation in the Retail-Clothing, Textile, Footwear and Leather
(R-CTFL) Masterplan Initiative (Masterplan) through its membership of the National
Clothing Retail Federation. Its intention is to maintain and, where possible, improve
local procurement in line with the Masterplan, which is being implemented across
existing Mr Price business. Once Yuppiechef forms part of the Mr Price Group,
existing Mr Price business. Once Yuppiechef forms part of the Mr Price Group,
Group
targets,
[18] listing
of South African-produced goods that will suit the product mix of the merged entity on
its ecommerce platform, the parties explained that neither Yuppiechef nor Mr Price
Group
Report
on Competition in the Digital Markets or an online/ digital intermediary platform.
Yuppiechef does not connect buyers and sellers through an online platform (like
Takealot), but rather, it operates a website through which it sells the products that it
has itself curated and sourced. It assumes the risk by buying products from suppliers,
based on its product and pricing strategy, to appeal to its niche target market.
Therefore, it would not be appropriate to require the merged entity to make any offers
Secondly,
the parties submitted that Yuppiechef is focused on sales of premium branded (mainly
imported) kitchen and homeware to South African consumers and does not sell any
products to customers outside of South Africa. The proposed transaction will
accordingly not impact on sales of locally made products to customers in any
international markets.
[19] The Commission further found that the proposed transaction will result in the promotion
of a greater spread of ownership as envisaged in section 12A(3)(e) of the Competition
Act, as pre-merger, Yuppiechef does not have an HDP shareholding. However,
Yuppiechef will, post-merger, be wholly controlled by Mr Price Group, whose shares
are widely held, including by historically disadvantaged individuals.
4
[20] We concluded that the proposed transaction is unlikely to substantially lessen or
prevent competition in any relevant market, or to have a negative impact on the public
interest.
19 July 2021
Mr Enver Daniels Date
Ms Yasmin Carrim and Ms Andiswa Ndoni concurring
Tribunal Case Manager: C Mathonsi
For the Merging Parties: H Irvine and K Lloyd of Bowman Gilfillan
For the Commission: Z Siyo and M Aphane