ED STODDARD, Johannesburg | Wednesday
SOUTH Africa’s Competition Commission has launched a probe into the practices of a number of alcoholic beverage companies, including industry giants South African Breweries and KWV Limited.
The commission said in a statement it was also investigating Stellenbosch Farmers’ Winery Ltd (SFW), as well as Rembrandt Ltd and its subsidiary Distillers.
”The Commission’s decision to initiate the complaint is based on evidence pertaining to general restrictive practices, conditions of trade, collusion and the abuse of a dominant position,” the Commission said.
”By initiating a complaint we are saying that we have begun an investigation,” Commission representative Karin Coode said.
The Commission also said it would investigate complaints by industry players about a proposed merger that would see Distillers acquire SFW in a deal valued at R515m ($68 million).
”Participants in the industry have raised concerns about the dominant position that the parties to the merger have in the industry,” it said.
It said industry players alleged the merger would, ”amongst others, substantially increase barriers to entry for new entrants into various markets within the industry”.
Rembrandt and KWV between them own 60% of both companies while SAB has 30% of both. ”If this probe only focused on this merger it would not be a big deal for SAB. But it seems to be far more wide-ranging than that and that is not good for SAB or the sector,” said one industry analyst.
An SAB representative said, ”We cannot really comment until we know what sector they are looking at it. We have not been contacted by the competition authorities yet”.
The other companies involved were not immediately available for comment.
SAB’s share price gained to close 0.22% higher in Johannesburg at R46.40 after initially falling 0.76% on the news. In London, where it has its primary listing, it was trading 1.62% lower at 426 pence.
Distillers ended four cents higher at 850 cents while SFW closed 3.13% lower at 310 cents while KWV was unchanged and untraded at R11.80. – Reuters