SAB welcomes ruling by Competition Tribunal

Monday, March 24th, 2014

South African Breweries (SAB) has welcomed the ruling by the Competition Tribunal which has found that the company did not engage in any anti-competitive behaviour.

The ruling follows a case of alleged anti-competitive behaviour brought by the Competition Commission which was heard by the Tribunal between 2010 and 2013. The case was the result of an investigation into allegations related to SAB’s distribution system and pricing activities between 2004 and 2007, with the allegations having been referred to the Competition Tribunal in 2007.

SAB executive chairman Norman Adami said the company had always been confident that none of its practices were in breach of the law and that it had not engaged in any anti-competitive behaviour. “SAB has structured its business to serve retailers and consumers and strongly believes that all businesses have the right to distribute their products in the manner that best serves their needs. We are most pleased that this has been recognised by the Tribunal, ” he said.

Adami said SAB strongly believed that competition is good for the industry as it results in greater choice, innovation, higher quality and lower prices for consumers. In addition,  SAB fully supports the aims and objectives of the Competition Act. SAB confirms its unwavering commitment to operating in a way that is pro-consumer and pro-competitive.

Background

The case was in the public domain for several years, having been referred to the Competition Tribunal in 2007 by the Competition Commission after a three year investigation between 2004 and 2007. The original complaint lodged by Big Daddy’s head Nico Pitsiladis with the Competition Commission alleged that SAB charged the Big Daddy’s group as a wholesaler the same price as the company charged to retailers, thereby preventing Big Daddy’s from earning a fair margin on its sales to retail.

The case that was presented by the Competition Commission before the Competition Tribunal related to SAB’s distribution system; an alleged practice of minimum resale price maintenance; an allegation of price discrimination and broad, diffuse allegations relating to abuse of dominance. The abuse of dominance allegations were previously separated from the “distribution” case and may proceed separately although the Commission has taken no further steps on this part of the case.

SAB applied in 2011 to have the case dismissed, arguing that the case presented to the Tribunal was not the same as the original complaint laid by the Big Daddy’s group in 2004. This was upheld by the Tribunal in April 2011.

Following the Tribunal’s dismissal of the case in April 2011, the Competition Commission applied to the Constitutional Court for direct access to the Constitutional Court, bypassing both the Competition Appeal Court and the Supreme Court of Appeal. In December 2011,  the Constitutional Court handed down a decision in which it dismissed, with costs, the Competition Commission’s direct access application.

The Commission subsequently filed an appeal with the Competition Appeal Court, which was heard on 13 September 2012. In November 2012, the Competition Appeal Court announced it had upheld the Commission’s appeal and set aside the Tribunal’s ruling. This resulted in the resumption of the Commission’s case against SAB, which was heard before the Tribunal in July and August 2013.

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