Grocery Retail Sector Market Inquiry In South Africa

July, 2016

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The Grocery Retail Sector Market Inquiry In South Africa By Louise du Plessis, Thabo Khumalo and Yariv Pavese (Competition Commission of South Africa)

The Competition Commission of South Africa has initiated its third general market inquiry—the first inquiry was into the retail banking sector and the second, ongoing, inquiry is into the private healthcare sector. The Inquiry will focus on shops that primarily sell fast-moving consumer goods, whether as wholesalers or retailers, particularly in townships, peri-urban areas, rural areas and the informal economy.  In this article, the authors outline the Inquiry’s basis, scope and procedural context.

  1. Introduction

On 27 November 2015, the Competition Commission of South Africa (“Commission”) initiated a market inquiry into the South African grocery retail sector (“Inquiry”) and published its Terms of Reference (ToR) in terms of section 43B of the Competition Act No. 89 of 1998, as amended (“the Act”).  The initiation of the Inquiry was prompted largely by increased complaints to the Commission regarding the prevalence of exclusivity clauses in lease agreements between property developers and national supermarket chains. In 2014, the Commission concluded an investigation into exclusive leases entered into between large retail shopping centres and retail anchor tenants, finding that there was insufficient evidence to conclusively demonstrate the anticompetitive effects of the leases—it non…

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