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Shoprite, Pick n Pay, Spar and Woolworths being investigated by Competition Commission

| Legislation

A major investigation into South Africa’s multi-billion rand grocery retail sector is currently underway at the Competition Commission following claims that the country’s four largest retailers – Shoprite, Pick n Pay, Spar and Woolworths have developed a choke-hold on the market.

The four largest supermarket chains operating in South Africa, collectively account for more than 90% of the market, said the Commission. These firms are able to operate as grocery anchor tenants in shopping centres and malls of various sizes.

However, there has been growing concern from smaller operators that the big 4’s strength has prevented other competitors from entering the market.

Public hearings are currently underway in Cape Town with the Commission’s inquiry probing six major problem areas. These include:

  • The impact of the expansion, diversification and consolidation of national supermarket chains on small and independent retailers;
  • The impact of long term exclusive leases on competition in the sector;
  • The dynamics of competition between local and foreign owned small and independent retailers;
  • The impact of regulations, including inter alia municipal town planning and bylaws on small and independent retailers;
  • The impact of buyer groups on small and independent retailers;
  • The impact of certain identified value chains on the operations of small and independent retailers.

The Cape Town public hearings will end on Friday 12 May and will then move to Gauteng and KwaZulu-Natal.

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