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Competition authority confirms end to Shoprite's exclusive lease agreements

| Legislation

Grocery retailer Shoprite Checkers will no longer be able to enforce exclusivity clauses on lease agreements against small and independent retailers.

This follows the Competition Tribunal’s decision to confirm a consent agreement between the Competition Commission and Shoprite Checkers on the grocery retailer stopping its enforcement of the exclusive lease agreement clauses. The agreement with the commission will also include the retailers OK Foods and Usave businesses. 

Last year the commission released its Grocery Retail Market Inquiry Report, following a 12-year investigation on exclusive lease agreements by grocery retailers. The report found that there was no need for the exclusive lease agreements that Shoprite, and South Africa’s other big grocery retailers, Pick n Pay, Spar and Woolworths had with their landlords.

On Monday in a statement, the commission said agreements retailers have in non-urban areas will end immediately and will be phased out of urban areas over the next five years.

“The opening of space in shopping centres as a result of this historic agreement also provides an opportunity for new businesses to emerge in the South African retailing environment and this is crucial in providing consumers with product choice and alternative places to shop for grocery products,” Competition Commissioner Tembinkosi Bonakele said.

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