Skip to main content

Competition Commission initiates market inquiry into the retail grocery sector

| Legislation

On 12 May 2015, Economic Development Minister Ebrahim Patel announced that the Competition Commission would conduct a market inquiry into the retail grocery sector in terms of s43B of the Competition Act, No 89 of 1998 (Act).

The market inquiry will involve all shops that predominantly sell fast moving consumer goods. It encompasses all types of retail offerings from small informal businesses and independent grocery stores to supermarket and wholesale groups. The Commission has indicated that it believes that this market has features that may prevent, distort or restrict competition.
 
On 12 June 2015, the Commission published its draft terms of reference in the Government Gazette for public comment. The scope of the market inquiry will, at this stage, include the following six issues:

 

  •  the impact of the expansion, diversification and consolidation of national supermarket chains on small and independent retailers in townships, peri-urban and rural areas and the informal economy;

 

  • the impact of long term exclusive leases entered into between financiers, property developers and national supermarket chains on competition in the grocery retail sector;

 

  •  the dynamics of competition between local and foreign owned small and independent retailers in townships, peri-urban areas, rural areas and the informal economy;

 

  • the impact of regulations, including, among other things, municipal town planning and by-laws on small and independent retailers in townships, peri-urban areas, rural areas and the informal economy;

 

  • the impact of buyer groups on small and independent retailers in townships, peri-urban areas, rural areas and the informal economy; and

 

  •  the impact of certain identified value chains on the operations of small and independent retailers in townships, peri-urban areas, rural areas and the informal economy.

 

In addition to these six broad issues, the Commission indicated that it may consider the competitive dynamics in the grocery retail sector, including pricing practices, extent of consumer choice and innovation, the impact of franchise retailers, and the causes and impact of the decline in small and independent retailers in townships, peri-urban areas, rural areas and the informal economy.

The closing date for all public comments was Friday 3 July 2015. Going forward, the Commission has the option to amend the Terms of Reference taking into consideration the public submissions, alternatively it may publish the final Terms of Reference, triggering the commencement of the market inquiry into the retail grocery sector.

Pin It

Related Articles

Electricity Regulation Bill will open competiti...

By: Siyabonga Mkhwanazi - IOL Mineral Resources and Energy Minister Gwede Mantashe says the Electricity Regulation Amendment Bill will open competition in the market.

New Minimum Wage Set to Take Effect on March 1s...

As the countdown to the implementation of the new minimum wage draws closer, the nation finds itself at the precipice of a profound transformation in its labour landscape. With revised minimum wage regulations set to come into force on March 1st...

Spar director fined R1 million after refusing n...

By: Brenda Masilela - IOL The Johannesburg Labour Court has fined Spar director R1 million after he refused on more than one occasion to reinstate a worker who was unfairly dismissed.

SARS wants to change VAT collection in South Af...

The South African Revenue Service (SARS) has published a discussion paper on ways to modernise the VAT collection process.

Pick n Pay: Retailer must compensate Springbok ...

by Ahmed Areff – News24 Pick n Pay has been found liable by the Western Cape High Court for damages claimed by Maria Williams, wife of the late Springbok winger Chester Williams, who was injured after slipping and falling at one of its supermarkets.