Competition Commission to assess supermarkets investigation - CNBC Africa

Competition Commission to assess supermarkets investigation

Southern Africa

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Commission may re-open supermarkets investigation. PHOTOS:

This follows after the commission received new complaints from commercial property owners to re-look exclusive clauses in long term lease agreements between shopping centre owners and retail anchor tenants.

“The property owners association alleges that these give rise to considerable competition concerns and could amount to substantial prevention or lessening of competition in violation of the Competition Act,” said the commission in a statement.

The complaint is currently being screened by the commission before a decision is made on whether to launch a full-scale investigation or not.

Earlier this year, the commission concluded its investigation into exclusive leases enforced by South Africa’s three major supermarket groups, Pick n Pay, Shoprite, and Spar, and found that the anti-competitive effects could not be demonstrated conclusively.

(READ MORE: Competition Commission concludes retail investigation)

“The evidence did not meet the test required in order to prosecute the firms involved and therefore the commission took a decision not to refer the matter to the tribunal,” continued the statement.

“The commission remains concerned about the potential dampening effects of exclusive leases on competition, particularly as they affect small competitors and potential entrants to the market.”

The commission added that parties should only enter long-term exclusive agreements if a supermarket is making a significant investment in a particular centre. Otherwise, an exclusive agreement should be discouraged.

(READ MORE: Shoprite sues Massmart in exclusivity battle)