E-Malt.com News article: South Africa: SAB seeks to speed up hearing its complicated case

South Africa’s beer market leader SAB has insisted its application for a separation of its complaint referral to the Competition Commission be considered, as a delay in the hearings was jeopardising the company's distribution model, Business Report communicated on May, 13.

In the matter before the Competition Tribunal, the local division of SABMiller and 12 other respondents (the distributors) are arguing that it is necessary to separate the issues in this case, as it appears that it will not be possible to hear the entire complaint referral in August, given the complex pending technical issues involved.

The commission has opposed the separation on the basis that it will not be convenient, especially in light of the overlapping of certain specific complaints.

SAB's counsel, David Unterhalter, has proposed a separation of the distribution case from the market abuse case.

The distribution case consists of the commission's accusation that SAB was "acting in concert" with the distributors and that it was abusing its dominance in the industry.

The allegations by the commission relate to SAB's distribution system; an alleged practice of resale price maintenance; and an allegation of price discrimination.

The abuse case deals with SAB alleged engagement in practices that require retail outlets not to deal with SAB's competitors for the manufacturing and sale of beer, and the distribution of liquor.

Unterhalter said on May, 12 that the case had been hanging for five years and that it came down to a question of fairness. "How long do the parties have to wait for their day?" he asked.

He said the commission had attacked the company's distribution model.

"SAB considers it an efficient model for empowerment but does not know whether it can be used for empowerment because it might be illegal.

"The distributors have no certainty and do not know whether they are working in businesses that are unlawful. That this should be pending for another year and a half... is unfair," Unterhalter said.

Jerome Wilson, the counsel for the distributors, said the prejudice to the appointed distributors from the continuing delay in this matter was very real and had impacted significantly on their respective business operations.

"The delays have perpetuated the uncertainty facing the appointed distributors in respect of the central aspects of their respective models and the lack of resolution has impacted on their business and chilled the progression of transactions in the industry," he said.

Anthony Gotz, counsel for the commission, said the watchdog did not view its complaint referral as an attack on SAB's distribution model.

"There is no merit in the hysterical claim that SAB's entire distribution model is in jeopardy. The commission seeks to prohibit isolated clauses in the agreement between SAB and the appointed distributors... SAB has effectively conceded that the manner in which its computer system had been set up necessitated changes... to bring it within the requirement of the act," Gotz said.

The tribunal's decision on separating the cases is pending.


14 May, 2010