competition competition policy mergers and acquisitions public policy regulation

SABMiller buyout will test merger guidelines

THE takeover of South African firms by international companies excites a lot of passion. There was heated debate when Massmart became a subsidiary of US retail giant Walmart. Stakeholders raised concerns when AgriGroupe went off with Afgri, Du Pont Pioneer with a majority stake in Pannar, Glencore with Xstrata and Shanghai Zendai with a big chunk of Modderfontein. Now along comes the so-called MegaBrew deal, the takeover of SABMiller by Anheuser-Busch InBev (AB InBev), one of the biggest transactions in global corporate history. Strictly speaking, SABMiller is not South African. Its primary listing is in London. The most significant equity block is held by Altria (26.99%, the company’s latest annual report shows), followed by a company associated with the Santo Domingo family (13.99%).

Readers of the fashion media will be familiar with the Santo Domingo name for other reasons. The Public Investment Corporation owns just more than 3%. But SABMiller is, or was, one of the most South African companies imaginable with its Johannesburg roots, its production line of corporate stars and rainbow nation advertisements. History aside, the company sells more than 90% of the beer consumed in SA, according to a company presentation made last year.

This is a significant company by any measure, with touchpoints across many value chains. The implications of its future ownership by AB InBev will be analysed carefully by the authorities.

competition media

Business Day Column: All is not well in the marketplace of ideas

My column this week warns about how market power potentially undermines media freedom:

So much points to mainstream media as a natural oligopoly, even in the digital age. The Competition Commission characterises the industry as an emerging priority sector due to its “concentration and high barriers to entry”. But to repeat the oft-made point, market power does not in itself mean readers and viewers are getting a bad deal on price, access and quality. There are efficiencies that come with scale. Rivalry can proceed unimpeded even in a market constituted by few firms. That’s in theory.

At least three competition investigations into companies’ behaviour are under way, indicating all is not well in the marketplace of ideas. 


Lingering questions about market power and its exercise, and how this shapes the newsroom, chip away at the legitimacy and credibility of this important segment of society. We have to watch this space.

For the full column, go here

competition competition policy

BUSINESS DAY COLUMN: Flouting of competition laws is Apple’s worm

My column in today’s Business Day reflects on Apple’s anti competitive practices:

I HAVE a confession to make. For years, I’ve had a blind spot when it comes to Apple. I have been enchanted by the myth of Apple and Steve Jobs so that, despite having been a competition enforcement practitioner, I paid little attention to reports of the company’s competition law troubles.

This month, a trial is under way in the US examining Apple’s practices with regards to audio downloads played on the iPod. In many minds, Apple is the David to Microsoft’s Goliath, with Jobs as the maverick. It’s hard to think of a visionary outsider as anything but pro-competition.

For more, go to

competition competition policy economic policy industrial inputs political economy

Fifteen years of competition regulation in post-apartheid South Africa

Photo: Chris Kirchhoff,
Photo: Chris Kirchhoff,

This month the Competition Commission, Competition Tribunal and Competition Appeal Tribunal celebrate fifteen years of pursuing the ideal of fair and efficient markets in South Africa.
A look back on one of the most ground-breaking cases the Commission has taken on, known as the Hazel Tau case, which saw the price of antiretrovirals from global manufacturers brought down:

Today, over a decade since lodging that complaint, Tau works for a research programme in health economics at Wits University.

But at the time, the victory at the Commission was bitter-sweet. Many of Tau’s comrades and colleagues lost their lives before antiretrovirals became affordable and widely available.
The authorities’ main anniversary featured Ebrahim Patel, Minister of Economic Development, as keynote speaker.


Patel will also consider the extent to which the law, as it stands, allows the competition authorities to break up giants that behave anti-competitively. The pricing practices of dominant firms will also be under scrutiny, to see if amendments are needed to deal with pricing practices considered harmful.

The South African Venture Capital Association is holding a masterclass on merger control on 18 September, following one on abuse of dominance held on the 11th. For a brief Q&A with the convenor of the masterclass, go to


In tough economic times employment security and protecting consumers’ pockets take on a heightened importance. In mergers, potential job losses especially amongst unskilled and semi-skilled workers, who earn lower incomes, will be of concern. I also expect to see a greater focus on abuse of dominance, in other words single-firm behaviour as opposed to cartels. Recent successful abuse of dominance cases such as Telkom and Sasol set the framework for future investigations.

An opinion piece at Business Day with a focus on excessive pricing, with reference to the recent Tribunal ruling against Sasol:


In short, local plastics manufacturers pay an import parity price for polypropylene, the most significant input in production. This is in a market context where there is a greater supply of polypropylene than local manufacturers can absorb. Sasol Chemical Industries exports about half of its production to international markets, notably Asia, where it charges a lower price to manufacturers in those markets. It’s also worth noting that Sasol Chemical Industries is globally a low-cost producer of the input as it enjoys a special cost advantage due to the state’s historical investment in and support for the company.


The tribunal heard that the firm’s pricing practice has stunted plastics manufacturers, who are rendered unable to compete with their international counterparts.


competition private healthcare

The healthcare market inquiry panel issues statement on its approach (and disclosures of interest)

Direct link to statements: Health inquiry page

Statement from the Competition Commission:

30 May 2014
Health Inquiry panel publishes the statement of issues and guidelines for participation public comment
The Private Healthcare Inquiry Panel has today published the “Statement of Issues” and “Guidelines for Participation in the Market Inquiry into the Private Healthcare Sector” for public comment.
The Panel hereby invites members of the public and affected stakeholders to comment on the statement of issues and guidelines for participation.  These documents can be accessed on the Competition Commission and Health Market Inquiry websites at and Written comments on the two documents can be e-mailed to The closing date for comments is Monday, 30 June 2014.
PS! Also see published Disclosures of interest.