The Tribunal will hear a variation application by Shoprite Checkers (Pty) Ltd ("Shoprite”), in which Shoprite is asking the Tribunal to modify its consent agreement with the Competition Commission (confirmed as an order by the Tribunal in October 2020).
Shoprite concluded the consent agreement following recommendations made by the Commission in the Grocery Retail Market Inquiry (“GRMI”) concerning long term exclusive lease agreements with landlords of shopping centres.
Long-term exclusive lease agreements, entered into between property developers and supermarkets, include provisions that restrict the landlord from letting premises in the same shopping centre to potentially competing grocery retailers and specialty stores (exclusivity provisions). The GRMI report noted that these types of agreements harm customers by limiting consumer choice in shopping centres. It concluded that there were no compelling justifications to substantiate the continued unfettered presence of long-term exclusive lease agreements.
The reasons advanced by Shoprite for the variation include: (i) the different terms contained in the Shoprite consent order as against that of Pick n Pay ("PnP”) whereby Shoprite has to, among others, remove exclusivity in its lease agreements by 17 December 2024. PnP has until 31 December 2026 to do so. In Shoprite’s view, the PnP consent agreement is more favourable despite stemming from the same GRMI report recommendations; (ii) circumstances occasioned by the COVID-19 pandemic; and (iii) the July 2021 civil unrest and looting.
The Commission is opposing Shoprite’s variation application.
The hearing of the merits of Shoprite’s application will take place on 15 December 2022.
Issued by:
Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib