February 13, 2018 / 1:56 PM / 2 years ago

UPDATE 2-South Africa dismisses Massmart anti-competitive complaint against rivals

(Adds Massmart comment)

JOHANNESBURG, Feb 13 (Reuters) - South Africa’s Competition Tribunal on Tuesday dismissed a complaint brought by Massmart accusing grocery retailers of anti-competitive behaviour, saying the unit of Wal-Mart had failed to present a strong case.

The decision is a blow for Massmart’s ambitions to expand further into the grocery market, which is dominated by industry giants such discounter Shoprite and upmarket retailer Woolworths.

Massmart is in the middle of transforming its flagship Game chain from a primarily electronics retailer to one that sells groceries.

It lodged the complaint in 2014, saying its expansion into the fresh grocery sector was being hampered by lease arrangements that restrict malls from renting out space to rival food retailers.

The tribunal upheld, for the second time, arguments made by retailers Shoprite Checkers, Pick n Pay and Spar Group and found that Massmart had failed to make a strong case of anti-competitive conduct.

“The other problem for Massmart is that its business case has driven its competition case and not vice versa,” the tribunal said in a statement.

Massmart is disappointed that the merits of its case were not assessed by the Competition Tribunal, its spokeswoman said.

“We remain of the view that exclusive lease agreements are intuitively anti-competitive, protectionist and prejudicial to South African consumers,” Massmart spokeswoman Annaleigh Vallie said in an emailed response to questions.

“We are optimistic that this view, which we expressed at the Grocery Retail Market Inquiry, will shape the panel’s findings.”

The Competition Commission is finalising its sector-wide investigation, known as the Grocery Retail Market Inquiry, which is also examining competition between small informal foreign-owned shops and local stores popularly known as “spazas”. (Reporting by Tiisetso Motsoeneng and Nqobile Dludla; Editing by Adrian Croft)

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