Tribunal dismisses case against SAB

A CASE brought by the Competition Commission against the distribution system of South African Breweries (SAB) was dismissed by the Competition Tribunal yesterday.

The tribunal found the commission did not present “sufficient evidence” to prove SAB’s distribution system lessened intrabrand competition – between firms that distribute SAB-branded beer – as the commission had alleged.

The commission investigated the distribution model following a complaint by Port Elizabeth businessman Nico Pitsiladi from Big Daddy Group in 2007 that he was being shut out of the beer distribution market because it was impossible to make any margins.

One of the problems with the commission’s case was that it focused entirely on the system of appointed distributors‚ which accounted for only 10% of SAB’s method of beer distribution‚ the tribunal found.

“Given this‚ no remedy was likely to have a great impact on the market and‚ even if a remedy was imposed‚ SAB could easily make its distribution system conform to the remaining 90% of distribution which was not under attack from the commission‚” the tribunal found.

The commission claimed that SAB‚ with a market share of about 90% of clear beer‚ appointed distributors and gave them exclusive territories in which to distribute its products‚ thus restricting competition between the various appointed distributors.

It said it was not convinced that the appointed distributors were responsible only for the distribution of about 10% of SAB’s volumes.

SAB executive chairman Norman Adami said the company had always been confident none of its practices was in breach of the law and that it had not engaged in any anti-competitive behaviour. – Amanda Visser

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