Walmart-owned retailer Masstores has taken its battle with Pick n Pay Retailers to the Constitutional Court.
The fight is over whether Pick n Pay is entitled to prevent Masstores’ Game from selling fresh foods in its store at the Cape Gate shopping centre‚ by enforcing an exclusive right to trade as a supermarket.
Traditionally‚ mall anchor tenants have some form of exclusivity rights in their lease agreements‚ with the mall owner agreeing it will be the only supermarket at the mall.
Such arrangements were the norm for many years.
The case may determine how far traders can go in enforcing exclusivity rights against their competitors‚ even where there was no contract between the two.
In terms of a lease agreement with Pick n Pay‚ the owner of the Cape Gate Centre agreed that only Pick n Pay and Checkers would be allowed to conduct the business of a supermarket or to sell fresh food products.
In terms of Masstores’ lease agreement‚ Game was allowed to sell nonperishable food but could not “trade as a general food supermarket”.
However‚ in 2013 Masstores’ Game expanded its range to fresh produce and fresh-packaged meat and poultry.
Pick n Pay then went to court‚ saying this was an unlawful interference in its contractual relationship with the owner of the mall.
The court interdicted the interference and the effect was that Game was prevented from selling fresh food at the mall. An appeal to the Supreme Court of Appeal failed.
But in the Constitutional Court on Tuesday‚ Masstores counsel Fanie Cilliers SC said Pick n Pay had to show that Game had done something unlawful.
However, Pick n Pay counsel David Unterhalter SC said all Pick n Pay needed to show was that by selling food‚ Game had usurped a role the owner had given to Pick n Pay.
Judgment was reserved.