Staff Reporter
THE Namibian Competition Commission (NCC) has imposed a fine of N$2,200,000 on Choppies Supermarket for violating the Competition Act by implementing a merger with Grootfontein Supermarket and Grootfontein Bottle Store without the approval of the NCC.
“The Commission’s investigation found that Choppies contravened Section 44, read with Sections 51 and 53 of the Competition Act. Choppies and Mr Johannes Jacobus De Jager, trading as Grootfontein Supermarket and Grootfontein Bottle Store, entered into a Memorandum of Agreement on 12 May 2022 and 19 May 2022, which constituted an acquisition for the purposes of the Competition Act,” Dina //Gowases, NCC’s Corporate Communications Practitioner, revealed.
//Gowases explained that the acquisition by Choppies resulted in a change of control in Grootfontein Supermarket and Grootfontein Bottle Store, constituting a merger as defined in Sections 42(1) and (2) of Chapter 4 of the Competition Act. However, she explained that while the merger fell within the prescribed notification thresholds, the parties failed to notify the Commission, as required under Section 44 of the Act.
She revealed that the NCC and Choppies therefore agreed to settle the matter and entered into a settlement agreement, wherein Choppies would pay a pecuniary penalty of N$2,200,000.00 and implement a compliance programme on competition law in Namibia.
“The parties to the merger operate in the Commission’s defined market of fast-moving consumer goods. This entails the selling of goods to consumers, which generally have a short shelf life, in relatively small quantities for use or consumption rather than resale. In its investigation, the Commission found that although the transaction did not have a negative impact on competition – due to the existing market concentration in the town of Grootfontein at the time of the transaction – the transaction nonetheless breached the notification thresholds established under the Competition Act,” //Gowases said.
She highlighted that the Commission’s investigations into unnotified mergers are not merely punitive but aim to uphold its mandate of promoting fair market competition to support inclusive growth and development.
“For this reason, it is imperative that all mergers above the monetary thresholds are notified to the Commission, to ensure the protection of consumer rights, opportunities, and the general welfare of the competitive landscape. The determination, fit for the Commission, can best be made during the consideration of a merger notification, before any possible anti-competitive effects materialise in the market following a transaction that may not have been notified to the Commission,” //Gowases said.
She emphasised that competition enforcement and merger regulation are preventive measures to avoid market structures that encourage anti-competitive behaviour.
“All merger transactions meeting the prescribed thresholds are required to be notified for assessment of possible market effects and clearance by the Namibian Competition Commission. This has the benefit of protecting consumers from potential abuses that can result from market dominance. Specifically, merger assessments aim to ensure that merging firms will not have the ability to raise prices, reduce quantity and/or quality, or reduce the range of customer service post-merger,” //Gowases added.
