Commission okays Schweppes takeover

THE Competition and Tariff Commission has okayed Delta Beverages the acquisition of Schweppes Zimbabwe Ltd saying the deal did not create a monopoly.

Delta acquired a 49% stake in Schweppes but the acquisition has been awaiting the commission’s nod.
The commission says the merger did not create a monopoly in the beverages sector because Delta was already a dominant player.
“After identifying the relevant market, the commission considered the dominance factor should the merger be approved. It was noted that the pre-merger situation is that Delta Beverages was the dominant player in the relevant market and that this position would prevail post de-merger
The commission said it reached the decision within the confines of the law.
The commission added: “The commission was however alive to the fact that the relevant law is not against market dominance per se but is against the abuse of such dominance. The question for consideration was therefore, is Delta Beverages going to abuse its markets dominance should the commission approve the merger.
Anti- competition allegations have emerged in the past with new players claiming that Delta’s behaviour towards competitors was rather “predatory”.
The commission looked at cases such a Nesbitt Breweries, Royal Crown Cola and Mr Juicy where the company could have been involved in anti-competition strategies such as “price wars” to fight competitors.
“The commission was of the view that such anti-competitive practices could be curbed by the imposition of appropriate conditions and that the Act contained sufficient provisions to deal with such practices,” said the commission.
The remaining Schweppes shareholding is in the hands of management and an employee share option trust.
But exiled businessman Mutumwa Mawere is still fighting for the return of Schweppes Zimbabwe after government seized his
assets for allegedly externalising foreign currency.
Delta is listed on the Zimbabwe Stock Exchange.

 

Chris Muronzi

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