A farm worker sits on a water tank as he supplies his livestock with water at a farm outside Utrecht, a small town in the northwest of KwaZulu-Natal. Picture: REUTERS/SIPHIWE SIBEKO
A farm worker sits on a water tank as he supplies his livestock with water at a farm outside Utrecht, a small town in the northwest of KwaZulu-Natal. Picture: REUTERS/SIPHIWE SIBEKO

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THE Competition Commission has blocked a merger between JoJo Tanks and another water tank manufacturer, which could have put farmers in deeper financial strain as they battle SA’s drought.

The commission said on Thursday that the proposed merger between JoJo Tanks and Nel Tanks would reduce competition in two Western Cape markets — the supply of vertical water tanks and horizontal transport tanks.

"The merged entity is likely to have the ability to increase prices unilaterally, which may be passed on to the end-users such as farmers‚" it said in a statement.

JoJo Tanks manufactures plastic tanks‚ ranging in size from 260 litres to 30,000 litres‚ for domestic and agricultural use. It also produces other plastic products such as portable toilets and dog kennels.

Nel Tanks manufactures‚ among other things‚ plastic tanks for the storage of water‚ chemicals‚ fertilisers and other liquids.

While JoJo Tanks is a nationwide operation‚ Nel Tanks is based in Cape Town.

Nel Tanks director Etienne Nel said that the merging parties were not in a position to comment on the commission’s decision until they had consulted an attorney.

JoJo Tanks MD Grant Neser said that the company was still considering its options after receiving the news.

Mandla Buthelezi of the African Farmers Association of SA on Friday welcomed the Commission’s decision‚ saying a merger of this kind would affect all farmers‚ but that small-scale farmers would be hit hardest.

"Commercial farmers are able to pay for the tanks (if prices should increase) but the issue is smaller‚ previously disadvantaged farmers who rely on government and private funders," Dr Buthelezi said. "They will not be able to afford to purchase the tanks (any longer)."

TMG Digital