THE Competition Commission on Thursday said it had appointed a panel for the Grocery Retail Sector Market Inquiry, which is due to tackle the exclusivity of lease agreements at shopping malls — a battle being fought largely among big retail chains.
Halton Cheadle, Lulama Mtanga and Lumkile Mondi have been appointed as chairman and panelists of the inquiry, respectively. The hearings will likely be completed by then end of May 2017.
First announced in May 2015 by Economic Development Minister Ebrahim Patel, the inquiry will largely examine lease exclusivity clauses among SA’s supermarket giants, and the market dynamics of small and independent retailers including foreign operators.
The probe is coming as the long-delayed Health Market Inquiry got underway in Pretoria this week. This inquiry is the first since the Competition Act was amended to give the commission more powers.
The banking inquiry in 2006 required voluntary co-operation from the banking sector, but this time around the commission has the legal muscle to summons people to testify or to provide documents. One of the key aspects under scrutiny is how prices are determined
The Grocery Retail Sector Market Inquiry is meant to examine if there are features in the grocery retail sector that lessen, prevent or distort competition.
Slowing income growth, high household debt and the rising cost of living have prompted big retailers to launch an aggressive space race to capture consumers’ spend — both in city suburbs and townships serviced by smaller players.
By far, the most contentious issue to be scrutinised is that of lease exclusivity at malls.
Court cases on exclusivity clauses involving Shoprite, Pick n Pay, Massmart and Fruit & Veg City’s Food Lover’s Market have so far delivered mixed results.
In some instances exclusivity clauses have been relaxed but Massmart — which is pushing into the grocery space — has hit a brick wall, spurring it to file a complaint with the Competition Tribunal in September 2014.
Mall developers often sign exclusivity agreements with anchor tenants in the hope that they will attract other high-quality businesses and shoppers. Exclusivity provisions in mall lease contracts block the sale of certain types of food and groceries by other retailers.
The panel will be supported by a team of investigators comprising the commission’s economists and lawyers, and expert consultants.
Change: -1.15%
Change: -1.40%
Change: -1.29%
Change: -1.60%
Change: 0.06%
Data supplied by Profile Data
Change: 0.16%
Change: -0.25%
Change: -1.15%
Change: 0.00%
Change: -0.47%
Data supplied by Profile Data
Change: 0.03%
Change: -0.04%
Change: 0.14%
Change: 0.29%
Change: -0.33%
Data supplied by Profile Data
Change: -0.50%
Change: -0.21%
Change: 0.13%
Change: -0.40%
Change: 0.26%
Data supplied by Profile Data