The Competition Commission recommends that Pick ‘n Pay should be prohibited from acquiring Fruit & Veg City. The Commission yesterday referred its recommendation to the Competition Tribunal where the matter will be decided following a public hearing.

Pick ‘n Pay and Fruit & Veg City are competitors in the retail market for fresh food. The Commission analysed this market from both national and a local perspectives. At the national level, the combined market share of the parties in the retail fruit and vegetable market is 58%. The parties have significant market shares in various local markets. For example, their combined market shares exceed 75% in Newcastle, Richards Bay, Bloemfontein, Lenasia, Mafikeng, and Knysna.

The Commission is of the view that the proposed acquisition would result in the removal of an effective competitor. Fruit & Veg City has grown from its first store opened in Cape Town in 1993 to approximately 80 stores country-wide. It has recently embarked on diversifying its product ranges by including other fresh food departments such as butchery, a dairy section, bakery etc. Fruit & Veg City is an increasingly effective competitor to Pick n Pay and the other major retailers; and its growing product offering will result in it being even more effective on a wider product range in future.  The acquisition of Fruit & Veg by Pick n Pay will therefore not just limit the current competition in the market, but will weaken future competition in this market.

The Commission has concluded that the proposed acquisition is likely to substantially prevent or lessen competition in the market for fresh food. The Commission has highlighted the importance of vigorous competition in the retail market to ensure product choice and competitively priced food products for consumers.

Issued by the Competition Commission

For more information, contact:

Mr.Tembinkosi Bonakele
Acting Manager: Compliance Division
Competition Commission
The dti Campus, Mulayo Building
77 Meintjies Street
Sunnyside, Pretoria

Tel: +27 12 394 3294
Fax: +27 12 394 4294