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South Africa: In watchdog’s fight against SAB, testimony backs drink giant

By  |  August 13, 2013

Testimony offered by economic expert Stephan Malherbe, who stood witness for South African Breweries, said that SAB is not legally obliged to outsource its business activities in the case heard before the Competition Tribunal last Monday. The Competition Commission is looking to require SAB to nix its exclusivity clauses that appoint distributors for its products. But Malherbe said South African competition law does not require companies to outsource such practices, and that the “rule of reason” approach should be used in this case, with the complainant holding the burden of proof. Further, the witness said, blocking the exclusivity agreements would not necessarily lead to increased competition or lowered prices. But the Commission says an investigation into SAB found anticompetitive effects on the beverages market, and that the exclusivity agreements lead to price-fixing and market allocation. The probe was launched following a complaint issued in 2004.

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