South Africa: Four grocers under scrutiny for blocking rivals

Leasing agreements between South Africa’s big-four food retailers and shopping mall owners will come under scrutiny from the anti-trust watchdog, it said on Friday, as it gave details of its competition investigation into the sector.

Large food retailers Shoprite, Pick n Pay, Spar and Woolworths together make up more than 90 percent of the $18 billion a year grocery market. They are accused of blocking rivals with exclusive shopping mall leases.

The probe, announced last month, comes after Massmart, a unit of Arkansas-based Wal-Mart, lodged a complaint with the regulator saying its expansion plans were being hampered by the leasing arrangements.

The leases can restrict malls from renting out space to rival retailers for five to 20 years.

The Competition Commission published the objectives of its investigation into the sector for public comment on Friday, saying the exclusive lease agreements could be causing distortions in the retail market.

“The Commission is initiating the grocery retail sector inquiry because it has reason to believe there are features in the sector that may prevent, distort and restrict competition,” it said in the terms of reference posted on its website.

Full content: Reuters

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