GEN - General - The Competition Tribunal - Complaint That BATSA Had Abused Its
JSE
GEN
GEN - General - The Competition Tribunal - Complaint, That BATSA Had Abused Its
Dominance, Dismissed By Tribunal
Complaint, that BATSA had abused its dominance, dismissed by Tribunal
The Competition Tribunal has today 25 June 2009, dismissed the application by
the Competition Commission to impose a fine on British American Tobacco South
Africa (BATSA), of up to 10% of its annual turnover, for abusing its dominance
by engaging in exclusionary acts in contravention of sections 8(c), and 8(d)(i)
of the Competition Act.
Both the Competition Commission and the complainant JT International South
Africa ("JTI"), referred a complaint to the Tribunal. They allege that BATSA, a
wholly owned subsidiary of British American Tobacco plc, is dominant in the
market for the supply of manufactured cigarettes in South Africa.
They further allege that certain agreements concluded between BATSA and selected
cigarette retailers (BATSA`s "trade investment" agreements) and certain of
BATSA`s retailer incentive programmes ("Vecta" and "Sprint" programmes)
incentivised the retailers to market and sell BATSA brands irrespective of the
price and/or quality advantages that competitor brands may offer consumers over
BATSA brands and irrespective of customer demand.
It was also alleged that these agreements and programmes ensure that BATSA
secured preferential, alternatively exclusive, access to the point of sale for
promotional purposes. It is these latter allegations - BATSA`s alleged dominance
of the points of sale - that were most vigorously pursued by the applicants.
This conduct, insist the applicants, redounds to the ultimate detriment of
cigarette consumers whose choice is restricted and who, in consequence of this
reduced competition, are obliged to pay higher prices than would otherwise be
the case.
JTI additionally alleged a violation of Section 5(1) of the Competition Act,
claiming that BATSA is in a vertical relationship with the various retail
outlets and that certain agreements concluded between the cigarette
manufacturers and retailers have the effect of substantially preventing or
lessening competition.
Issued by: Jane Sussens
Communications Advisor
The Competition Tribunal
Tel: (011) 482 8118
Cell: 082 920 0875
Fax: (011) 482 8119
On Behalf of: Lerato Motaung
Registrar
The Competition Tribunal
Tel: (012) 394 3355
Cell: 082 556 3221
E-Mail: leratom@comptrib.co.za
www.comptrib.co.za
Date: 25/06/2009 11:46:01 Produced by the JSE SENS Department.
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