April 17, 2003
By Ann Crotty
Johannesburg - The Competition Tribunal yesterday asked Distell and the Competition Commission to make further proposals on remedies that could address the concerns of the competition authorities following the September 2000 merger between Distillers Corporation and Stellenbosch Farmers' Winery (SFW) to create Distell.
Yesterday's tribunal hearing did not reach any conclusions regarding remedies. It will be reconvened on June 6 to consider further proposals.
In a ruling in February, the tribunal stated that the merger between Distillers and SFW was likely to cause a lessening of competition in one segment of the market in which the merged entity traded.
The affected segment was proprietary spirits, which incorporates medium-priced brandy, whisky, gin, vodka and cane spirits and includes some of South Africa's best-known spirit brands
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The tribunal, which did not require the merger to be unwound, said in February that Distell controlled a "very significant share of the market for proprietary spirits and barriers to new entry are extremely high".
Much of yesterday's hearing was held in camera because it involved discussion of allegedly sensitive matters such as market shares and brand profitability.
Distell also is probably keen that there is no public discussion of any of the brands that might be possible divestiture targets.
The commission has recommended that Distell be required to sell some of the brands in the affected segment.
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