Distell ordered to relinquish control of Martell a
Distell ordered to relinquish control of Martell and KWV brands
In early February this year, the Competition Tribunal found that the merger
between Distillers and SFW, which resulted in the formation of Distell, would
likely cause a substantial lessening of competition in the proprietary spirits
market. After a hearing to determine an appropriate remedy in respect of the
abovementioned market, the Tribunal today, 18 June 2003, has ordered that:
1. Distell relinquish control of 2 key brands in the South African proprietary
spirits markets, namely the Martell and KWV brands. This means that control of
the Martell brand will revert to the owner of the brand, Pernod Ricard while
control of the KWV brand will revert to KWV. The Martell brand has recently
been the subject of vigorous litigation in which Distell has won the right to
retain its distribution rights In terms of the order. However, in terms of this
order, Distell will terminate all contracts with Martell (this will include
Martell VO and Martell 5-star). Distell will similarly terminate its
distribution agreements with KWV in respect of all KWV brands (including KWV 10-
and 20 year old Brandy).
2. A director or nominee of KWV (or any company in the group) cannot be
appointed as a director of Distell (or any company in the group).
In the panel"s view, both Pernod Ricard and KWV are companies with considerable
resources and expertise in the liquor industry and both are capable of providing
viable competition in the proprietary spirits market.
The remedy in respect of KWV, specifically includes a prohibition on KWV
nominating a director to Distell"s board. This goes some small way towards
curing the structural problem which arose in consequence of the market sharing
agreement of the late 70"s.
Issued by: Jane Sussens
Jane Sussens
Communications Advisor
Tel: (011) 483 2687
Cell: 082 9200 875
Fax: (011) 483 2686
On Behalf of: Shan Ramburuth
CEO
The Competition Tribunal
Tel: (012) 482 9204
Fax (012) 482 9201
Cell: 083 3571 685
E-Mail: shanr@comptrib.co.za
Date: 18/06/2003 05:16:48 PM Supplied by www.sharenet.co.za
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