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The Competition Commission announced on Tuesday that it would investigate the activities of Distillers and SFW.
The probe will affect South African Breweries, KWV Investments and Rembrandt. Rembrandt and KWV together own 60% of Distillers and SFW. SAB has a 30% stake in Distillers.
The commission said the investigation followed the submission of evidence that, among other things, the groups were restricting others' activities and abusing their market dominance.
According to the commission, players in the liquor industry expressed concern at the proposed Distillers-SFW merger and the market dominance that would result.
SFW's Bennie Howard said shareholders of the two companies received a letter from the Competition Commission a few months ago stating that the commission had no objections to the proposed merger. The new investigation therefore comes as a surprise.
Canadian liquor group Seagrams, which sells Martell brandy, has asked the High Court to halt the SFW-Distillers merger.
Seagrams wants a Competition Board decision on the merger based on the new company holding a 77% interest in the brandy market.
The investigation is said to be taking place at Seagrams' request. But the merger does not really fall under the commission's jurisdiction because there will be no change of ownership after the merger.
Yet Seagrams insists the commission must decide because the companies and not the shareholders are the participants in the merger û giving rise to a new corporate ownership body.
Said to fear distribution of its Martell brand will be jeopardised, Seagrams supposedly made two claims against SFW and Distillers.
The Seagrams application for an interdict against the merger will be heard on Friday.
About three weeks ago, fearing a loss of 1 800 jobs, trade unions asked the Department of Trade & Industry to stop the merger.
