Publications
Partners
Cape Town - The losers in the legal battle between Shoprite Checkers and Massmart are the consumers, according to Massmart.
The Western Cape High Court found on Tuesday that the exclusivity clause in Shoprite’s Cape Gate lease contract protects Shoprite from competition, allowing them to preclude Game Stores (and any other new entrant) from selling certain perishable goods in the Cape Gate Shopping Centre.
An interim interdict was granted to Shoprite Checkers [JSE:SHP] against Mass Stores and Hyprop Investments. This interim inderdict is in place pending the outcome of Shoprite Checkers’ application for a final interdict in this regard.
"We respectfully disagree with the finding and intend to fight the matter on appeal," Brian Leroni, Massmart's Group Corporate Affairs Executive told Fin24 on Tuesday.
"The losers in this action are all South African consumers who, through the device of exclusivity clauses, are denied the benefit of a free and fair competitive trading environment."
In response to a query from Fin24, Shoprite CEO Whitey Basson said he is pleased that the legal principles had been applied correctly.
Basson said the options of consumers visiting Cape Gate are certainly not being limited as both Pick n Pay and Woolworths have been trading in the centre, offering the same range of products and customers are free to choose where they want to buy.
Basson said customers of the Shoprite Group can rest assured that Shoprite Checkers is the cheapest supermarket chain in South Africa.
He said the group is not reliant on competition from competitors to offer its customers the lowest possible prices.
The supermarket chain's pricing in stores where it had an exclusivity clause with landlords of a centre, is also the same as in its stores in centres where there is no such clause in its lease agreement, Basson said.
Terms of the interdict
The interim interdict prohibits and restrains the Mass Stores [JSE:MSM], owned by the US retail giant Walmart and operating a Massmart Game store in the Cape Gate Shopping Centre, from using any part of the shopping centre in Brackenfell, Cape Town, for selling certain food items and liquor.
In terms of this interim ruling Mass Stores is prohibited and restrained from operating as a supermarket or grocery store by selling products like bread, chilled chicken, processed meats, cheese, creams, yogurts, eggs, fresh milk and meat.
Mass Stores is also temporarily prohibited and restrained from using any part of the Cape Gate Centre to operate as a butchery, bakery, fish shop, fruit and vegetable shop, a dispensary or delicatessen.
By selling the listed items and having the listed speciality offerings Shoprite Checkers claims the Massmart Game store in Cape Gate is competing directly against its outlet in the same mall.
Mass Stores has asked the Competition Commission to investigate the matter.
There is an exclusivity clause as part of the lease agreement which Shoprite Checkers entered into with the centre’s landlord, Hyprop. Shoprite Checkers’ current lease at Cape Gate is still valid for about 15 years.
These kinds of clauses usually help to ensure that anchor tenants of new shopping centre developments could be assured of limited competition.
- Fin24
The Western Cape High Court found on Tuesday that the exclusivity clause in Shoprite’s Cape Gate lease contract protects Shoprite from competition, allowing them to preclude Game Stores (and any other new entrant) from selling certain perishable goods in the Cape Gate Shopping Centre.
An interim interdict was granted to Shoprite Checkers [JSE:SHP] against Mass Stores and Hyprop Investments. This interim inderdict is in place pending the outcome of Shoprite Checkers’ application for a final interdict in this regard.
"We respectfully disagree with the finding and intend to fight the matter on appeal," Brian Leroni, Massmart's Group Corporate Affairs Executive told Fin24 on Tuesday.
"The losers in this action are all South African consumers who, through the device of exclusivity clauses, are denied the benefit of a free and fair competitive trading environment."
In response to a query from Fin24, Shoprite CEO Whitey Basson said he is pleased that the legal principles had been applied correctly.
Basson said the options of consumers visiting Cape Gate are certainly not being limited as both Pick n Pay and Woolworths have been trading in the centre, offering the same range of products and customers are free to choose where they want to buy.
Basson said customers of the Shoprite Group can rest assured that Shoprite Checkers is the cheapest supermarket chain in South Africa.
He said the group is not reliant on competition from competitors to offer its customers the lowest possible prices.
The supermarket chain's pricing in stores where it had an exclusivity clause with landlords of a centre, is also the same as in its stores in centres where there is no such clause in its lease agreement, Basson said.
Terms of the interdict
The interim interdict prohibits and restrains the Mass Stores [JSE:MSM], owned by the US retail giant Walmart and operating a Massmart Game store in the Cape Gate Shopping Centre, from using any part of the shopping centre in Brackenfell, Cape Town, for selling certain food items and liquor.
In terms of this interim ruling Mass Stores is prohibited and restrained from operating as a supermarket or grocery store by selling products like bread, chilled chicken, processed meats, cheese, creams, yogurts, eggs, fresh milk and meat.
Mass Stores is also temporarily prohibited and restrained from using any part of the Cape Gate Centre to operate as a butchery, bakery, fish shop, fruit and vegetable shop, a dispensary or delicatessen.
By selling the listed items and having the listed speciality offerings Shoprite Checkers claims the Massmart Game store in Cape Gate is competing directly against its outlet in the same mall.
Mass Stores has asked the Competition Commission to investigate the matter.
There is an exclusivity clause as part of the lease agreement which Shoprite Checkers entered into with the centre’s landlord, Hyprop. Shoprite Checkers’ current lease at Cape Gate is still valid for about 15 years.
These kinds of clauses usually help to ensure that anchor tenants of new shopping centre developments could be assured of limited competition.
- Fin24
