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Johannesburg - Shoprite Holdings [JSE:SHP], Africa’s biggest supermarket chain, is being investigated by Zambian competition authorities over allegations the company is threatening to delist its suppliers who enter into supply agreements with rival Pick n Pay Holdings [JSE:PWK].
The probe has been going for "just about a month", the Zambia Competition Commission’s director of mergers and monopolies, Chilufya Sampa said.
He could not say how long the investigation would take, Business Day reported on Tuesday.
"These type of investigations usually take a long time because of their nature. They’re a bit more secretive and (it’s) more difficult to get documents," Sampa said.
If found guilty of wrongdoing, under new Zambian law Shoprite could face a fine equivalent to 10% of its local turnover. The company said on Monday it had no knowledge of any investigation.
Pick n Pay said it would co-operate with Zambian authorities.
With only an estimated 30% to 40% of Zambian consumers being customers of formal retailers, the country is already well served. Spar is also present and has six stores, according to the company’s website. Pick n Pay’s planned expansion will only increase the competition.
Shoprite, with 19 stores in the central African country, has been there since 1995. Pick n Pay opened its first store in Lusaka in July and plans to have another four stores there by the end of next year.
