Massmart in competition battle with rivals

Massmart in competition battle with rivals

2014-11-03 11:38

Johannesburg - Massmart Holdings has filed an anti-competition complaint against three major rivals to fight their exclusive leases with shopping centres, the discount retailer said on Monday.

The unit of Wal-Mart Stores said it had filed the complaint with South Africa's competition watchdog against grocers Shoprite [JSE:SHP], Pick n Pay [JSE:PIK] and Spar [JSE:SPP] over leases it says are anti-competitive.

Massmart, known for its Makro chain of wholesale stores, has been on a push to increase its grocery business. However, that effort has been hampered as some shopping centres have agreed to an exclusive lease with another grocer, spokesperson Annaleigh Vallie said.

The exclusive leases can last anywhere from five to 20 years, she said.

READ: Shoprite takes on Walmart

"The company is of the opinion that exclusive lease agreements are intuitively anti-competitive and prevent it from developing an offering that can compete effectively with the entrenched, national retail chains," Massmart said in a statement.

Shoprite is Africa's largest retailer and Pick n Pay is South Africa's second-largest grocer, trailing behind Shoprite.

Shares of Shoprite, Pick n Pay and Spar were all down around 1%, slightly underperforming the Johannesburg All-Share index, which was flat.

Massmart was also down nearly 1%.

READ: Game: Shut down by Shoprite

  • Sarah Stanton - 2014-11-03 13:21

    I am not sure they have the right to infringe on a contractual agreement between two other parties. It's taking the anti competition laws too far. In essence, they are objecting to a rental agreement in which they play no part.

      Freddie Jones - 2014-11-03 15:01

      "I am not sure" This is why it will be tested in court. To make sure.

  • Duck Durant - 2014-11-03 15:46

    I'm of the opinion these agreements are restrictive towards my right of choice amongst different offerings. basically it prohibits me from making a choice based on competitiveness and price within the same confines.

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