The Competition Tribunal has approved SAB’s acquisition of the SA rights to Smirnoff’s ready-to-drink brands and Guinness-branded products from Diageo, which owns brands such as Johnnie Walker and Captain Morgan.

A Business Day report notes the tribunal has attached several conditions to its approval of the licensing agreement that are designed to prevent SAB from reducing competition.

In terms of the conditions, competitors must be given access to SAB and Diageo cooler facilities. It has also instituted measures to regulate the flow of information between SAB and Diageo ‘to avoid inappropriate exchanges of competitively sensitive information’.

The tribunal has prohibited SAB from inducing customers to buy any of the Smirnoff or Guinness brands on condition that they also purchase clear beer products from SAB.

‘However, SAB will still be able to have specific promotions in which the licensed brands and SAB brands can be sold and promoted as a combined offering for a limited duration,’ the tribunal said.

A number of the tribunal’s conditions appear to be designed to ensure that the Smirnoff and Guinness brands remain viable competitors in the market.

To this end, SAB will be required to meet specific growth targets for the Smirnoff brands in line with the growth of other flavoured alcoholic beverages.

Full Business Day report