Specialist retailer OBC Better Butchery is hauling Spar to the Competition Commission for contravening a 2019 ruling by enforcing exclusivity clauses in certain shopping malls, effectively shutting out competition.

The 2019 market inquiry by the commission unequivocally states that national supermarket chains must stop enforcing exclusivity provisions – or provisions that have a substantially similar effect – in their lease agreements against SMMEs, speciality stores and other grocery retailers in shopping centres located in non-urban areas.

The Daily Maverick reports that the three biggest supermarket groups in the country are Shoprite, Pick n Pay and Spar, all three of which are listed on the JSE.

Commission spokesperson Siyabulela Makunga said Spar has failed to comply with the with the 2019 and, ‘in contrast, Shoprite and Pick n Pay have come to agreements with the commission’.

DM notes that Tony Da Fonseca, managing director of OBC Better Butchery, earlier this month said the company has entered into lease agreements where the landlord is prohibited from renting commercial retail space to competitors such as OBC.

‘While attempting to conclude lease agreements for available space in various shopping centres where Spar is the anchor tenant, the landlord has openly communicated to us that they cannot conclude a lease agreement with us as Spar is enforcing their exclusivity clause,’ he said.

In all four cases, the landlord is Vukile Property Fund.

Full Daily Maverick report