Nu Africa’s abuse complaint against Distell dismissed
The Competition Tribunal has dismissed an abuse of dominance complaint brought by Nu Africa Duty Free Shops against Distell, reports HeraldLIVE.
Nu Africa is a retailer of duty-free liquor and other products through their retail outlets in Pretoria and Cape Town.
Distell, which was acquired by Heineken in April this year, supplied duty-free liquor to Nu Africa in terms of a supply agreement.
The matter arose after Distell stopped supplying liquor products to Nu Africa, claiming duty-free products it supplied to the retailer had made their way into the South African duty-paid market, a form of illicit alcohol trading known as ‘tax leakage’.
Nu Africa denied Distell’s claims and asked the tribunal for an order declaring that Distell’s conduct amounted to an exclusionary act in contravention of the Competition Act.
The Competition Commission, which investigates matters before deciding whether to refer them to the tribunal for adjudication, decided not to refer this case. Nu Africa then self-referred the matter to the tribunal.
On Wednesday, the tribunal said it did not adjudicate on the question of whether illicit trade did in fact take place on the part of Nu Africa.
Instead, it focused on whether the cessation of supply by Distell amounted to exclusionary conduct in terms of the law.
On Nu Africa’s claim that Distell’s conduct has impeded its expansion, the tribunal found that Nu Africa had not demonstrated that its business has not grown or continued to grow since the cessation in supply.
‘The available evidence suggests otherwise, or at least that the impact is likely to have been ambiguous ... We find that there are no anticompetitive effects emanating from Distell’s conduct,’ the tribunal said.
On Distell’s justification for cessation of supply, the tribunal said it could not dismiss the fact that Distell was within its contractual rights to cease supply if it believed that a violation of its illicit trade provisions had occurred.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.