SOUTH AFRICA – Distell, South Africa’s wine and spirit producer is accusing the entity formed from the 2016 merger of the world’s largest beer companies Anheuser-Busch InBev and SABMiller of breaching merger conditions.
Distell approached the Competition Tribunal claiming that the merged entity removed competitors’ advertising material from retail outlets, among others, reports Reuters.
However, the Competition Commission has maintained that there is no breach of the merger conditions and that the complaints “have no merit and should be dismissed,” the tribunal added.
In response SABMiller argues that Distell’s complaint is an “attempt to restrict competition and is unrelated to the merger conditions.”
In turn Distell has asked for a detailed review and for a full investigation to be conducted prompting the competition watchdog to say that it will consider Distell’s submissions during a hearing scheduled for Thursday and Friday.
The merger which was worth more than US$100 billion saw the bringing together of AB InBev’s Budweiser, Stella Artois and Corona brands with SABMiller’s Peroni, Grolsch and Pilsner Urquell brands.
The sale of SABMiller’s Distell stake was a condition of the Competition Tribunal’s approval of the merger.
In the year ending 30 June 2019, Distell suffered a slight push in its home market.
Sales volume in Distell’s domestic market, South Africa fell by 0.9% which the company partly attributed to and increased value offerings by competitors particularly in beer.
As part of the company’s efforts to stay afloat in the country’s liquor market valued at between R106.1bn and R129bn, the group said that it took “tactical pricing decisions” during the full-year, which had a “positive effect on revenue and margins”
Distell still maintains that it will continue to defend and grow its South African business with a targeted increase in market share across its portfolio, while seeking to drive category growth through innovation.
South Africa is a unique market and requires local growth strategies, however, global growth trends are also evident in the market with the liquor industry growing ahead of consumer packaged goods, driven by white spirits and beer.
Brewers and distiller in the market are poised to capitalize on flavour exploration and providing healthier product options as key growth driver for white spirits and craft beer.