Competition Authority decision riles Sefalana
Isaac Pinielo | Wednesday August 24, 2016 18:00
As a direct competitor of Choppies, Sefalana fears that the approval of the acquisitions might disadvantage them in an uncompetitive manner.
Sefalana Group managing director, Chandra Chauhan told Mmegi Business that they are not happy with the decision made by the authority, but declined to discuss the matter further.
“We are not happy with their decision, but do not wish to engage with the media in that discussion,” he said. The authority had indicated that it decided to authorise the proposed acquisition on condition that the transaction is not likely to result in the prevention or substantial lessening of competition, or endanger the continuity of the services offered in the distribution of branded consumer electronics to resellers.
Although the authority has set out conditions to prevent any possible competition concerns that may arise from the acquisition, this seems to have not gone down well with Sefalana. CA director communications and advocacy, Gideon Nkala confirmed that Sefalana has registered their displeasure with the authority. He however noted that the authority is satisfied with the conditions imposed, adding that all the concerns were adequately addressed. “We are grateful that other competitors in this matter assisted us in making a determination and the conditions were imposed based on the contributions of the concerned parties,” Nkala said.
He further indicated that the authority will treat the displeasure of Sefalana with the seriousness it deserves and promised that they will be monitoring to ensure compliance.
The CA’s decision allows Ottapathu to acquire through his company, Bluehearts the entire issued shareholding of Warbler Holdings, together with all assets related to their business operations.
Warbler is a holding company for four firms, IT4 Africa, Goldtech Enterprises, Healthwest Africa, and Solid Logistics.
Goldtech Holdings and Healthwest are suppliers to Sefalana and Furnmart with the former distributing home and kitchen appliances, personal grooming products and consumer electronics under the brand names of Samsung, Kenwood, Wahl and Sinotec.
On the other hand, Healthwest Africa supplies Sefalana with home appliances, consumer electronics and personal grooming and kitchen appliances under the brand name of Hisense and Philips.
According to the conditions, Choppies is barred from entering the branded consumer electronics goods market for five years while Ottapathu has been ordered to divest from five of his private companies. It is not the first time that the two largest retail supermarkets were entangled in a turf war. Three years ago, the two competitors locked horns when Choppies acquired the Supa Save supermarkets. The acquisition was later approved by the authority on the basis that it was not anti-competition.
Over the past few years, the two giants have been competing to become the market leader.
A further attempt by Sefalana to stop the acquisition of Supa Save through the High Court was later withdrawn.