The Namibian Competition Commission (NaCC), and Choppies Supermarket Namibia (Pty) Ltd (Choppies) entered into a N$2.2 million settlement agreement following the Commission’s investigation which found that Choppies have contravened Chapter 4 of the Competition Act 2 of 2003, for implementing a merger without the approval of the Commission.
The transaction amounted to a merger in contravention of the Act, and without the prior approval of the Commission.
The Commission’s investigation found that Choppies contravened Section 44 read with Sections 51 and 53 of the Competition Act. Choppies and Mr Johannes Jacobus De Jager trading as Grootfontein Supermarket and Grootfontein Bottle Store, entered into a memorandum of agreement on 12 May 2022 and 19 May 2022, and which agreement constituted an acquisition for purposes of the Competition Act.
The acquisition by Choppies constituted a change of control in Grootfontein Supermarket and Grootfontein Bottle Store, as it resulted in a merger as defined in terms of Sections 42(1) and (2) of Chapter 4 of the Competition Act. The merger falls within the prescribed notification thresholds, and the parties failed to notify the Commission, as required in terms of Section 44 of the Act.
“As a result of the Commission’s investigation, the Commission and Choppies agreed to settle the matter and entered into a settlement agreement, wherein they would pay a pecuniary penalty in the amount of N$2 200 000.00 and implement a compliance programme on Competition law in Namibia. To that end, the settlement agreement entered between Choppies and the Commission was made an order of Court in the High Court on 19 November 2024, in the matter of, NAMIBIAN COMPETITION COMMISSION vs CHOPPIES SUPERMARKET NAMIBIA (PTY) LTD, under High Court case number: HC-MD-CIV-MOT-GEN-2024/00561,” the Commission said in a statement.
The parties to the merger operate in the Commission’s defined market of fast moving consumer goods. This entails the selling of goods to consumers, that generally have a short shelf life, in relatively small quantities for use or consumption rather than the resale. In its investigation the Commission found that, although the transaction did not have a negative impact on competition – due to the existing market concentration in the town of Grootfontein at the time of the transaction, the transaction nonetheless breached the notification thresholds made pursuant to the Competition Act.
It is, however, important to note that, the investigation by the Commission informing the fine emanates from the Commission’s mandate that results in providing consumers with competitive prices and product choices – that develops the Namibian economy.
“As mentioned, the parties operate within the market of fast moving consumer goods, and as such, the economic and commercial activities have a day-to-day bearing on every person within Namibia. The products in this market include the staples of our daily lives, such as: food, beverages, toiletries, over-the-counter medicines, and cleaning products. Investigations by the Commission for mergers implemented without prior approval are thus not a mere punitive exercise, but a realization of the Commission’s mandate to ensure fair market competition for inclusive growth and development. For this reason, it is thus imperative that all mergers above the monetary thresholds are notified to the Commission, to ensure the protection of consumer rights, opportunities, and the general welfare of the competitive landscape. The determination, fit for the Commission, can best be determined during the consideration of a merger notification, before any possible anti-competitive effect realizes in the market after a transaction which may not have been notified to the Commission,” the Commission said.