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Tribunal furnished with info
on SABMiller takeover
A
lthough Anheuser-Busch (AB) InBev has obtained the
Competition Tribunal’s approval of its R1,5 trillion take-
over of SABMiller on 30 Junie 2016, the approval is subject
to far reaching conditions designed to address both public
interest and competition concerns arising from the merger.
According to a public statement by the Tribunal there had to be
supply conditions of input suppliers, particularly in respect of bar-
ley producers. Barley producers are concerned about whether an
existing industry pricing mechanism will change post-merger given
the international sourcing power ABI brings to SAB.
During the time of the hearing in June, Grain SA submitted sup-
porting information with regards to the proposed merger between
Anheuser-Busch InBev SA/NV and SABMiller Plc on request of the
Competition Tribunal.
As representative organisation of barley and maize producers
who are suppliers to SABMiller, the organisation declared interest
in the merger case since SAB is the sole buyer of malt barley in
South Africa. The malt barley industry is currently in a monopoly
market state, which means that a small adjustment by the single
buyer can change the whole industry. With the merger, the risk of
importing barley is increasing since there is better access to already
structured foreign markets established by Anheuser-Busch InBev.
Anheuser-Busch InBev is also well known for establishing its own
production of malt barley. This means that the local production
can be under additional pressure and risk. South Africa produced
332 000 tons of barley in 2015.
Grain SA proposed the following remedies to the Tribunal:
Commercial contracting
Grain SA proposed that the Competition Tribunal consider to add
to the conditions that the current contracting practises to ensure
the procurement of local barley be maintained for at least another
three years.
Farmer development
Grain SA proposed that the Competition Tribunal consider to add
to the conditions regarding farmer development to allow Grain SA
to represent those farmers they intend to develop or alternatively
that it be done in a more structured and inclusive way such as a
Trust.
GRAIN SA
JOHAN SMIT,
managing editor:
SA Graan/Grain