Choppies slapped with N$2.2 million for unapproved partnership

Choppies Supermarket Namibia has to cough up N$2.2 million for implementing a merger without the approval of the Namibian Competition Commission (NaCC).

NaCC spokesperson Dina //Gowases says an investigation by the commission showed that Choppies entered into an agreement with Johannes Jacobus de Jager, acquiring Grootfontein Supermarket and Grootfontein Bottle Store.

This transaction constituted a merger, as defined by the Competition Act, and was subject to mandatory notification to the NaCC.

“The commission’s investigation found that Choppies entered into a memorandum of agreement on 12 and 19 May 2022. This agreement constituted an acquisition for purposes of the Competition Act,” //Gowases says.

However, Choppies failed to comply with this requirement.

“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,” she says.

Moreover, Choppies has been requested to implement a compliance programme on competition law in Namibia.

//Gowases highlights the importance of merger regulations in safeguarding consumer interests and promoting economic growth.

She says although the Choppies transaction did not have a significant negative impact on competition at Grootfontein, the failure to notify the merger highlights the need for strict adherence to the Competition Act.

“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, it nonetheless breached the notification thresholds made pursuant to the Competition Act,” //Gowases says.

She says the Competition Act is designed to protect consumers by ensuring fair competition and preventing anti-competitive practice.

“By enforcing the notification requirements for mergers, we aim to prevent market dominance and ensure that consumers have access to a wide range of products at competitive prices. This has the benefit of protecting consumers from potential abuses.”