Commission welcomes agreement to halt exclusive leases by Shoprite Checkers

A report from a grocery retail market inquiry by the commission found that long-term exclusive lease agreements were widely prevalent in the grocery retail sectors and harmed the choices available to customers who buy from shopping centres.

Competition Commission commissioner Thembinkosi Bonakele. Picture: @CompComSA/Twitter.

JOHANNESBURG - The Competition Commission on Monday welcomed confirmation by the Competition Tribunal of an agreement that would end exclusivity clauses in various lease agreements by Shoprite Checkers against small, medium and micro enterprises (SMMEs) and specialist stores.

A report from a grocery retail market inquiry by the commission found that long-term exclusive lease agreements were widely prevalent in the grocery retail sectors and harmed the choices available to customers who buy from shopping centres.

The commission said exclusivity against other supermarkets would stop immediately in non-urban areas and would be phased out over five years in urban areas.

“The confirmation of this consent agreement marks a significant milestone in the enforcement efforts of the commission following 12 years since the initiation of the first broad investigation against exclusive lease agreements by the national supermarket chains.

“More importantly, this agreement ushers in a new era in the South African grocery retailing environment as it opens up access for SMEs and other retailers in more than 1,000 locations across the country in which Shoprite Checkers has exclusivity,” said the commission’s spokesperson Siyabulela Makunga in a statement.

Competition Commissioner Tembinkosi Bonakele said the decision by the tribunal was an important step towards the rebuilding of the local economy following the devastating impact of the coronavirus pandemic, particularly on SMEs.

“The opening of space in shopping centres as a result of this historic agreement also provides an opportunity for new businesses to emerge in the South African retailing environment and this is crucial in providing consumers with product choice and alternative places to shop for grocery products,” he said.

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