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Ebrahim Patel. Picture: Matthew Brewer
The government and a major union could challenge a merger to create Africa’s largest bottling giant.
Economic Development Minister Ebrahim Patel this week got access to more documents related to the three firms involved in the continent’s biggest bottling merger.
This comes after the Competition Tribunal today granted him his request for access despite accusations related to Patel’s interference emerged during a hearing earlier this week.
Patel’s counsel, Jeremy Gauntlett, had argued during this week’s hearing that Patel’s department was not satisfied with the redacted documents handed to him last year regarding several decisions on the merger, which has raised concerns by the Competition Commission about possible consequences the merger may have on smaller beverage firms.
Today, the tribunal also granted the Food and Allied Workers Union (Fawu) permission to a litany of documents related to the merger involving Coca-Cola, SABMiller and the Gutsche Family Investments, but said some documents contained “confidential” information that could not be shared with the parties.
In a statement, the tribunal said: “An order has been issued regarding the request for documents by Minister Ebrahim Patel in the Coca-Cola matter, in which some documents have been granted and some turned down. Details of the [merger are] regarded [as] confidential because it contains sensitive information. Some information requested by the Fawu will also be supplied to the union.”
Fawu and the department expressed concern during the hearing about the effects the merger would have on suppliers, small companies, possible retrenchments, the possible dilution of black ownership in the supply chain and the effect on employment in the sector and on small companies by one dominant player.
The hearing was a precursor to the Competition Commission’s own hearing on the merger to be heard from May 9 to 27. The hearing will address concerns regarding competitors’ products on the merged companies’ coolers, retrenchments and owners of private delivery trucks.
Patel wanted the documents to prepare for next month’s hearing.
Mike van der Nest – senior counsel for Coca-Cola, SABMiller and the Gutsche family investments, who rejected Patel’s request for more documents relating to the merger – accused Patel during the hearing of “hijacking” the Competition Commission’s work and sharing sensitive information with Acacia Economics, which investigated the merger.
The Acacia preliminary report on the merger, which has not been shared with the merging companies despite requests to the commission, was a bone of contention during the hearing.
Van der Nest had intimated that Patel could not be trusted with sensitive information related to the deal and asked why Patel should be furnished with more documents when the department had been given information requested since April last year.
But at the end of this week’s hearing, representatives from the Competition Commission who were in attendance, asked Competition Tribunal chairperson Norman Manoim to disregard suggestions that Patel or the commission had done anything wrong during the review of the merger.
The merger would see the creation of the biggest bottling firm in the Southern hemisphere, Coca-Cola Beverages South Africa, while the second transaction is a branding transaction regarding the transfer of the ownership of Appletiser and Lecol brands from SABMiller to the Coca-Cola Company.
Fawu said it was wanted to satisfy itself that the 250 workers who had been identified for potential retrenchment, were not being thrown under the bus and demanded details of how the workers from four companies were identified for retrenchment.
The union said the merger could put more “job titles” on the block and was concerned that only low-skilled workers were being targeted for retrenchment.
The union also demanded that the new company “harmonise” working conditions and benefits for all workers.
Gauntlett said: “Our experts require the information to do their work on the merger. We want to see employment consequences and that is why we requested details of employees who may be retrenched.”
Patel had demanded details about the new company’s expansion strategy, whether it would potentially lock out small producers in coolers belonging to the Coca-Cola Beverages South Africa around the country and how it planned to maintain the status quo on the supply chain involving private smaller companies.
