Shoprite stops Massmart selling certain competing products - for now

by , 22 October 2013

Last week, Shoprite filed an interdict with the Western Cape High Court to stop Massmart selling competing food items at the Cape Gate centre. Shoprite filed the claim based on an exclusivity clause in its lease contract. The court has now awarded an interdict to Shoprite. Let's take a closer look at what's going on...

Today, the Western Cape High Court found “that the exclusivity clause in Shoprite's Cape Gate lease contract protects Shoprite from competition,” reports Fin24. This means that Massmart, under its Game store, cannot sell “certain perishable goods” at the shopping centre.

Brian Leroni, the head of corporate affairs at Massmart said that “Massmart intends to appeal the ruling,” says IOL. When Shoprite filed the case with the court last week, Massmart said that it was also referring the claim by Shoprite to the Competition Commission.

Shoprite's legal move against Massmart was “based on an exclusivity agreement with Cape Gate landlord Hyprop Investments,” reports BDLive. The agreement in the lease says that Shoprite is the “sole supermarket, grocery store and liquor store, bar Pick n Pay and Woolworths”.

Is the consumer the one who will lose out over this ruling?

After today's ruling, Massmart says that it is the consumer who will lose out, says Fin24. This will deny consumers the “benefit of a free and fair competitive trading environment”.

In response to the statement from Massmart, the CEO of Shoprite, Whitney Basson told Fin24 that consumers are not losing out. The consumer has the choice of Woolworths and Pick n Pay to shop at too.

Mr Basson added that “Shoprite Checkers had the cheapest prices in the local supermarket industry,” notes BDLive. And regardless of exclusivity agreements, the prices charged were the same across the board.

Time will tell if Massmart is successful in its appeal and its claim with the Competition Commission.

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