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THEE - The Competition Commission - Competition Commission prohibits knock and

Release Date: 07/12/2011 14:26
Code(s): JSE
Wrap Text

THEE - The Competition Commission - Competition Commission prohibits knock and drop distribution merger MEDIA RELEASE 07 December 2011 Competition Commission prohibits knock and drop distribution merger The Competition Commission has prohibited the acquisition of Primedia@Home, a printed advertisement distribution business of Primedia (Pty) Ltd, by Paarl Media (Proprietary) Limited ("Paarl"), jointly controlled by Media 24 Limited and Lambert Phillips Retief. The Commission found that this transaction would substantially lessen competition in the market for knock and drop leaflet distribution. This transaction was previously approved by the Commission on 25 January 2011; however, Caxton and CTP Publishers and Printers Ltd ("Caxton") asked the Competition Tribunal ("Tribunal") to review it. On 25 July 2011, the Tribunal set aside the Commission`s decision to unconditionally approve the merger and the matter was sent back to the Commission for its reconsideration. The new investigation uncovered further information, including strategy documents that were not previously submitted to the Commission by the merging parties. This information indicated that there was vigorous competition between the merging parties, being the two main national players in the market for knock and drop leaflet distribution. This is contrary to the arguments made by the merging parties that they competed in a broader market which included community newspapers and other media. The Commission`s investigation concluded that the merger will thus substantially lessen competition. The Commission further took into account that this market is highly concentrated with significant barriers to entry which makes it difficult to enter the knock and drop distribution market and be an effective competitor at a national level. Consideration of the ability of those in other distribution modes, like newspapers, to perform knock-and-drop distribution nationally indicates that this constraint is not significant and highly unlikely to materialise. In addition, the merged entity (through Paarl) has a leading position in printing, particularly heatset printing and will, by virtue of the transaction, be in a position to leverage its position in distribution into the printing market, and foreclose its rivals in printing and distribution, to the detriment of competition in these markets. ENDS For further details contact: Molebogeng Taunyane, Coordinator: External Communication 012 394 3289/082 646 8663/ molebogengt@compcom.co.za Date: 07/12/2011 14:26:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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