![]() ![]() ![]() In late 20 the Commission received several complaints related to exclusivity clauses against Pick ‘n Pay, Massmart, Shoprite Checkers, and Spar and notably one of the complainants was the South African Property Owners Association.Īt present, the position in respect of findings by the Competition Commission is that exclusivity agreements, while problematic and concerning, are not wrongful in terms of the provisions of the Competition Act. It was noted by the Commission that despite the non – referral there were still concerns regarding long term operating exclusivity clauses as contained in leases over 20 years. The Commission was of the preliminary view that exclusivity clauses give rise to considerable competitive concerns but did not amount to a breach of the provisions of the Competition Act as many complaints were received from, among others, Fruit and Veg City and Aquarella Investments 437 (Pty) Ltd t/a Mamas.Īt the close of the investigation, the Commission decided not to refer the complaints as the evidence gathered would not support a substantial lessening of competition because of exclusivity clauses in lease agreements. The impact on the remaining tenant mix is that they will not be allowed to trade in some of their services and have a limited offering in that shopping centre so that the landlord can give effect to the anchor tenant’s exclusivity.Īre these exclusivities anti-competitive?Įxclusivity clauses in long terms leases have been considered problematic, and in 2009 the Competition Commission launched an investigation into major supermarket chains including Pick ‘n Pay, Shoprite Checkers, Woolworths, Massmart, and others. The anchor tenant, often large grocery retailers, is now in a power position to negotiate a long term trading exclusivity which the landlord will impose on other tenants in the shopping centre. Armed with sufficient information the terms of the contract are negotiable to the degree that the transaction makes commercial sense to the landlord and tenant.During planned development of a shopping centre, the banks would only advance finance for the development once a large food retailer has been secured as the anchor tenant for at least the loan term, generally 10 or 15 years. It is a common belief that Landlords dictate the terms of the lease to tenants, but this is not the case. We will unpack how these exclusivities will impact trade in a shopping centre. ![]() The anchor tenants often require landlords to grant them certain exclusivities to trade in a particular way in the shopping centre. Larger retailers have an interest in securing their positions as anchor tenants and are the draw cards to a shopping centre. It informs whether the intended target market is a consumer at the particular centre and what the return on investment is likely to be. The Plaintiff therefore went to court claiming that contrary to its exclusive distributorship of the Products, the Defendants were distributing the Products bearing similar marks or confusingly similar in get up to the trademarks owned by the Company in various outlets in Kenya without authority which was an infringement to its exclusive rights over the Products in Kenya thus prejudicing its interests and causing it to suffer loss and decline in sales.Shopping centres are an integral part of the South African landscape with customers and retailers thriving in a one-stop convenience and experience location.Tenant mix is vital to any potential retailer who considers letting space in a shopping centre. The Plaintiff claimed that Ripples Pharmaceuticals Limited and Metro Pharmaceuticals Limited (‘the Defendants’) were initially dealing with the Products but that their services were terminated by the Company. On 23rd May 2013, Vitabiotics Limited (‘the Company’) situated in England appointed Harleys Limited (‘the Plaintiff’) as the exclusive agent, importer and distributor of vitabiotics products (‘the Products’) for a period of twenty four (24) months. ![]()
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