REGULATORY REVOKE: Competition Commission calls for Premier Group’s R6.5bn Rhodes merger to be canned
Premier Group maintains its compliance in the face of a Competition Commission objection that could cost it billions.
The Competition Commission has lodged an objection, seeking to revoke the approval granted to Premier Group's merger with Rhodes Foods Group. Based on the current figures, this could result in a fine of nearly R2.1 billion for Premier Group. The controversy stems from discussions that occurred before the merger, involving the closure of a fruit-canning plant in Tulbagh.
Initially, both companies claimed they had no plans to shut down the plant, but an investigation revealed they had explored options. Premier Group maintains it did not violate any rules, citing a global decline in demand for canned fruit as the reason for the closure. However, the Competition Commission and labor unions argue that the company's failure to disclose the plant's closure plans before approval contravenes the duty of full disclosure.
The merger, completed in March, is expected to increase Premier Group's revenue by 35-45%. The company plans to proceed with repurposing the Tulbagh site and selling processing machinery to competitor Langeberg Foods.
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