Massmart in consumers' interests

In May this year the competition commission recommended that the merger be prohibited. It said that allowing the transaction to go through would result in a “prevention or lessening of competition in the wholesale grocery market” in that region.

But Masscash, the Massmart subsidiary carrying out the transaction, successfully argued the deal would enhance, rather than detract from Finro's competitive offering. “Finro will be able to formulate an even more competitive offering in the Port Elizabeth market, for the benefit of independent traders and poorer consumers,” says Masscash divisional CE Robin Wright.

According to Masscash it could do this by taking advantage of processes and systems that are geared for high volume, low-margin trading. In addition Finro can benefit from the better prices that Masscash has negotiated from suppliers.

Source: Financial Mail

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