SOUTH AFRICA: The Distell Tribunal hearing begins
The Tribunal has set aside three days with an option for a fourth for the hearing in the saga which has been dragging on for nearly two years. Distell argued the need to close the hearings because all its marketing strategies and brand plans, which reflected its total philosophy, would be bared.
Various parties from trade unions to competitors are expected to give testimony.
Distell flew in international business analyst, John Forsyth of McKinsey in the US to give expert testimony on brand price trade-offs after local analysts were not able to provide the necessary specialist information.
Distell MD, Jan Scannel then started his evidence in chief, which was expected to continue today. Legal experts from the Tribunal indicated that he would then be cross-examined “at length”.
The Tribunal hearing emanates from the merging of Distillers Corporation and Stellenbosch Farmers’ Winery, which was announced in September 2000.
The Tribunal’s present sitting follows a decision by its first hearing last year and ab upheld appeal by the Competition Appeal Court on 27 November 2001, that the merger constituted a notifiable major transaction.
Following the Appeal Court decision, Distell duly notified the transaction to the Competition Commission, which conducted an investigation and recommended conditional approval for the merger. These conditions included the termination by Distell of the manufacturing and or distribution of all KWV brandy brands and a number of disposals in the brandy and sparkling wine sector.
Distell is opposing the recommendations made by the Commission and instead seeks unconditional approval of the merger.
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