After more than two years of legal wrangling about the R515m merger of Distillers Corporation and Stellenbosch Farmers’ Winery to form Distell, there is now no doubt that the merger will stay in place. There is, however, still uncertainty about what will happen to some of the brands.


One of the most lucrative sections of Distell’s immense portfolio of products has been ruled as “likely to cause a substantial lessening of competition”, by the Competition Board in Pretoria late yesterday.

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It is in spirits category, which includes brandy, whisky, gin, vodka and canes brands that the company still has to establish its fate.


The Tribunal said this segment includes some of South Africa’s – and the world’s best-known brands. It found that Distell enjoyed a significant share of that segment of the market and barriers to entry were extremely high.


A further hearing – with a date yet to be determined – would be convened to determine “an appropriate remedy,” the Tribunal said.


Any potential remedy imposed, whether behavioural or structural would be confined to that market in which the panel determined there was likely to be a substantial lessening of competition.

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Distell was fairly upbeat about the findings today – especially the fact that the actual merger was safe.


Corporate affairs director, André Steyn, said it was also significant that the Tribunal had moved away from the Commission’s findings about specific product categories to the broader proprietor, or medium class category of products.


He said this was extremely broad and it was not clear from the findings exactly where the Tribunal was going in regard to the remedial steps to be taken.


“We will only know that when we get to the next round,” Steyn said.