The commission noted during a stakeholders meeting on Friday that Innscor gradually increased its shareholding in NatFoods but failed to notify the relevant authorities, in particular CTC, of the process. Innscor is said to have only given notification of the acquisition when investigations into the move had already started.
Innscor acquired a 36 percent stake in NatFoods in 2003 and increased it to 49,9 percent in 2011 but later sold around 11percent in 2012 to Tiger Brands leaving it with 37,82 percent. CTC only received notification of the transactions in 2012.
CTC chairman, Dumisani Sibanda, said as there had been no notification of the acquisition, the commission was bound to penalize Innscor. Innscor, which has stakes in a dozen renowned companies under its ambit, is accused of suffocating businesses out of the food industry. The CTC probe was triggered by a plethora of complaints lodged by affected companies and observations by the CTC itself.
Joel Katsande from Vic Foods said Innscor should have declared upfront its intentions to acquire NatFoods and given peers the opportunity to give representation as was the norm elsewhere. The Consumer Council of Zimbabwe said the acquisition and the dominance of the Innscor group as a whole had affected freedom of choice. CTC vice chairperson, Varaidzo Zifudzi, clarified to the companies that being a dominant player was not unlawful but what was not permissible according to the Act was the abuse of that dominance through price manipulation. Innscor said they were not in a position to respond as submissions made related to restrictive practices and not on the acquisition. The hearing was postponed for 21 days to allow Innscor to prepare their submissions.
Post published in: News