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British American Tobacco may buy Twisp, says South Africa

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Christian Fernsby ▼ | August 16, 2019
The Competition Tribunal in South Africa conditionally approved the acquisition of South African e-cigarette seller Twisp by British American Tobacco (BAT).
British American Tobacco
Merger   British American Tobacco
The approval of the transaction is subject to a range of competition and employment conditions.

Topics: British American Tobacco buy

All retailers selling RRP products including large grocery retailers (such as Massmart, Pick ‘n Pay, Shoprite and Spar), branded service station forecourts (such as BP, Caltex, Engen, Sasol, Shell and Total) and owners or administrators of shopping malls should take note of the imposed competition conditions.

RRP products are products that have (the potential to present) less risk of harm to smokers than traditional cigarettes and include vaping products (such as e-cigarettes) and heat-not-burn tobacco products.

These stipulate that the merging parties shall not enter into agreements or arrangements with:

owners or administrators of retail spaces, requiring or incentivising them not to rent retail space for the sale of any RRP products to the merging parties’ competitors;

retailers (grocery or liquor chains, pharmacies, convenience stores, service station forecourts, speciality tobacconists and specialist RRP kiosks or stores), requiring or incentivising them not to sell any RRP products of the merging parties’ competitors;

retailers, requiring or incentivising them to allocate to the merging parties more than 70% of the visible space allocated to RRPs.

Further conditions stipulate that the merging parties must not require or incentivise retailers to prohibit the merging parties’ competitors from:

selling, displaying and/or promoting RRPs;

being allocated shelf space for RRP products;

bidding for or acquiring RRP slots i.e. periods of time during which point of sale material (such as cash mats, till clips, counter display units, etc.) can be displayed in retailers’ points of sale; and

displaying communication, promotional, marketing or advertising material in relation to RRPs.

Further, the merging parties may not require or incentivise retailers (i) not to exercise their own discretion in the allocation of visible space for RRPs; and (ii) to prohibit or discourage employees from providing assistance and/or information to customers relating to RRPs manufactured or supplied by the merging parties’ competitors.

A further imposed condition relates to the prevention of linking the supply of traditional cigarettes by the merging parties to the supply of RRPs.

The competition conditions will be applicable for a period of five (5) years.