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SABMiller’s South Africa Unit Contests Competition Allegations

SABMiller Plc (SAB), the world’s second-largest brewer, will continue to contest allegations by South Africa’s Competition Commission relating to distribution systems and pricing at its South African unit, the company said today.

“We remain confident that none of our practices are in breach of the law and that we have not engaged in any anti-competitive behaviour,” Yolanda Cuba, SAB strategy director, said in an e-mailed response to questions.

The case being heard by the country’s Competition Tribunal is the result of an investigation between 2004 and 2007 after a complaint by a wholesaler who said that South African Breweries charged him the same price it charged retailers, preventing him from “earning a fair margin” on his sales to retailers, the company said. The Competition Commission’s investigations resulted in allegations of resale price maintenance, price discrimination and an abuse of dominance.

The antitrust authority wants discounts offered to SAB’s own appointed liquor distributors extended to all liquor distributors, Johannesburg-based newspaper Business Day reported today. Extending discounts to independent distributors would cost the company 729 million rand ($75 million) a year, the newspaper said, citing David Unterhalter, counsel for the company. Unterhalter and Competition Commission spokeswoman Keitumetse Letebele didn’t immediately respond to requests for comment.

SABMiller, which started selling beer to South African gold prospectors in 1895, applied to have the case dismissed in 2011.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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