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Wal-Mart’s Massmart Challenges Shoprite Court Case in Food Fight

Massmart Holdings Ltd. (MSM), the South African food and goods wholesaler owned by Wal-Mart Stores Inc. (WMT), asked the antitrust regulator to investigate Shoprite Holdings Ltd. (SHP)’s efforts to block an expansion of its product line.

Shoprite, South Africa’s largest retailer, filed a court order earlier this month in an attempt to prevent Massmart from selling fresh food or liquor at its Game stores in the Cape Gate mall in Cape Town, invoking an exclusivity clause in its lease agreement. Massmart said today it had referred Shoprite’s claim to the Competition Commission.

“It appears that the interdict represents an attempt to stifle legitimate competition by Game and is, by implication, prejudicial to South African consumers,” Massmart Chief Executive Officer Grant Pattison said in an e-mailed statement. “The Competition Commission, during its 2011 probe into the supermarket industry, identified exclusivity clauses as unjustified and resulting in anticompetitive outcomes.”

South African retailers have been battling slower profit growth and increased competition to grab shrinking consumer disposable incomes. Massmart said Aug. 22 that it will focus on introducing new lines in its fresh-food, clothing and e-commerce units as ways to drive growth.

Shoprite will “lose sales and suffer financial loss if Game is permitted to trade as a general supermarket and grocery store, as well as a liquor store, at the center,” Shoprite said in its application to the Western Cape High Court. Shoprite declined to comment further, according to Sarita van Wyk, a spokeswoman for the Cape Town-based company.

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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