Supermarkets that are privately owned and controlled by historically disadvantaged persons can immediately access letting space in all shopping centres where a Pick n Pay store has exclusivity provisions in its lease agreement.
This is according to the Competition Tribunal, which confirmed an earlier agreement between the Competition Commission and Pick Pay on Friday, 11 June.
The competition authorities have objected against the large supermarket giants’ practice of concluding agreements with mall owners that ban competitors from the malls. These contracts sometimes span up to 25 years. This meant that not only other supermarkets, but also small food providers such as bakers and butchers were not allowed to trade.
Last year, Shoprite agreed with the tribunal that it would also immediately allow small businesses to set up shop in malls where it had exclusivity agreements. Also, in non-urban areas, it agreed that other supermarkets could start trading alongside its stores.
Pick n Pay will only allow black-owned supermarkets – but in all its malls, including in urban areas.
“The … supermarkets can be single or multiple store operations as long as they are privately owned and controlled by historically disadvantaged persons, including individual franchisees or buyer group members of other national retail brands but excluding corporate stores of those brands,” the tribunal said.
Small or medium-sized businesses (as defined in the Competition Act) and speciality stores (including butcheries, bakeries, delicatessens, liquor stores and greengrocers, or stores that sell 15 or fewer product lines) can also immediately trade in shopping malls where it has exclusivity agreements.
Pick n Pay also agreed that it won’t have any exclusivity provisions in new lease agreements (as opposed to renewal agreements) – and all exclusivity provisions against other supermarkets contained in its existing leases cannot be enforced after 31 December 2026. The consent agreement also applies to Pick n Pay’s franchisees.