The Competition Commission has asked the Competition Tribunal to revoke its approval of Premier Group’s roughly R6bn takeover of RFG Holdings. It alleges the food producer breached a no-retrenchment condition and withheld material information during the review.
The request centres on Premier’s plan to close RFG’s fruit-canning plant in Tulbagh, in the Western Cape, which employs about 424 people. The company disclosed the closure about four months after the tribunal cleared the deal. Commissioner Doris Tshepe said withholding material information from the regulators undermines the integrity of South Africa’s merger-control regime.
When the commission recommended approval in January, both companies undertook not to retrench any employees as a result of the merger for three years. Premier also committed to raise spending on enterprise and supplier development over the same period. Revocation by the tribunal is rare and would force the parties back through review.
| Tulbagh plant | Figure |
|---|---|
| Fruit processed a year | 55,000–60,000 tonnes |
| Fruit bought from growers | ~R300m a year |
| Annual exports | R1bn–R1.2bn |
| Share of output exported | ~90% |
| Commercial growers supplying | 200 |
| Orchards affected | ~2,000 ha |
| Factory jobs, permanent and seasonal | ~3,500 |
| Workers facing retrenchment | 424 (246 permanent, 178 fixed-term) |
The deal combined two of the country’s largest packaged-food groups, with combined annual revenue of about R30bn. Premier owns Blue Ribbon bread, Iwisa maize meal, Snowflake flour and Manhattan confectionery. RFG brought Rhodes Quality juices, Bull Brand canned meats, Magpie desserts and Squish baby foods. The merged group competes most directly with Tiger Brands. RFG was delisted from the JSE through the share swap.
Premier, led by chief executive Kobus Gertenbach, has described the closure as an operational and financial decision unrelated to the merger. It points to a sharp year-on-year fall in international demand for canned fruit. The commission argues that the plan and the information behind it should have been put before the regulators while the deal was under review.
The effects reach well beyond the factory. The Canning Fruit Producers’ Association said growers had already spent up to 60% of their seasonal production costs, with orchard investments estimated at R500m to R600m. Its chief executive, Jacques Jordaan, urged Premier to delay the closure and process the coming season’s crop. Hortgro’s stone fruit director, Charl Herbst, noted that orchards cannot simply be removed once processing capacity disappears.
The closure would also concentrate local canning capacity. Langeberg Foods, the main remaining canner, was given about a week to consider buying the plant. Its chief executive, Edwin Kriel, said that was not enough time for due diligence or to raise the funding and working capital needed before the season.
Labour opposition has hardened. Talks at the Commission for Conciliation, Mediation and Arbitration broke down in late August. The Agricultural, Food and Allied Democratic Workers’ Union and Cosatu sought a one-year suspension of the closure to explore alternatives. The Southern African Clothing and Textile Workers’ Union lodged the complaint that prompted the commission’s investigation, which began in August.
The tribunal will now hear the commission’s application. If approval is revoked, the parties could face renewed conditions, penalties or an order to unwind parts of the transaction. The commission also argues that the case will test whether merger undertakings remain enforceable once a deal has closed. The next apricot season, which feeds the Tulbagh plant, begins in November.