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ZAMBIA company is that of mixed commercial farming, i.e., agricultural production and processing of agricultural produce but not limited to wheat, maize, soya milling and baking. The parties have submitted that Mount Isabelle Limited is incorporated in Zambia under the Companies Act Cap Thabo Mbeki Road in Lusaka while their business address is at Farm No. 923 in Mkushi. The principal activity of the company is that of manufacturing and mixed commercial farming. On the basis of this formal application, the Commission instituted investigations under Section 25 of the Competition and Consumer Protection Act, No. 24 of the Laws of Zambia (‘the Act’) to establish the facts surrounding the Statutory Instrument No. 46 of 2006 the parties made payment equivalent to Zambian Kwacha [ ]. Interim Authorization The Technical Committee at their 34th Meeting held on the 25th July 2011, granted an Interim Authorization Cena Farms Limited and Mount Isabelle Limited because the preliminary market inquiry showed that the proposed transaction would not likely prevent, restrict or distort competition to an appreciable extent in the relevant product market and that it was unlikely to have a detriment effect on the economy of Zambia in general. Market Inquiries market survey that was conducted and other primary data researched from the internet and other literature readings. In addition, the Commission wrote to third parties in accordance with Section 29 of the Act requesting for their comments regarding the proposed transaction. Relevant Market products overlapped: (i) Agricultural Production of Maize: It appears the relevant product market is the agricultural production of maize and food processing. (ii) Agricultural Production of Soya Beans: It appears the relevant product market is the agricultural production of soya beans and food processing. (iii) Agricultural Production of Wheat: It appears the relevant product market is the agricultural production of wheat and food processing. Market Concentration relevant market is largely fragmented with subsistence and commercial farmers nationwide who equally produce products such as maize, wheat and soya. The estimated market share of Cena Farms total agricultural production is less than 1 per cent and Mount Isabelle’s total agricultural production is less than 2 per cent. Therefore, the total production for both Cena Farms and Mount Isabelle post merger transaction is likely to be approximately 3 per cent of the total market. This market includes Therefore, the level of production that Cena Farms is likely to assume does not necessarily entrench its market position and the merger would not result into increased market concentration capable of raising competition concerns in the relevant product market. Import Competition The relevant product market has no import competition restrictions. However, it would still not make economic a bumper harvest. - 123 ZAMBIA
124 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE The relevant wheat product market has very little import competition because the Government through the Ministry of Agriculture and Cooperatives has imposed a ban on the importation of such commodity into the country. Barriers to Entry Barriers to entry are obstacles on the way of potential new entrants to enter the market and compete with the incumbents. Generally it would appear there are low barriers in the relevant maize and soya beans product markets as the sector continue to enjoy favourable treatment from the government through various incentives and also prevailing excellent soils, water availability, land, climate among others and Zambia continually attracts new entrants on the market, both commercial, small scale and subsistence farmers. It would appear there are high barriers in the relevant wheat product market as wheat grows in winter and requires specialized irrigation systems as needed during the winter season as the weather is dry in the country. Countervailing Power It is unlikely that Cena Farms would exercise any countervailing power on the maize market post merger because with approximately 3 per cent market share, it is unlikely to exert any market power over other producers post sources of alternative supply of maize and soya beans in the market. Removal of a Vigorous Competitor and pricing them keenly”. The proposed acquisition of assets belonging to Mount Isabelle by Cena Farms is not likely to pose a threat be- market. Most of the agricultural maize products that are produced are directly consumed up to the Zambian main market. Consideration of Dominance Evidence relied upon so far represents that Cena Farms has less than 1 per cent market share in the agricultural production while Mount Isabelle accounts for less than 2 per cent of the total agriculture production of which translates into combined production levels post merger transaction of 3 per cent market share. Therefore, the acquisition of assets of Mount Isabelle by Cena Farms is not likely to give Cena Farms a dominant position in the maize relevant product market. Abuse of Dominance general. Cena Farms has less than 1 per cent market share in the agricultural production while Mount Isabelle accounts for less than 2 per cent of the total production of which translates into combined production levels post merger transaction of 3 per cent market share. Therefore, the acquisition of assets of Mount Isabell by Cena Farms is not likely to give Cena Farms a dominant position that could possibly lead to abuse of market power in the relevant product market. The two undertakings in their respective product lines have <strong>report</strong>edly to be facing substantial competition from Therefore, the acquisition of assets of Mount Isabelle by Cena Farms is not likely to give Cena Farms a dominant position that could lead to abuse of market power in the relevant product market. Conclusions Substantial Lessening of Competition Generally, it would appear there are low barriers in the relevant product markets of soya beans and maize as the sector continues to enjoy favourable treatment from the government through various incentives and also prevailing excellent soils, water availability, land, climate, among others. There are high barriers in the relevant product market of wheat as wheat grows in winter and requires specialized irrigation systems as need during the winter season as
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UNITED NATIONS CONFERENCE ON TRADE
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UNITUNITED NATIONS CONFERENCE ON TR
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2 VOLUNTARY PEER REVIEW OF CLP: A T
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COMPARATIVE ASSESMENT COMPARATIVE A
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PREFACE This comparative assessment
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PREFACE pendence is maintained and
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ZIMBABWE This report is part of the
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ZIMBABWE With the growing political
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ZIMBABWE of restrictive practices,
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ZIMBABWE competition authorities do
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ZIMBABWE divided according to geogr
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ZIMBABWE The Commission in 2006 whi
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ZIMBABWE to take care of themselves
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ZIMBABWE (under Section 9); basical
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ZIMBABWE Full scale investigation i
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ZIMBABWE (ii) to produce any book,
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ZIMBABWE The fact that CTC has a co
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ZIMBABWE tariat of technocrats, who
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ZIMBABWE Table 2: Number of Competi
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ZIMBABWE Regarding the handling of
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ZIMBABWE (Emphasis by the author) b
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ZIMBABWE Section 5 (1) (f) that pro
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ZIMBABWE Whilst the arguments can b
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ZIMBABWE Anti competitive agreement
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ZIMBABWE by conducting its case det
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