Tobacco Companies do Battle

Source from:  June 19 2008 iol.co.za By Mogomotsi Magome 06/20/2008

Two tobacco companies are battling it out at Competition Commission Tribunal hearings. At issue is access to retail channels. The tribunal's ruling is likely to affect the cigarette brands that are immediately visible to consumers at retail outlets. Japan Tobacco International South Africa (JTISA) has accused British American Tobacco South Africa (Batsa) of being involved in conduct aimed at denying its competitors access to various retail channels. These include hotels, restaurants and cafes. JTISA manufactures brands that include Winston, Camel and Benson & Hedges. Batsa's flagship brands include Peter Stuyvesant, Dunhill and Kent. JTISA lodged a complaint with the Competition Commission in 2003, saying Batsa was the dominant cigarette manufacturer in the country. JTISA said Batsa, through its "trade investment arrangements", offered incentives to retailers to market and sell its brands, irrespective of the price and/or quality advantages offered by competitor brands. In terms of these arrangements, Batsa allegedly secured preferential or exclusive visibility at points of sale. JTISA said this was an unfair advantage, as retail outlets were one of JTISA's major routes to market its cigarette brands. Batsa denied the accusations, saying it conducted all aspects of its business in line with the country's competition laws. It argued that it wasn't a monopoly. Batsa said the trade investment agreements weren't meant to disadvantage competitors, but rather to complement the retailers' marketing. JTISA has already given evidence and the hearings will continue tomorrow, when some of Batsa's last witnesses are expected to give evidence. These include representatives of Shoprite Checkers and Pick 'n Pay. Enditem