Two of the largest companies in the ostrich industry are heading to the Competition Tribunal in a bid to have a decision by the Competition Commission – to prohibit their merger – overturned.
The Commission earlier prohibited the merger between Mosstrich and Klein Karoo International, the Competition Tribunal said in a statement on Monday. According to the Tribunal, the Commission found that the merger would result in a "near monopoly" in the market for ostrich meat and feathers.
The Commission also found that the merger was "aimed at eliminating competition between the two companies" and that they would "control the entire value chain of the ostrich industry" if the merger were approved.
The companies, however, argue that the proposed transaction is an attempt to stabilise the ostrich industry, which is in a state of decline, adding that there is no incentive for them to exploit the local market.
They also argue that the proposed merger will aid the survival of the industry and create jobs.
The Tribunal will hear evidence from various witnesses this week including the two companies, competitors and farmers, retailers and economic experts. Final arguments will be heard on Monday, July 8.