Green light for merger of agri cooperatives

In a merger of agricultural cooperatives BKB and ECAC, Genesis was retained to conduct an in-depth competition analysis of the likely effects of the transaction.

In particular, the project team identified the areas of overlap between the stores operated by these two cooperatives.

Genesis also used financial and econometric analysis of pricing behaviour by agricultural trading stores to demonstrate that local agricultural stores are, in fact, constrained by stores in other towns and therefore do not have the power to raise prices, even though they may have a monopoly within a specific town.

The merger was approved by the Competition Commission subject to the condition that one of the parties divest of its trading outlet in Barkley East in the Eastern Cape.