a tripartite report - Unctad

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the weather is dry in the country. It is evident that the relevant product market has recorded new entrants in the
market with respect to commercial farmers.
However, the relevant product markets have recorded numerous entrants with respect to farming and that farming
is one of the most widely performed activities in Zambia and it continually attracts new entrants on the market, both
commercial, small scale and subsistence farmers. The proposed acquisition of assets of Mount Isabelle by Cena
Farms is not likely to pose a threat to result in exit of other competitors to the undertaking in the relevant product
Consideration of Dominant Position
Competition and Consumer Protection Act, No. 24 of 2010 that states that “a dominant position exists in relation
to the supply of goods or services in Zambia, if thirty (30) per cent or more of those goods or services are supplied
or acquired by one enterprise”. Cena Farms currently holds less than 30 per cent in the relevant product markets.
Consideration of Abuse of Dominant Position of Market Power
In the current case the threat for abuse in the relevant product market arising from this transaction is not likely
because of the perceived low barriers to entry and having experienced recently numerous entrants attracted by
government incentives and favourable climate and soil, among others. Therefore, the potential for abuse of market
power by Cena Farms in the relevant product market is not likely to lead to abuse of market power which can only
be done and sustained by a dominant undertaking.
Consideration of Third Party Views
The third parties that submitted their comments regarding the proposed merger between Cena Farms and Mount
Isabelle supported the transaction based on reasons that it is not likely to adversely affect competition and also accent
public interest issues that would likely to accrue from the transaction through additional jobs at the farms. This
is so because the third parties felt that if the merger was sanctioned it would lead to increased competition in the
market due to increased productivity, resulting into improved quality of services being provided to the consumers.
two parties are in the same line of business, therefore, most employees were likely to be retained.
Recommendations
Given the foregoing analysis and conclusions, the Technical Committee of the Board of Commissioners recommends
to the Board of Commissioners that unconditional authorization be granted to the parties because preliminary
investigations and assessment have revealed that the transaction would not raise any competition concerns
that may lead to substantial lessening of competition or abuse of dominant position of market power in the
economy of Zambia.
Source: Staff Paper Report on Proposed Merger between Cena Farms Zambia Limited and Mount Isabelle Limited, CCPC.
The Commission’s examination of the above Cena
Farms Zambia Limited/ Mount Isabelle Limited
merger, which the Board of Commissioners unconditionally
authorized, shows that the examination
was based on the merger control provisions
of the Act, including economic analysis, and that
the substantive test for assessing mergers as provided
for in the Act was applied. The examination
was also based on stakeholder consultations. It is
however noted that the Technical Committee of
the Board of Commissioners granted an interim
authorization of the transaction “because the
preliminary market enquiry 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 un-
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likely to have a detriment effect on the economy
of Zambia in general”. The Act does not provide
for interim authorizations of mergers. 147 In the case
of the Cena Farms Zambia Limited/ Mount Isabelle
Limited merger, tively
been authorized on the recommendation of
meeting of the Board of Commissioners, if it was
of an urgent matter, since it raised no serious competition
concerns.
The stakeholders that were interviewed during the
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under the new Act. Sentiments expressed in that
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