Cabinet has welcomed the agreement on public interest conditions for the Coca-Cola merger, which will support efforts for greater industrialisation in the South African economy.
The Coca-Cola Beverages Africa (CCBA) merger parties – SABMiller plc, The Coca-Cola Company and Port Elizabeth based Gutsche Family Investments – this week received approval from the South African Competition Tribunal, with agreed conditions, to form Africa’s largest soft-drink beverage operation.
The tribunal’s approval of the merger follows agreements reached between the merger parties and the South African government, unions and the Competition Commission.
“Cabinet notes the approval of the merger of three bottling plants to form the continent’s largest bottling plant, Coca-Cola Beverages Africa (CCBA).
“Cabinet welcomes the agreement on public interest conditions for the merger… The agreement safeguards aggregate employment levels in the company for a period of three years, protects workers in the bargaining unit from merger-related retrenchments, supports localisation of the supply chain and commits to develop historically disadvantaged farmers and suppliers to the company.
“Furthermore, R400 million has been committed to fund enterprise development in the agricultural value chain and another R400 million incremental investment to develop downstream distribution and retail capabilities with associated skills development and training. The iconic Appletiser brand will continue to be produced in South Africa,” said Acting Minister in The Presidency for Planning, Monitoring and Evaluation, Nosiviwe Mapisa-Nqakula, while chairing the post Cabinet briefing in Cape Town, on Thursday.
The agreement opens fridge space in coolers owned or supplied by Coca-Cola to smaller retailers. Ten percent of fridge space will be available to rival products from smaller producers in retail establishments where only Coca-Cola supplied coolers are available.
This opens the market to new entrants and small bottlers, helping to avoid restrictive business practices that keep small and medium-sized businesses out of markets.
The company’s long term investment in the country’s economic and social development will be enhanced through the establishment of the merged entity’s headquarters in South Africa.
The agreement follows a recent similar agreement entered into with Anheuser-Busch InBev relating to the purchase of SAB Miller. Minister Mapisa-Nqakula said the emphasis on employment, localisation and small business development in these agreements show “the importance of balancing corporate mergers with public interest issues and they set a standard for companies contemplating similar mergers or acquisitions”.
Mpact botte plant
Cabinet also noted the launch of the Mpact Polymers R350 million bottle-to-bottle plant in partnership with Coca-Cola.
“This initiative is in response to government’s legal framework working through the Environmental Affairs’ National Waste Management Strategy goal to promote recycling enterprises,” said Minister Mapisa-Nqakula.
The plant is a first of its kind on the African continent, diverting 29 000 tonnes polyethylene terephthalate (PET) waste bottles with an estimated saving of 186 000 cubic metres of landfill space. This will contribute to a reduction of carbon dioxide (CO2) emissions of approximately 53 000 tonnes per annum.
The Industrial Development Corporation (IDC) provided a R210 million loan facility as well as R30 million for its 21% equity stake and the Department of Trade and Industry granted a section 12(I) tax incentive.
The recycling plant provides jobs to 80 employees and 1 000 jobs to waste collectors.
The Minister said partnerships like this are an important engine for economic growth, creating thousands of jobs in the recycling economy that is worth about R50 billion.
Currently, plastic recycling alone provides income opportunities for more than 60 000 waste pickers.
The Mpact Polymers plant complies with EU food safety specifications, which also meets Coca-Cola’s full certification protocol for PET bottles. – SAnews.gov.za
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