Ster Kinekor, Nu Metro to face collusion hearing

 ·8 May 2017
Ster Kinekor

A hearing is set to begin on Monday, 8 May, involving a complaint brought by the Competition Commission in which it claims that Ster-Kinekor Theatres and Nu-Metro  engaged in market allocation.

Market allocation or market division schemes are agreements in which competitors divide markets among themselves. The case to be heard relates to lease agreements at the V&A Waterfront shopping complex, in Cape Town.

Nu Metro and Ster-Kinekor are the two biggest competitors in the film exhibition market.

The Competition Commission initiated the complaint in May 2009 after Avusa applied for conditional immunity and provided evidence of the existence of collusion in the film exhibition market at the V&A Waterfront shopping complex in Cape Town.

A lease agreement was entered into by Nu Metro with its then landlord Transnet Pension Fund, wherein Nu Metro had an oral right of first refusal in relation to any film exhibition on the Waterfront premises.

When Nu Metro discovered that there were negotiations with Ster-Kinekor, about the operator also operating at the Waterfront Shopping Complex, Nu Metro filed an interdict at the High Court, the Competition Tribunal said in a statement on Friday.

It said that Nu Metro and Ster-Kinekor later entered into a settlement agreement, that was subsequently made an order of the court, in which Nu Metro would withdraw its objection to Ster-Kinekor’s lease agreement and that Nu Metro would only show commercial films while Ster Kinekor could only show subtitled or art movies.

It is this arrangement that the Commission submitted amounted to market allocation. It is asking for 10% of Ster-Kinekor’s annual turnover.


Read: Ster-Kinekor eyes video-on-demand in South Africa

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