{"id":878665,"date":"2026-10-07T10:03:07","date_gmt":"2026-10-07T08:03:07","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=878665"},"modified":"2026-10-07T10:03:07","modified_gmt":"2026-10-07T08:03:07","slug":"shutdown-of-72-year-old-factory-in-south-africa-could-blow-up-r6-5-billion-merger","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/878665\/shutdown-of-72-year-old-factory-in-south-africa-could-blow-up-r6-5-billion-merger\/","title":{"rendered":"Shutdown of 72-year-old factory in South Africa could blow up R6.5 billion merger"},"content":{"rendered":"\n<p>The Competition Commission is moving to revoke approval of the merger between Premier Group and RFG Holdings, after the company shut down its fruit cannery in Tulbagh, Western Cape, in July.<\/p>\n\n\n\n<p>The commission has filed an application with the Competition Tribunal seeking the revocation of the Tribunal\u2019s decision to conditionally approve the merger between the companies.<\/p>\n\n\n\n<p>The commission itself conditionally approved the R6.5 billion merger in March 2026, which was <a href=\"https:\/\/businesstech.co.za\/news\/business\/863714\/end-of-an-era-for-202-year-old-giant-in-south-africa\/\"><strong>completed by the end of that month<\/strong><\/a>. The conditions of approval included employment protections.<\/p>\n\n\n\n<p>The approval was also based on assurances that the closing or disposal of any manufacturing facilities, production lines, or equipment would not occur after the merger, the commission said.<\/p>\n\n\n\n<p>&#8220;[The companies] repeated this assurance before the Competition Tribunal approved the transaction, confirming that they did not contemplate closing, integrating or consolidating their respective production facilities,&#8221; it said.<\/p>\n\n\n\n<p>However, in July 2026, four months after the merger was implemented, Premier informed the commission that it intended to close RFG\u2019s fruit-canning facility in Tulbagh, Western Cape. <\/p>\n\n\n\n<p>The facility, Fruit Processing Western Cape (FPWC), is one of only two fruit-canning facilities in South Africa and provides an important route to market for approximately 200 Western Cape fruit growers. <\/p>\n\n\n\n<p>The FPWC is a large fruit-processing operation in the Western Cape that has been affected by deteriorating conditions in the global canned-fruit industry.<\/p>\n\n\n\n<p>In September 2026, Premier said its board had decided in July not to reopen the factory for the upcoming harvest season after a detailed assessment of the business and international market.<\/p>\n\n\n\n<p>Premier said the decision was driven by long-term structural problems in the global industry.<\/p>\n\n\n\n<p>FPWC\u2019s problems have been particularly severe because it relies heavily on international markets. Premier said approximately 90% of the factory\u2019s production is exported, but those prospects had deteriorated.<\/p>\n\n\n\n<p>However, the Competition Commission said the closure would have a massive impact on competition and jobs in the region.<\/p>\n\n\n\n<p>&#8220;[The factory] is a significant regional employer, and its proposed closure would affect more than 400 permanent and fixed-term employees, as well as thousands of seasonal workers across the broader agricultural value chain,&#8221; the commission said.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Non-disclosure<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/08\/Tulbagh-9.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/08\/Tulbagh-9-1024x576.jpg\" alt=\"\" class=\"wp-image-870998\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/08\/Tulbagh-9-1024x576.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/08\/Tulbagh-9-300x169.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/08\/Tulbagh-9-768x432.jpg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/08\/Tulbagh-9-1536x864.jpg 1536w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2026\/08\/Tulbagh-9.jpg 1600w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<p>The commission said that a complaint by worker unions prompted an investigation. The unions alleged that the cannery&#8217;s shutdown was a breach of the merger conditions.<\/p>\n\n\n\n<p>The investigation found that Premier and RFG had failed to disclose information about the contemplated closure to the Commission and the Tribunal, it said.<\/p>\n\n\n\n<p>This was despite the parties having known of and discussed the option to do so before the Tribunal approved the merger. <\/p>\n\n\n\n<p>&#8220;This information was material to the Commission\u2019s assessment, particularly because the Commission had expressly requested confirmation of the parties\u2019 post-merger plans for the closure, integration or consolidation of their production facilities,&#8221; it said.<\/p>\n\n\n\n<p>The commission said that the non-disclosure thus denied the Commission and the Tribunal an opportunity to assess and address the closure\u2019s competition and public-interest implications before approving the merger.<\/p>\n\n\n\n<p>&#8220;The contemplated closure of the Tulbagh cannery was material to the assessment of both the competition and public-interest aspects of the merger,&#8221; it said.<\/p>\n\n\n\n<p>&#8220;Withholding material information, whether by omission or as a deliberate act, undermines the integrity of the merger-control regime and may result in the revocation of an approved merger.&#8221;<\/p>\n\n\n\n<p>The commission said that shutting down the Tulbagh cannery would remove the only competitor to Langeberg from the South African market, effectively creating a monopoly in the sector. <\/p>\n\n\n\n<p>The public-interest consequences would also be significant, it said, including the aforementioned loss of permanent and seasonal jobs, the loss of a longstanding customer, and the decline of exports.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Competition Commission is moving to revoke approval of the merger between Premier Group and RFG Holdings, after the company shut down its fruit cannery in Tulbagh.<\/p>\n","protected":false},"author":10,"featured_media":870994,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2107743744376152229","_sma_facebook_post_id":"191437357620492_2229153907905008","_sma_instagram_post_id":"18115311845470191","_sma_x_attempts":1,"footnotes":""},"categories":[9872],"tags":[1516,22213],"class_list":["post-878665","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-competition-commission","tag-premier-group"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/878665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=878665"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/878665\/revisions"}],"predecessor-version":[{"id":878687,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/878665\/revisions\/878687"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/870994"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=878665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=878665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=878665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}