On 23rd April, 2023, the Secretariat of the Commission received a merger application concerning a proposed acquisition of part of assets of Glenae Poultry Farm by Go Fresh Limited. The proposed transaction involves Go Fresh acquiring 100% of the poultry business of Glenae Poultry
Go Fresh Limited is a Malawian company and is involved in the supply of poultry and meat products.
Glenae Poultry, is a Malawian company involved in the poultry farming business and is involved in the production and distribution of chickens and chicken products.
According to the parties:
- The transaction would save a failing business and existing jobs;
- Go Fresh is a small player on the market and still a price taker;
- The transaction would not have a negative impact on trade or economy;
- There are many players in the market and customers have countervailing power;
- The transaction would enhance efficiency in production and lower distribution costs.
Investigations carried out on the application established that the majority of stakeholders were concerned with the affiliation of Go Fresh to Central Poultry.
The Commission considered the merger and were of the view that the transaction would raise serious competition concerns especially in the dressed chicken market. Further, the transaction would result in a change of the market structure and a removal of a vigorous competitor.
While there is a claim that the transaction is aimed at saving a failing firm and safeguard existing jobs, the Commission was of the view that the connection between the acquiring entity and Central Poultry poses a significant threat of strengthening the dominant position of Central Poultry handing it excessive market power in the chicken meat market as the merged entity would claim 68% market share post-merger.
It was also the Commission’s finding that the transaction would not create a conducive environment for the expansion and growth of SMEs in the poultry sector in the country.
Upon deliberations, the Commission made the following determinations:
- Rejected the proposed acquisition of parts of assets of Glenae Poultry farm by Go Fresh Malawi Limited.
- Ordered the Parties to unwind the already consummated merger.