South African Raisins (Proprietary) Limited and Another v S A D Holdings Limited and Another

The first respondent was a co-operative converted to a public company on 29 July 1998, and through its subsidiary (second respondent) carried on a raisin processing business at Upington. For many years it occupied a dominant position in the dried fruit and raisin market with exclusive marketing rights. After the Marketing of Agricultural Products Act 47 of 1996 came into force, the first appellant entered the raisin industry by establishing a processing plant at Marchand in February 1998. Disputes arose between the parties, including over the use of storage containers. On 12 October 1999, the first appellant lodged a complaint with the Competition Commission alleging prohibited practices by the respondents. On 24 November 1999, the Competition Tribunal granted an interim interdict against the respondents from inducing producers not to deal with the first appellant. The respondents challenged the Tribunal's jurisdiction, and the High Court (per Ngoepe JP) held that the Competition Act did not apply to the raisin industry and declared the Tribunal's orders null and void.

• Whether the Competition Act 89 of 1998 applies to the raisin industry or whether it falls within the exclusive domain of the Marketing of Agricultural Products Act 47 of 1996
• Whether the Competition Tribunal had jurisdiction to make the orders of 24 November 1999 and 24 December 1999
• The proper interpretation of section 3(1)(d) of the Competition Act which excludes 'acts subject to or authorised by public regulation'
• Whether the appeal had become moot given that the interim order had expired

The appeal was allowed with costs, including costs of two counsel. The judgment of the High Court was set aside and replaced with an order dismissing the application with costs.

The binding legal principle established is that section 3(1)(d) of the Competition Act 89 of 1998, which excludes 'acts subject to or authorised by public regulation', applies only to actual existing legislation, directives or authorizations issued by a regulatory authority, and not to mere potential or enabling powers to regulate. An enabling statute that empowers a Minister or regulatory authority to issue directives or impose regulatory measures does not constitute 'public regulation' for purposes of the exclusion unless such directives or measures have actually been issued and are in force. In the absence of actual regulatory measures issued pursuant to sector-specific legislation, the Competition Act applies to the industry in question and the Competition Tribunal has jurisdiction to adjudicate alleged prohibited practices.

The Court expressed the view (obiter) that raisins are fruit for purposes of Government Notice R 1189, being fundamentally dried grapes. The Court also commented that it is permissible to give effect to the policy, object or purpose of legislation where there is ambiguity, referring to Standard Bank Investment Corporation Ltd v Competition Commission. Melunsky AJA noted that the word 'acts' in section 3(1)(d) should be confined to acts dealt with in chapters 2 and 3 of the Competition Act - monopolistic or anti-competitive agreements, practices or acts. The Court expressed doubt (without deciding) whether the Tribunal was entitled to make the orders of 24 December 1999, and assumed without deciding that it might be competent to grant suspension of a Tribunal order in the absence of a cross-appeal, though noted this would be academic in the circumstances.

This case is significant in South African competition law as it clarifies the relationship between the Competition Act 89 of 1998 and sector-specific regulatory legislation such as the Marketing of Agricultural Products Act 47 of 1996. It establishes that merely because a sector falls within the potential regulatory scope of sector-specific legislation does not automatically exclude it from the Competition Act. The case provides important guidance on the interpretation of section 3(1)(d) of the Competition Act, confirming that the exclusion for 'acts subject to or authorised by public regulation' applies only to actual existing regulation, not potential or enabling regulation. This ensures that the broad anti-competitive objectives of the Competition Act are not easily circumvented by the mere existence of enabling legislation in various sectors. The judgment reinforces the policy objectives stated in the preamble to the Competition Act and demonstrates the courts' willingness to interpret the Act purposively to promote competition across the economy.