Last December, the giant British American Tobacco announced the future acquisition of Twisp, a South African manufacturer of electronic cigarettes. Recently the Competition Commission announced that if the tobacco giant was allowed to acquire Twisp it could drive up the price of e-cigarettes.
EFFECTS ON THE PRICE OF ELECTRONIC CIGARETTES IN SOUTH AFRICA
In South Africa, the Competition Commission believes that the plan of British American Tobacco (BAT) to buy the electronic cigarette manufacturer Twisp could lead to an increase in the prices of e-cigarettes.
According to this commission British American Tobacco is already a global player in e-cigarettes and could easily enter the South African market without buying a competitor. Last January, BAT signed an agreement to acquire the company Twisp, but this remains subject to the approval of the South African Competition Tribunal.
« This merger is likely to have unilateral effects which could result in in the future by an increase in the price of e-cigarettes", Said the Commission a statement adding" This could also lead to a reduction in the quality or innovations of e-cigarettes »
THE COMMISSION RECOMMENDS THAT TRANSACTION BE PROHIBITED!
The commission, mandated to promote and maintain competition in South Africa, said BAT has a prominent place in the e-cigarette market internationally and could easily enter the South African market without buying from a competitor.
« British American Tobacco would have been able to effectively compete Twisp, the largest supplier of electronic cigarettes in South Africa"
And the report's conclusion is stinging: " The Commission recommends that the proposed transaction be prohibited. ".
« We already have a large footprint elsewhere in the world. We are committed to growing our next-generation product business and it was only natural that we expand our offering in South Africa with a well-known product line », Said at the time Soraya Benchikh, CEO of BAT South Africa.
