But, there’s a catch; CTC says it has “serious concerns” over the influence that Innscor and the Pro Group have in the upstream value chain, especially its dominance of the stockfeed market.
“Stock feed accounts for between 60%-70% of the cost of producing raw milk in Zimbabwe, IAL and PGH, through National Foods and Profeeds, controls the supply of stock feeds in Zimbabwe, commanding 57% market share, which can therefore afford to give Mafuro and other contracted dairy farmers large discounts on stock feed, with the same not being extended to dairy farmers supplying Prodairy/Kershelmar’s rivals,” says the commission.
Because the merger was done without telling CTC, the commission would only approve it if Innscor or Pro Group sell their shares in the merged company. Prodairy must also pay a fine of US$284 246 and Kersehlmar US$59 179. The fines are payable in Zimbabwe dollars.
CTC’s latest measures against Innscor are not the first time that the commission has gone after Innscor.
In May 2020, CTC ordered the reversal of Innscor’s deal to buy 49% of Profeeds. For failing to notify CTC of the transaction, Innscor was ordered to pay a fine. Innscor appealed against this ruling and won, but CTC has continued its battle.
Innscor updated on this recently, saying: “In January 2022, the Administrative Court overturned the CTC’s directive for the Group to disinvest from Profeeds, and it further directed that the fine be withdrawn and replaced with a caution. The CTC has since appealed the judgement to the Supreme Court.”
CTC also previously reversed Innscor’s acquisition of another 49% in Podutrade, another manufacturer.
CTC also in the past blocked the planned acquisition of 59% in Profeeds by Irvine’s, an Innscor subsidiary, saying such a deal would give Innscor a monopoly in the stock feed business. In 2014, Innscor successfully fought a CTC fine for increasing its stake in National Foods.-NewZWire