Ruling deferred in KFC takeover matter

SHARE   |   Tuesday, 01 December 2015   |   By Kabelo Adamson
Thula Kaira, CEO-Competition Authority Thula Kaira, CEO-Competition Authority

The Competition Authority (CA) will in a month’s time make a ruling on a case in which Callus (pty) Ltd intends to acquire the operations of Kentucky Fried Chicken (KFC) from VPB Propco (pty) Ltd. After a lengthy hearing on the case at the authority headquarters on Monday afternoon, CA Chief Executive Officer, Thula Kaira, said they will after satisfying themselves with the necessary requirements of the transaction, follow with a ruling if the deal can go through.
The meeting, which according to Kaira, was supposed to last for 30 minutes ended up taking almost two hours as attendants who mostly identified themselves as poultry farmers decried lack of support from KFC as it gets most of its supplies from South Africa. The chicken farmers appealed to the impending new owners to come with a policy that will at least help them to supply the fried chicken outlet with some of the stock. However, it was revealed that KFC’s requirements on slaughtering and handling of the chickens have to meet some of stringiest rules in place, including transportation from the abattoir to the restaurants.
Callus representative, however, could not provide a clear answer on how they will empower local producers except to say they will absorb all employees currently under the employ of the franchise. Anthony Siwawa, who spoke on behalf of VPB Propco during the hearing, said they took the decision to exit the business earlier and a company called Country Bird Holdings made their desire known to take over the business. There are 12 KFC stores countrywide, all under the management of the VPB Propco with close to 400 employees.