Durrant Pate/Contributor

The Fair Trading Commission (FTC) has cleared spice and sauces manufacturer, Spur Tree Spices takeover of agro-processor Conco Limited, which trades as Linstead Market.

Spur Trees Spices sells canned ackee and canned callaloo exclusively in export markets, while Canco sells about 10 per cent of its production in Jamaica.

FTC concludes that the relevant geographic market comprises the sale of canned ackee and canned callaloo in geographical areas outside Jamaica. Following an investigation pursuant to Section 17 of the Fair Competition Act, 1993, the competition regulator cleared the takeover, declaring that it did not and is unlikely to breach the Fair Competition Act.

Section 17 of the Fair Competition Act prohibits an agreement that contains provisions that have as their purpose or effect the substantial lessening of competition in a market. The FTC relied solely on information provided by both Spur Tree Spices and Conco.

In addition to newspaper articles and various annual reports were consulted as a part of the investigation.

Genesis of the take-over

Spur Trees responded to an expression of interest from Canco’s directors and shareholders to purchase shares in Canco with the parties seeking to cement their business relationship by way of Share Purchase Agreement and Share Subscription Agreement. These agreements permit Spur Tree Spices to acquire a 51 per cent shareholding in Canco.

Regarding the purpose of the subject agreements, the parties indicated to the FTC that the primary aim of the proposed acquisition is to reduce expenses and create synergies of the efforts and resources between the companies to optimise production. At the completion of the agreements, Spur Trees Spices will hold a controlling equity interest in Canco.

The FTC concludes: “To the extent that Section V of this report concludes that the relevant market for assessing the challenged conduct involves geographic areas exclusively outside of Jamaica, the Staff concludes that the conduct is unlikely to breach the Fair Competition Act… . The challenged transaction is unlikely to adversely affect competition in any market in Jamaica. 31. The conclusion of the investigation is that Spur Tree’s acquisition of controlling interest in Canco is unlikely to breach Section 17 of the Fair Competition Act.“

Continuing, the FTC says: “Based on the information available for the purpose of this assessment, the Staff recommends that the Commission takes no further action regarding the challenged transaction.”