KFC takeover approved conditionally

Keikantse Lesemela
Monday, 19 February 2018

New KFC owner, Bradlymores has been approved by the Competition Authority to take over the business with conditions to continue sourcing supplies from local producers and assisting local companies to meet accredited standards for the international restaurant. Bradlymore a joint venture company between Vivo Energy  and Baobab Khulisani South Africa acquired KFC Botswana from the liquidator, Nigel Dixon-Warren.

Competition Authority stated that the acquisition does not result in substantial lessoning of competition or endanger the continuity of the services offered in the market for quick-service or fast food restaurants. In a statement, Competition Authority Chief Executive, Tebelelo Pule said the Authority took cognisance of the commitment by the merging parties in their intention to continue sourcing from local supplies approved by YUM.  “The Authority further takes note of the commitment by Bradleymores to develop a robust supply chain that is aimed at ensuring that local suppliers are capacitated to enable them to meet the supply requirements set by YUM ... adhering to the franchisors quality standards.” reads the statement.

The authority also set a condition that the company should not retrench any employees of the target entities as a result of the acquisition for a period of three years from the implementation date. 

Pule highlighted that in order for the Authority to properly monitor compliance with the conditions, the Authority shall require Bradleymores to annually (for a period of three years from the implementation date) submit to the Competition Authority, a detailed report indicating any changes to its employment records in the country and the reasons thereof as well as a list of its existing and new locally based suppliers (including the type of inputs they supply). 

Meanwhile in 2015 local poultry farmers raised concerns over KFC Botswana pointing out that the company is not supporting local chicken farmers as it gets most of its products from South Africa. The chicken farmers appealed to the new owners to come up 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 the stringiest rules in place, including transportation from the abattoir to the restaurants.

The KFC Botswana portfolio, which consists of 12 restaurants, was placed under liquidation in June last year after the company failed to service its debts and creditors.  Vivo Energy through its network of Shell-branded retail service stations in Botswana is a marketer of various oil products including retail fuels, commercial fuels and lubricants. On the other hand, Baobab Khulisani, a South African KFC franchisee operates 11 stores in South Africa.

Bradlymore’s is a limited liability company incorporated in accordance with the laws of the Republic of Botswana. It is a special purpose vehicle that was set up for purposes of the proposed transaction and, as such, is not involved in any form of activity. 

KFC Botswana business was operated through three wholly owned subsidiaries of VPB Propco (Pty) Ltd which include Greenax (Pty) Ltd (Greenax), QSR (Pty) Ltd (QSR) and Boitumelo Dijo (Pty) Ltd. These subsidiaries operate 12 KFC franchises in Botswana situated in the following areas: six in South-East district; two in North-East district; and one in each of Southern (Kanye), Kweneng district (Molepolole), Ngamiland district (Maun), and Chobe district (Kasane).

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