Naspers-owned Media24, Paarl Coldset and Natal Witness have argued that the community newspaper market in KwaZulu-Natal (KZN) was “flourishing” and would not be damaged by a merger.
Media24 and Paarl Coldset seek regulatory permission to acquire Natal Witness Printing and Publishing. The matter has been set down for 12 days at the Competition Tribunal.
David Unterhalter, senior counsel for the three, said at the hearings yesterday that the merger would not result in the foreclosure of smaller rivals as five main groups in the community newspaper market were expanding their print capacity due to rising demand.
He said the manner in which Natal Witness assets had been deployed meant there was an alignment of interests with Media24 and Paarl Coldset, and it would not affect the market.
Media24 owns 50 percent of the Natal Witness. The balance is held by a certain Craig family.
The merger affects two markets: the free to reader newspaper market, and the market for coldset printing.
In July last year, the Competition commission recommended approval of the merger with conditions, including that Media24 enter long-term printing agreements with smaller rivals and divest some of its shares in Africa Web, a printing company in which Media24 and Natal Witness both own shares. Caxton and CTP Publishers and Printers was granted permission to intervene.
Caxton and the commission believed the merger could result in substantially reduced competition. The merged entity could also manipulate advertising rates and raise printing costs for independent publishers, they said.
The tribunal heard from Simangaliso Masinga, the owner of Maputaland Mirror, and Max Mxabo, the owner of Pondo News.
Both said community papers owned by Caxton and Natal Witness could not compete on language, but offered reduced advertising rates to clients, effectively stealing clients from independent players who could not afford to cut their rates.