View noticesR6.5bn merger under threat as Cosatu warns of thousands of job losses
The future of thousands of jobs in the Western Cape's fruit-processing industry hangs in the balance as the Competition Commission seeks to overturn its approval of Premier Group's R6.5 billion acquisition of RFG Holdings.
It follows allegations emerging that plans to close a major canning factory in Tulbagh were withheld from competition authorities.
The Congress of South African Trade Unions (Cosatu) has warned that 3,500 jobs are at stake, with a further 20,000 people potentially affected across Tulbagh, Wolseley, Ceres, Gouda and Wellington if the Fruit Products Western Cape (FPWC) facility closes.
According to Eyewitness News, Cosatu has called on Premier to return to the negotiating table and explore alternatives to closure, including selling the factory to an operator willing to preserve production and employment.
The dispute has escalated into an extraordinary legal confrontation over a merger approved by the Competition Tribunal on 6 March, subject to conditions designed to protect employment.
The transaction was implemented on 30 March, but four months later Premier announced that it intended to close the Tulbagh operation, citing deteriorating demand for canned fruit in domestic and international markets.
The Competition Commission now alleges that Premier and RFG had considered the possibility of closing the facility before the merger was approved, but failed to disclose this information despite specific enquiries about their plans.
Premier strongly denies the allegation, maintaining that the closure decision arose only after the acquisition and was unrelated to the merger.
Regulator seeks to overturn approval
In an application announced on 7 October, the Competition Commission asked the Tribunal to revoke its conditional approval of the merger under Section 16(3) of the Competition Act.
The commission argues that the companies’ alleged failure to disclose material information prevented regulators from properly assessing the transaction's implications for competition, employment and the agricultural economy.
The original merger conditions included a three-year moratorium on merger-related retrenchments. Any retrenchments during that period are presumed to be merger-specific unless the companies can demonstrate otherwise.
The commission's case follows a complaint involving the Southern African Clothing and Textile Workers' Union (Sactwu), which challenged the proposed closure and its implications for workers.
Competition Commissioner Doris Tshepe has stressed that the integrity of South Africa's merger-control system depends on companies making full and accurate disclosures.
The regulator is also seeking urgent interim relief to preserve the Tulbagh factory's ability to operate as a cannery while the main application is considered. Alternatively, it wants the Tribunal to reconsider the merger or impose additional or amended conditions.
Competition law specialists, writing for Moneyweb, have described the application as the first in which the commission has sought to revoke a merger approval on the grounds of alleged non-disclosure of material information.
Premier disputes allegations
Premier has rejected suggestions that it misled the authorities or breached its merger obligations.
In a shareholder announcement issued on 8 October, the JSE-listed company said the decision to close FPWC followed a significant deterioration in the commercial outlook for canned deciduous fruit.
The company maintains that the industry has been experiencing a structural decline in demand, compounded by difficult export conditions and weakening commercial viability. Approximately 90% of the Tulbagh facility's production is exported, leaving the operation particularly vulnerable to changes in international demand, trade barriers and competitive pressures.
Premier insists that the economic circumstances leading to the proposed closure would have affected the factory regardless of its acquisition of RFG. The company has confirmed that it intends to oppose the Competition Commission's application.
Importantly, Premier has also disclosed that 407 of the 409 affected employees accepted voluntary severance agreements following consultations facilitated by the Commission for Conciliation, Mediation and Arbitration (CCMA). The remaining two employees will continue working within the group.
Premier consequently maintains that no compulsory retrenchments will be implemented, although the voluntary departures do not resolve the broader dispute over the factory's future.
Farmers and rural communities face wider fallout
The potential closure extends beyond the permanent workforce. The Tulbagh facility is one of only two major fruit-canning operations remaining in South Africa and provides an important market for approximately 200 Western Cape fruit growers.
Its closure could disrupt longstanding agricultural supply arrangements, threaten seasonal employment and affect transport operators, packaging suppliers and other businesses dependent on the fruit-processing industry.
Cosatu has warned that the effects could extend across five rural communities, where agricultural production and processing are important sources of employment and economic activity.
The federation argues that the consequences must be considered in the context of South Africa's already high unemployment rate and the limited availability of alternative work in smaller agricultural towns.
It has urged Premier to consider selling the factory as a going concern rather than dismantling its productive capacity.
Premier has indicated that it is engaging with fruit suppliers and parties interested in repurposing the Tulbagh facility.
The company has also explored arrangements to transfer fruit-supply contracts and process some production elsewhere.
However, organised labour maintains that preserving the factory's canning operations should remain the priority.
A landmark test for merger regulation
The dispute raises questions extending well beyond the future of a single factory. Under South African competition law, merger approvals are assessed not only on their potential impact on market competition but also on public-interest considerations, including employment.
The Competition Commission's application could establish an important precedent for how companies disclose operational plans during merger proceedings and the circumstances in which an already implemented transaction can be reconsidered.
For Premier, the stakes are substantial. The merger brought RFG's established food brands and processing operations into its business, significantly expanding the group's presence in the packaged-food sector.
For the workers, farmers and communities surrounding Tulbagh, the immediate concern is whether industrial production can be preserved before the facility's closure becomes irreversible.
The Competition Tribunal has yet to determine the commission's application. Until then, the approval of one of South Africa's significant recent food-industry acquisitions remains under legal challenge, while the economic future of the Tulbagh cannery remains uncertain.
Sources: Competition Commission, media release, 7 October 2026; Competition Tribunal, merger order, 6 March 2026; Premier Group, SENS announcement, 8 October 2026; Eyewitness News, 7 and 16 October 2026; Cape Argus, 8 October 2026; Moneyweb, 9 October 2026; GroundUp, September 2026.