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CompCom’s Burger King Bungle

The Competition Commission vetoed the sale of Burger King based on, for the first time, BEE and not competition. But this contradicts BEE goals and the commission’s mandate.

CompCom’s Burger King Bungle

The Competition Commission vetoed the sale of Burger King to a foreign buyer based on, for the first time, BEE and not competition. (Lexology)

Is this another short-sighted bureaucratic bugger up?


On 1 June, 2021, when the commission blocked the deal, it cited concerns over black ownership dropping from 68% to 0%. This was despite the buyer committing to 4 other significant BEE-related goals worth hundreds of millions, possibly billions, and directly benefitting over 1,250 black workers and plans for future black ownership.

Although ownership is an important BEE factor, the commission is obviously misinterpreting BEE and competition legislation. In its view, ownership apparently trumps all other factors that might support BEE, including denying present black owners from realising the value of their investment.

This runs against the intentions of BEE and the commission’s mandate. The decision directly prejudices blacks from participating in the economy by (a) blocking black owners from growing their business and cashing out and, (b) blocking or slowing benefits to thousands of black workers and suppliers.

The decision also sets a precedent that disadvantages everyone in the economy, especially black entrepreneurs. To the cynical, it’s another notch in the woke list of “white privilege” factors: reducing black ownership is irrelevant to a white-owned business.

What the commission is actually saying to black entrepreneurs is, “If you’re black, you can sell to only other black entrepreneurs.”

That restricts buyers to only South African investors (because non-South Africans can’t be “black” in BEE terms) and only those who are blacker than you.

It seems the commission is missing the point of entrepreneurship being to grow your business in order to enjoy the profits, whether as dividends or exit capital. Especially that last bit about exiting. When you sell out and you’re limited to a tiny pool of buyers, it devalues the realisable value of your business. It’s a clear disincentive against black entrepreneurs to grow beyond a small business.

It’s ironic that, instead of assuring healthy competition, the commission is stifling it. It also reinforces the concentration of black wealth amongst only those few who can afford major buy-outs and a key failing of B-BBEE not actually being broad-based.

What to do?

Fortunately, as statistics indicate, most businesses are not big enough that their sale triggers an eyeballing by the Competition Commission. So don’t fret about it. Just keep building your business.

In fact, building a business big enough to merit the commission’s attention would be a badge of honour—would you prefer an insignificant business or one that gets the Competition Commission’s panties in a knot?

Image credit: Wallpaper Flare.

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