OK Zim’s Food Lovers ordered to buy local
Ok Zimbabwe will have to procure the bulk of its vegetables from local farmers as part of conditions for its approved acquisition of Food Lovers Market.
Early this year, OK Zimbabwe announced its acquisition of Food Lovers Market Zimbabwe (Food Lovers) in Harare’s Borrowdale and Avondale as well as Bradfield, Bulawayo.
The transaction excludes the Greendale Store, which remains independently owned. According to Margaret Munyuru, OK Zimbabwe’s Company Secretary, in an announcement in mid-January, the transaction includes the grant of a Territorial License Agreement, which endows OK Zimbabwe Limited with territorial exclusivity for the expansion of the Food Lovers Market Brand within the Zimbabwean market.
OK Zimbabwe management believes that “with this acquisition, OK Zimbabwe Limited will enhance its participation in the premium retaining of gourmet food as well as fruit and vegetables categories.
“The group also welcomes access to promising supply chain synergies within the Food Lovers Market ecosystem and the rest of the OK Zimbabwe Limited Group.
“Our expectation is to build economies of scale in supporting local farmers and food processors to serve a wider range of stores,” said OK Zimbabwe chief executive officer Max Karombo.
Buying from local suppliers is one of the conditions set by the Competition and Tariff Commission (CTC) before the deal was allowed to sail through, Business Weekly can reveal.
As one of its conditions set by CTC, OK Zimbabwe will have to procure at least 85 percent of its fruits and vegetable requirements from local farmers.
Concerns also arise on the possibility by OK Zimbabwe to terminate employment contracts once the merger is consummated.
According to CTC, in its Q4 2022 Newsletter, termination of employment was unlikely given that OK Zimbabwe submitted that most Food Lovers employees will be offered employment contracts by OK Zimbabwe.
The Commission’s view is that there is need for a smooth transition of the taking over of the business of Food Lovers by OK Zimbabwe such that employment contracts are not abruptly changed.