Zimbabwe’s dairy industry is set for a significant shift after the Competition and Tariff Commission (CTC) approved the proposed acquisition of dairy processor Dendairy by Vamara Group Limited, a subsidiary of Mauritius-registered Export Trading Group (ETG), subject to conditions.Zimbabwe travel guide
The transaction involves the acquisition of a 100 percent shareholding in Dendairy by Vamara Group while it consolidates ETG’s Zimbabwe footprint.
Dendairy has reportedly navigated significant financial and operational challenges in recent years, leading to recent ownership restructuring.
In 2021, Dendairy was reported to be in discussions to merge with Dairibord, Zimbabwe’s largest dairy producer, but the deal allegedly collapsed over certain structural disagreements.
In early 2019, Dendairy reported severe difficulties in acquiring foreign currency to import essential raw materials for production.
CTC said it initially received a partial merger notification in May last year before the transaction was fully notified in July 2025.
“On May 12, 2025, the commission received a partial merger notification, which was fully notified on July 9, 2025, of the proposed acquisition of 100 percent shareholding in Dendairy (Pvt) Ltd by Vamara Group Limited,” the commission said in its latest quarterly newsletter.
Dendairy is one of Zimbabwe’s notable dairy processors, producing a range of products including UHT milk, ice cream and dairy blended juices.
The company also operates two dairy farms in Kwekwe and works with contract farmers to supplement its supply of raw milk.
ETG Group already has a diverse footprint in Zimbabwe through several subsidiaries operating in agricultural inputs, chemicals, logistics, food processing, energy and metals.Zimbabwe travel guide
Through its Zimbabwean unit, ETG Parrogate, the Mauritian entity is already a top-3 player in Zimbabwe’s cooking oil sector via ZimGold Industries, which is expanding its footprint in the country.
The CTC noted that one of ETG’s subsidiaries, Edurate Investments, manufactures stockfeed, a critical input in dairy farming.
Reflecting on the merging parties’ activities, the commission said the relationship between stockfeed production and dairy processing was central to the transaction’s competition assessment.
“Stockfeed produced by Edurate is a critical input in dairy farming, directly influencing the production of raw milk, thereby affecting the dairy products value chain,” the commission said.
Because of this supply chain relationship, the transaction was classified as a vertical merger, meaning it links businesses operating at different stages of the same production chain.
CTC defined the relevant markets affected by the transaction as the production and supply of dairy products, and the manufacture and distribution of stockfeed across Zimbabwe.
The commission undertook a detailed competition analysis focusing on potential risks that can arise from vertical mergers. These include the possibility that the merged entity could restrict rivals’ access to key inputs or customers.
CTC said one potential concern was customer foreclosure, where competing stockfeed suppliers might be excluded from supplying dairy farmers linked to Dendairy.
However, the commission dismissed this risk after establishing that alternative demand sources for stockfeed remained available in the market.
“Customer foreclosure was dismissed owing to availability of significant alternative demand for competing stockfeed suppliers through contracted farmers,” the commission said.
Another issue examined was input foreclosure, where the merged entity could potentially prioritise its own dairy operations when supplying stockfeed.
Although the commission concluded that the risk was limited at present, it noted that the relationship between feed supply and milk production required careful monitoring.
“Although input foreclosure was unlikely to have a significant impact on competition immediately post-merger, considering that Vamara is a minute player in the stockfeed market, stockfeed constitutes nearly 80 percent of the cost of producing milk,” the commission said.
CTC added that the link between Vamara’s feed business and Dendairy’s milk production network, including its own farms and contract farmers, could create opportunities for preferential treatment.
“The link between Vamara and Dendairy’s milk production, through its farms and contract farmers, could provide opportunities for preferential treatment in pricing, credit terms, or payment arrangements in both raw milk production and dairy processing,” the commission said.
To prevent such outcomes, the regulator approved the merger with a condition requiring fair trading practices across the supply chain.
“In light of the analysis, the commission approved the transaction on the condition that Vamara Group Limited, its subsidiaries, affiliates and successors-in-title, and Dendairy (Private) Limited, its subsidiaries, affiliates and successors-in-title, shall trade with their suppliers and customers on non-discriminatory terms and conditions,” the CTC said.
The Common Market for Eastern and Southern Africa (Comesa) Competition and Consumer Commission (CCCC) was notified about the transaction as part of regional merger monitoring requirements.
The deal could strengthen Dendairy’s capacity to scale operations and stabilise milk supply through improved integration with agricultural inputs and logistics networks within the ETG group.
Zimbabwe’s dairy sector has been gradually recovering after years of declining production, with increased investment in farming, contract supply arrangements and processing capacity helping to boost milk output in recent years. – Herald