Decision 515/2011 | |
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File (PDF) | Decision 515/2011 |
Date of Issuance of Decision | February 14th, 2011 |
Government Gazette Issue No | |
Relevant Market |
Milk products |
Subject of the Decision |
Merger |
Legal Framework |
Phase II-in-depth investigationof article 4d of L. 703/1977 |
Operative part of the Decision |
Clearance under conditions |
Acquiring company(ies) |
VIVARTIA Holding S.A |
Target company(ies) |
MAKEDONIKI MILK INDUSTRY – MEVGAL S.A |
Summary of Decision |
On 15.09.2010, the company “VIVARTIA Holdings S.A” notified to the HCC, in accordance with the provisionsof article 4b of former law 703/77, the acquisition of 43% of the nominal share capital of the company “MAKEDONIKI MILK INDUSTRY – MEVGAL – S.A”. The notified merger concerned the acquisition of sole control by the notifying company VIVARTIA (through its subsidiary DELTA TROFIMA) over the company MEVGAL, given that VIVARTIA would have the absolute majority of its shares and voting rights and it wouldtherefore be capable of taking decisions of strategic importance concerning MEVGAL. VIVARTIA is active in the following sectors:
MEVGAL is active in the production and distribution of dairy products, such as milk and similar yogurt products, as well as fruit juices. The concentration will lead to horizontal overlaps in the markets for fresh milk, high-pasteurized milk, condensed milk, chocolate milk, milk with coffee, milk-based desserts, bulk yogurt, standardized yoghurt withflavors,standardized baby yogurt, juices, soft standardized yoghurt, soft bulk cheese, semi-soft cheese, hard cheese, hard bulk cheese, and milk cream. Significant horizontal overlap also occurs in the fresh milk supply market, both nationally and locally / regionally (production zone of Macedonia). Nevertheless, taking into consideration the affected relevant markets, the notified concentration is not expected to significantly restrictthe operation of effective competition, taking into account mainly the low cumulative market share of the new entity in relation to its competitors or/and of the low level of concentration in each relevant market after the completion of the merger / acquisition, the existence of strong competitors (that possess significant market shares, established brands, as well as surplus production capacity), the reduced market share of VIVARTIA and the possibility of (partial) substitution with related product categories. For these reasons, the only affected markets considered in detail, given that restrictive competition effects might arise were the following: fresh milk, chocolate milk, bulk yogurt, standardized baby yogurt, and fresh milk supply (both locally and nationally). In terms of vertical effects on competition, upon completion of this transaction, the new entity would have a market share of over 25% in dairy inputs (mainly fresh pasteurized milk, chocolate milk and yogurt products) for markets, where one of the participating parties, and mainly VIVARTIA (downstream markets) is active, and in particular inthe relevant markets of fast-food restaurants, cafes and catering. However, according to the opinion of the members of the Commission, in the examined merger, the conditions for safely assuming adverse vertical effects and exclusion of competitors in the downstream markets from access to inputs, are not met. The Plenary Session of the HCC, in one of the more significant merger decisions, taking into account the possible adverse effects of the case in the operation of competition, as these are described in detail in the full text of the Decision, decided the clearance of the merger concerning the acquisition of control over the company MEVGAL by the company VIVARTIA, under the following terms and conditions (remedies), according to article 4d of former L. 703/77, on the basis of the commitments proposed by the acquirer. Based on the Commission decision, the acquirer shall:
The HCC was particularly concerned with maintaining conditions of effective competition in the dairy sector, through the unimpeded access of competitors to the relevant markets and final points of sale, but also the strengthening of the bargaining power of raw milk producers in the prefectures of northern Greece, where the new entity exhibits increased purchasing power. The HCC mentioned that the strengthening of collective structures, the establishment of more direct access of producers to the retail markets, the promotion of the vital agriculture / livestock sector, and the buildup of quality development models under the auspices of ELOGAK, are expected to make a decisive contribution to the more rational organisation and management of the production process and to stimulate the bargaining power of producers. |
Judicial Means | Appeal. |
Decisions by the Court of Appeal of Athens (Administrative Division) | ACAA 5045/2013 |