J. Sroczyński for WuW No. 3/2010 – Decisions of the President of the Office of Competition and Consumer Protection concerning concentrations

The first merger prohibited by the President of the Office of Competition and Consumer Protection (“OCCP”) was notified by Cogifer Poland, a company active on the market of railroad junction devices, which intended to acquire control over competitor Koltram. The planned acquisition was a “3-to-2” case and the merged Cogifer/Koltram’s market share would be very high. The President of the OCCP applied the SIEC test and has found that competition on the relevant market would be significantly impeded. High entry costs and legal barriers of the market would considerably limit any potential competition. For those reasons, the regulator decided that the planned merger should not be cleared.

The second prohibited merger was notified by Rieber Foods Poland (owner of “Delecta” brand), which planned to acquire control over competitor FoodCare (owns “Gellwe”, “Tiger” and “Fitella” brands). The President of the OCCP segmented the relevant markets quite narrowly, defining whipped cream powder, glaze for desserts, baking soda, vanillin sugar, cake flavouring and cake mix, as separate products markets. On all such defined markets, Rieber would gain dominant market position following the planned acquisition. Relying on the SIEC test, the President of the OCCP decided not to clear the notified merger, taking into account the existing entry barriers, including high entry costs and consumer brand loyalty. According to the President of the OCCP, those barriers would be an obstacle for potential competition to emerge.

Both prohibiting decisions are not final and can be appealed to the Court of Competition and Consumer Protection.

The President of the OCCP has cleared a merger between Mix Electronics and Electro World Polska, on the market for electronic and household devices. Also, a joint venture between EcoStream Oy and Lotos Jaslo has been cleared, established to act on the market for fuel products. Bunge, a well know leader of the edible fats market, received a consent to acquire Raisio Polska Foods. Sugar producers Pfeifer & Langen and British Sugar Overseas Polska received clearance for planned merger.

Two mergers was cleared on the FMCG market. The hypermarket chain E. Leclerc received a consent to acquire Billa shops. Presspo was accepted as a buyer of 35 food discount shops from Biedronka, a chain belonging to Jeronimo Martins, which was obliged to divest those shops in a conditional decision approving its earlier acquisition of Plus Discount.

J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 3/2010.