J. Sroczyński for WuW No. 9/2015 – OCCP opened for the first time second phase merger control proceedings

Maspex, the leading Polish producer of fruit and vegetable juices, obtained a consent of the President of the Office of Competition and Consumer Protection (“OCCP”) for an acquisition of its competitor Agros-Nova. The OCCP has established that the transaction will not lead to the gaining of a dominant market position by Maspex. The OCCP was examining the relevant product markets which comprise juices, carbonated drinks and nectars, sauces and jams. The market power of Maspex and Agros-Nova derives mainly from their respective, well-recognized brands. Maspex owns the brands of Tymbark, Caprio and Kubuś, and will take over Agros-Nova’s brands of Dr Witt, Tarczyn and Włocławek. However, the other brands of Agros-Nova (Garden, Ptysio and Fortuna) will not be part of the transaction. Maspex will continue to face significant competition from those brands and from such players like Coca-Cola, Hortex and Żywiec-Zdrój. On the market for sauces, the adequate level of competition will be assured by Heinz and Unilever, and on the jams market by Stovit.

The OCCP issued its consent to an acquisition of FagorMastercook by Bosch. Both companies are active on the market of household appliances. The OCCP has defined several markets on which both companies compete, including kitchen ovens, cooktops, microwaves, dishwashers and clothing dryers. The only market on which Bosch may have a dominant position in Poland is that of dishwashers. However, FagorMastercook has less than 1% share on that market. On the other relevant markets, the combined shares of the parties are not significant. In addition, Electrolux, Samsung and other producers of household appliances will remain strong competitors. As a result, the transaction will not lead to a significant impediment of effective competition.

The OCCP has for the first time decided to open the second phase in two merger control proceedings, i.e., of Górażdże Cement (taking over Duda Kruszywa and Duda Beton) and Xella (taking over Grupa Silikaty). Since 18 January 2015, the amended antimonopoly law provides that the second phase can be opened if the notified concentration is particularly complicated, can lead to a significant impediment of competition or requires a market research. In other cases, notifications are decided in the first phase only, lasting one month. In both cases taken to the second phase, to last for additional four months, the OCCP has found the need to research the relevant markets. In the Górażdże Cement case, these are the local markets of cement, ready-mix and mineral aggregates. In the Xella case, the examined markets comprise the local markets for wall building materials. The OCCP has reminded that the moving of notified concentrations to the second phase does not indicate which particular type of merger decision will be issued by the OCCP.

The OCCP has found that Kompania Węglowa, the leading Polish state-owned producer of coal, did not abuse a dominant market position in the form of predatory pricing. The allegations of abuse were submitted to the OCCP by Bogdanka, the only privately owned Polish coal mine. Bogdanka claimed that Kompania Węglowa had been selling coal below production costs and covering the difference between those costs and profitable price by the financial means obtained from public aid. Such practice, according to Bogdanka, had a long-term negative effect on its ability to compete with Kompania Węglowa. The OCCP conducted a market study which lead to the conclusion that the relevant geographical market of this case in not the Polish, but the EU-wide market of coal. As a result, Kompania Węglowa cannot be held dominant on such defined market. In addition, the OCCP did not qualify the pricing policy of Kompania Węglowa as abusive. In the contrary, the OCCP recognized the need of Kompania Węglowa to apply pricing strategies aimed at overcoming the crisis situation on the European coal market. In consequence, the OCCP decided not to open the antimonopoly proceedings against Kompania Węglowa.

J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 9/2015.