The Italian Competition Authority began an inquiry into the acquisition by Cirio of 75-per-cent stake in Centrale del Latte's equity capital.
The investigation was aimed at ascertaining whether this merger could lead to constitute or strengthen a dominant position in the market concerned in such a way as to reduce competition substantially and on a lasting basis.
Cirio, which is Italy's major group in the fresh milk sector, planned to proceed with such an acquisition, having awarded the tender organized by the Municipality of Rome in relation to the privatization of Centrale del Latte.
The relevant product markets concerned with the merger included fresh milk, UHT milk, yoghurt and cream. As far as the milk product was concerned, fresh milk and UHT milk constituted two different markets, by reason of their limited interchangeability for consumers. This distinction also implied a different definition of the geographic market which was nation-wide for UHT milk and narrower for fresh milk. As such, and considering that Centrale del Latte worked only in the region of Latium, the relevant geographic market could be considered region-wide.
On the contrary, the geographic dimension of the yoghurt and cream markets was to be considered nation-wide, on the basis of their longer life and the possibility for companies to transport and distribute them in areas which were distant from the packaging plants.
The operation in question would not appreciably modify the UHT milk, yoghurt and cream domestic markets, while it would be likely to impede significantly effective competition in the fresh milk market.
As a result of the merger above, Cirio, which is controlled by Cragnotti group, via the controlled CPD  (Cirio, Polenghi, De Rita) operative company managing diverse popular brands, would lead the fresh milk Latium market, with a 62.5-per-cent share at least.
At national level, by virtue of the merger, CPD would increase its market share from 20 to 27%, so that it would be higher up, to three times, compared to the market share held by the second-ranked company, Granarolo Felsinea.  
Additionally, the current shareholding into the equity capital of Tanzi family, which controls the major Italian company in the milk sector, could have appreciable negative effects on potential competition.
For the above reasons, the Authority decided to initiate an inquiry which will be concluded within 45 days of the commencing of the investigation.