COOP ITALIA-CONAD/ITALIA DISTRIBUZIONE
PRESS RELEASE
PRESS RELEASE
The Competition Authority has authorized the agreement between Coop Italia and Conad regarding their Italia Distribuzione joint venture until 2004
The Authority has authorized the agreement between Coop Italia and Conad regarding their joint venture, Italia Distribuzione, which the parties voluntarily notified, until 31 December 2004, under section 4 of the Competition Act, which permits anti-competitive agreements to be authorized for a limited period of time if they improve the conditions of supply to the benefit of consumers.
The object of the Italia Distribuzione company is to negotiate with suppliers of food and other staple commodities regarding the terms and conditions of procurement by the companies belonging to the cooperative and Conad systems.
This joint venture will have almost twice the procurement potential in dealings with suppliers than the second largest Italian procurement pool.
The Coop and Conad distribution systems have extremely large retail market shares in certain parts of the country.
The agreement was appraised bearing in mind the consequences in terms of competition on the relevant market. The Authority considered that Italia Distribuzione would reduce the degree of freedom by the Coop and Conad distribution systems to set certain aspects of their commercial policies.
During the proceedings, the parties indicated that certain parts of the agreement had been changed in order to limit the scope of the operations performed by Italia Distribuzione. These changes many referred to the freedom of the two cooperative systems to negotiate separately with suppliers. The Authority considered that these changes to the agreement reduced, but did not completely remove, the restrictions on competition.
Section 4 authorization was nevertheless granted, considering that the establishment of the joint procurement company was generally used as a means of enabling retailers to enhance their efficiency, and that as modified during the course of the proceedings, the agreement made it possible to pass on the savings made by the joint venture, which included extending the number of retail stores belonging to both chains and improving the quality of the chains' branded products for the benefit of the consumer.
During the period of authorization, the parties are required to submit information to the Authority demonstrating that the benefits identified are effectively being achieved.
Rome, 6 April 2001