THE COMPETITION AUTHORITY HAS BEGUN AN INVESTIGATION OF THE ACQUISITION BY GRANAROLO OF THE CENTRALE DEL LATTE DI VICENZA, AND HAS PROHIBITED THE ACQUISITION BY CARREFOUR-GS OF A HYPERMARKET AT COSENZA
PRESS RELEASE
PRESS RELEASE
The Competition Authority has begun an investigation of the acquisition by Granarolo of the Centrale del Latte di Vicenza, and has prohibited the acquisition by Carrefour-GS of a hypermarket at Cosenza .
On 28 March 2001, the Competition Authority launched an investigation into the Granarolo and Centrale Latte Vicenza companies. The investigation relates to the proposed acquisition by Granarolo of the entire equity interest in Centrale del Latte di Vicenza, in order to ascertain whether the take-over might give Granarolo a joint dominant position with Parmalat, the only other fresh milk producer in Italy, on the relevant market.
On the fresh milk market in the Veneto region, Granarolo is currently the second largest producer, such that following the acquisition of Centrale Latte Vicenza it would significantly strengthen its market position, narrowing the gap with Parmalat. Taken together, these two nationwide fresh milk producers would hold a joint market share of 63.2% on the Veneto local market, leaving the rest to a small number of minor producers whose market shares are far smaller than the two nationwide producers, and who market under brands which are only known locally.
When assessing this operation, one very relevant circumstance is the fact that the two largest fresh milk producers on the Veneto market are Parmalat and Granarolo, Italy's only national fresh milk producers which pursue a parallel nationwide expansion strategy by buying-up other companies in the industry as they are put up for sale, and by entrenching their own brands and their own image.
The investigation will be completed within 45 days.
The Authority has also concluded the investigation it began on 7 February 2001 by prohibiting the acquisition by the Carrefour-GS Group of the Iperpiù company, which owns a hypermarket at Rende (Cosenza).
The Authority ruled that the acquisition would have given Carrefour-GS a dominant position that would have enabled it to substantially restrict competition between local supermarkets on a lasting basis. As a result of the notified operation, the Carrefour-GS Group, which already operates on the relevant market, would have acquired an 83 percent market share, leaving the balance to only two supermarkets which could not have brought any significant competitive pressure to bear on the company resulting from the takeover.
Rome, 2 April 2001