PARMALAT/EUROLAT
PRESS RELEASE
PRESS RELEASE
ANTITRUST OBLIGES PARMALAT TO DIVEST MATESE AND TORRE IN PIETRA BRANDS
The Italian Competition Authority, at its meeting of 30 June 2005, decided to call upon the Parmalat company to divest itself of two brands, Matese and Torre in Pietra, in order to re-establish competitive conditions in the fresh milk markets in Latium and Campania.
This decision results from the Authority’s previous resolution of 27 January 2005 when Parmalat was found in violation of the measures imposed in July 1999 as conditions for authorizing the Parmalat/Eurolat merger. Specifically, the Authority determined that after the date of the resolution of 27 July 1999 and at the end of the period foreseen for fulfilling the conditions imposed, Parmalat, through companies associated with the group, maintained control of the brands and the factories which were supposed to have been sold: these had been merged into a company called Newlat. In the light of the above facts, the Authority found it necessary to impose measures which would re-establish competitive conditions in the markets affected by the Parmalat-Eurolat merger.
Based on the evidence at its disposal, the Authority determined that, consequent upon its merger with Eurolat, Parmalat acquired a dominant position in the fresh milk markets in Latium and Campania. This position, which it still maintains, has allowed the group to conduct its affairs with scant regard for competitors and consumers. In particular, there has been an increase in prices in Campania.
Hence the Authority found it necessary, in order to re-establish fair competition in the fresh milk markets in Latium and Campania, to oblige Parmalat to sell, to one or more purchasers having proven experience and independent of the Parmalat group, the brands Matese and Torre in Pietra, including the entire production lines making up the brands and, should the purchasers so desire, the currently unused production facilities in Frosinone and Paestum-Capaccio Scalo.
The Authority’s measures take into account Parmalat’s downsizing in the markets in question and more generally at a national level, and are proportional to the effects produced by the merger on the market structure and prices for fresh milk in Campania and Latium.
Rome, 30 June 2005