The Italian Competition Authority clears a large concentration in the grocery market

In the case C11959 Carrefour/53 Punti Vendita Billa the Italian Competition Authority (ICA) has unconditionally cleared, after the I Phase investigation, the acquisition of 53 Billa supermarkets by Carrefour. The decision is a good illustration of the ICA practice to appraise concentrations between retailers.
By the notified transaction Carrefour intended to buy from Billa 53 grocery shops with different size, all of them were located in Northern Italy. The ICA identified the relevant product market affected by the concentration in the market for distribution of general food products and non food products. Then it divided this broad market in further segments on function of the type of shops and cross-substitutability among such shops. Therefore, the ICA identified the market of 'superettes', a small department store, including shops lower than 1.500 sq. meter. It also identified the market for 'hypermarkets' including shops with larger than 1.500 sq. meter and the market for 'supermarkets' which includes the other types of grocery shops. As for the geographical dimension of the relevant markets is concerned, the ICA said that the above markets are local in scope and their dimension coincide with the territory of a province.
That said, the ICA held that in none of the province affected by the transaction, the merged entity would have a relevant market share that may threat the health of competition in the relevant market. In many provinces the implementation of the transaction would lead to a slight increase of the Carrefour's market shares, while in others the largest player was a competitor of the entity resulting from the merger.

Therefore, the ICA concluded that the proposed merger would not restrain competition and gave it an unconditional go-ahead.

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