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08 March 2012
In February 2012 the Croatian Competition Agency cleared the Phase II review proceedings regarding the merger between Agrokor Group and Roto Dinamic.
According to the agency, the merger will result in increased market shares for Agrokor and Roto Dinamic in the distribution of alcoholic and non-alcoholic beverages via HORECA (ie, hotels, restaurants and caterers) sales channels in Croatia. However, it will have no significant anti-competitive effects, as it will neither strengthen the parties' existing position on the market nor create a new dominant position. Agrokor's market share will amount to between 20% and 30%, while Gastro Group has a market share of between 30% and 40% and remains the major player. Strong competition exists between these two competitors.
The agency established that there are no barriers to entry to the market and a significant number of competitors with different market shares are active on the market. There are approximately 10 major undertakings with market shares of between 1% and 10%, and between 100 and 150 small wholesalers with a combined market share of almost 8%.
According to the agency's review, the merger will not have significant vertical effects on the markets for bottled water and wine, because the Agrokor Group includes mineral water producer Jamnica and affiliated company Agrokor Wine. Commercial terms for the wholesale of water to HORECA distributors are applied equally to both Agrokor customers and independent customers. The agency noted that demand for water is influenced by marketing and the promotional activities of producers and importers, as well as customer loyalty to particular brands. This means that the decisive influence on sales of bottled water via HORECA channels is consumers. Jamnica's high market share throughout Croatia (between 50% and 80%) is reflected in its placement through HORECA channels, due to the fact that Agrokor supplies its competitors with these products.
Regarding the wine market, the agency established that the market share of the merging parties amounts to between 15% and 25%. Furthermore, the market is well structured in terms of the number of wine producers and importers; thus, the merger will have no negative effects on market supply or wine sales.
Finally, the agency pointed out that direct competitors of the merging parties (eg, Gastro Group, Metro C&C, Coca-Cola HBC Hrvatska, Franck, Badel 1862, Orbico, Bacom trgovina and AWT) and the Croatian Chamber of Commerce had raised no objections to the proposed transaction.
The agency concluded that the intended transaction could be declared compatible with Croatian competition law.
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Gabriele Wahl Cesarec