OFFICE OF COMPETITION AND CONSUMER PROTECTION
Department of International Relations and Communication
THE OCCP DECISIONS ON MERGERS
The President of the OCCP banned two transactions: the takeover of Koltram by
Cogifer Polska, and the takeover of Gellwe from FoodCare by Rieber Foods Polska. This
year the Office has already issued 66 decisions on mergers.
[Warsaw, 8 October 2009] Pursuant to the Act on Competition and Consumer Protection,
intention of merger is subject to the obligation to notify, if the aggregate turnover of undertakings
participating in the merger exceeds EUR 1 billion worldwide or EUR 50 million in the territory of
Poland in the financial year preceding the year of the notification. The OCCP is entitled to examine
the market consequences of mergers and acquisitions, and even to stop transactions which may
permanently disturb competition. Having assessed a given transaction, the President of the OCCP
may clear it, make it subject to additional conditions or prohibit it altogether.
The President of the OCCP may prohibit a given merger if, it results in a significant impediment to
competition in the market, in particular by the creation or strengthening of a dominant position. This
notion refers to the position of the undertaking which allows it to prevent the efficient competition
within a relevant market thus enabling it to act in a significant degree independently of competitors,
contracting parties and consumers. Significant competition restriction is expressed by factors such as
e.g. disproportionately low market power of remaining competitors or recipients, lack of productive
capacity available to market participants other than participants of the merger, existing barriers in
entering the market (legal restrictions, commonly concluded long-term contracts, specific consumer
habits).
The two transactions examined recently by the OCCP are related to significant competition
restriction. In the first case, Kolejowe Zakłady Nawierzchniowe Cogifer Polska applied for taking over
Koltram. The basic scope of activities of the entrepreneurs is production of track turnouts – devices
designed for changing a direction of track vehicles from one track to another.
After carrying out merger proceedings, the President of the OCCP decided that as a result of taking
over Koltram by Cogifer competition on the national market of selling track turnouts and railroad
sidings, including parts of these turnouts, will be significantly restricted.
The President of the OCCP took into consideration, above all, the market structure. At present three
entities operate on the market. After merger, there would be two entities, with a greater advantage of
the merged Cogifer and Koltram. Moreover, high cost of entering the market and legal barriers
significantly restrict the occurrence of potential competitors.
Competition restriction which would result from the merger, would significantly hinder
the possibility of negotiating of conditions of order by recipients of turnouts. Therefore,
OFFICE OF COMPETITION AND CONSUMER PROTECTION
Department of International Relations and Communication
the President of the OCCP issued a decision prohibiting the takeover of Koltram by
Kolejowe Zakłady Nawierzchniowe Cogifer Polska.
The second proceedings carried out by the Office referred to the takeover of FoodCare by Rieber
Foods Polska, related to the production of Gellwe products, by Rieber Foods Polska. These
entrepreneurs operate in food industry. The first entrepreneur belongs to the Norwegian Rieber&Son
group and operates in Poland under the brand of Delecta., whereas FoodCare is the owner of such
brands as Gellwe, Tiger and Fitella.
While analyzing the merger the President of the OCCP decided that giving consent for the
transaction would lead to a significant competition restriction on national markets of trading
powdered whipped cream, instant cakes, dessert topping, baking powder, vanillin sugar, baking soda
and cooking essences – each of these products is considered as a separate relevant market. On each
of these markets Rieber would gain a dominant position.
While issuing the decision prohibiting the merger, the President of the OCCP took into
account existing barriers that restrict entering the market. High costs of entering the
market and brand loyalty significantly restrict the occurrence of potential competitors.
Moreover, in September 2009, the President of the OCCP issued six consents to carry out
transactions. One of them concerned taking over Cefarm Bialystok by Farmacol. These entrepreneurs
operate in pharmaceutical industry. The activities of the taking over company – Farmacol – include
retail, wholesale and pre-wholesale of pharmaceutical products. Pharmacies, hospitals and wholesale
companies are recipients of medicines. Farmacol owns, directly or indirectly, several subsidiaries. The
company which was taken over has its own chain of pharmacies and cooperates with unrelated
pharmacies across Poland.
Pursuant to the decision of the President of the OCCP, Farmacol will be able to take over Cefarm
Bialystok – a company owned by the State Treasury operating in the same industry.
At the same time we would like to inform you that since May 2009 information concerning all merger
proceedings carried out by the OCCP can be found on the OCCP website.
Additional information:
Małgorzata Cieloch, Spokesperson for the OCCP
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Tel. (+ 48 22) 827 28 92, 55 60 106, 55 60 430
Fax (+ 48 22) 826 11 86
E-mail: [email protected]