In a judgment of the Reykjavík District Court, delivered on 18 November 2024, it was concluded that the recent exemptions from competition law from spring 2024, which allow meat processing plants to merge and have specified consultations with each other, are contrary to the constitution and therefore have no legal force.
Following the judgment, the Competition Authority wrote letters to meat processing plants and their associations, dated 19 November 2024, in which they were instructed, among other things, to immediately cease any actions or conduct that might contravene competition law and has been established on the basis of the aforementioned exemption authorisations. This is discussed in more detail in the authority's press release of 19 November 2024, which is available here.
By the time the district court's ruling was handed down, Kaupfélag Skagfirðinga (KS) had acquired the shares in Kjarnafæði Norðlenska (KN), and the SAH Afurðir operation in Blönduós is owned by the latter company. In light of recent media reports concerning redundancies at the SAH Afurðir slaughterhouse, the Competition Authority has written to KS and KN, dated 4 March, reminding them of the contents of a previous letter from 19 November. In particular, it is recalled that the Authority had directed the processing plants to cease actions related, inter alia, to the mergers of processing plants.
Furthermore, the letter stresses that it may be considered whether KS's acquisition of KN complied with applicable laws, in light of the Reykjavík District Court's judgment. For the same reasons, it may be examined at a later stage whether measures taken in the companies' operations constitute a breach of competition law or of decisions by the Competition Authority. Redundancies of staff may be part of the implementation of a merger.
The Competition Authority's letter to KS is available. here .
The Competition Authority's letter to KN is available here .
As is well known, the Supreme Court of Iceland has granted the Competition Authority's request for permission to appeal, and the Authority has appealed the district court's judgment to the Court. The decision on further investigations in this regard will depend, inter alia, on the Supreme Court's ruling. The decision to appeal the court's judgment is discussed in more detail in the authority's press release, dated 2 December 2024, which is available here.
This notice draws the attention of meat processing plants and other stakeholders to the above.
UpdatedOn 6 March, KS sent a letter of response to the Competition Authority, in which the association denied the allegations of legal violations. The letter from KS is available. here.
The Competition Authority replied to KS's letter by email on 7 March. It was stated therein that the CA's letter of 4 March had been based on information from KS and KN. It had been stated by the merger parties that the merger of KS and KN had proceeded.
through last autumn. From this it inevitably follows that KS and KN are considered one
economic unit and therefore the same undertaking within the meaning of
competition law, regardless of, amongst other things, what appears to be a temporary arrangement
management within the company. In light of this and following the judgment
In its judgment of 18 November, the Reykjavík District Court had directed SE to instruct KS and KN to
Immediately halt any actions or conduct that may contravene
competition law and has been established on the basis of the exemption provisions which
The county court ruled that they had not come into force.
Before the county court ruling was delivered, it had been reported in
to the media that one effect of the merger would be the slaughter of sheep at SAH Afurðum on
The blending process would be discontinued. When it had been announced the previous week about staff redundancies
The Competition Authority considered it necessary and
It is appropriate to remind KS and KN of the Competition Authority's previous letter. In accordance
in the supervisory authority's guidance, the companies were informed that
The group's measures could be considered at a later stage.
KS's claims that the letter contains allegations or threats
in favour of KS would therefore be based on a misunderstanding. As SE's letter of 4 March had indicated, the supervisory authority had neither taken a position on these matters nor initiated
an investigation into the above. The letter, on the contrary, was sent for the benefit of all.
concerned.
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