Í News Yesterday's Business Journal reported on the grocery retail sector in Hella and spoke with the mayor of Rangárþing Ytra, Jón G. Valgeirsson. The report incorrectly states that the company Festi, which operates stores under the Krónan brand, cannot open a store in Hella as long as a agreement. Festi's merger with N1 in 2018 was reviewed by the Competition Authority.
An investigation into the 2018 merger between N1 and Festi revealed that the merger would harm competition in the sale of groceries in the area around Hella and Hvolsvöllur, where almost all grocery sales in the area would be in the hands of Festi following the merger. Festi would therefore have the power to raise prices and reduce services in the area, such as by shortening opening hours. A survey of customers of the area's shops supported this conclusion.
In response to this situation, Festi proposed selling the Kjarval store in Hella. It emerged during the proceedings that Festi's premises in Hella were unsuitable for a larger grocery store (a discount supermarket like Krónan). Consequently, there was no discount supermarket in Hella at the time.
The Competition Authority approved this proposal from Festi. The conditions of sale required that the buyer operate a store comparable to Kjarval in the premises. On this basis, Samkaup acquired the business, and the new store, Kjörbúðin, was considered comparable to the existing one.
It should be emphasised that nothing in the settlement prevents Festi, or other grocers, from opening a discount grocery store in Hella. Under the settlement, Festi undertook solely not to buy or lease the same premises for 10 years from the sale of the Kjarval store. The agreement therefore does not limit Festi's ability to open a discount supermarket in other suitable premises in the area.
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