In October 2018, the Competition Authority prohibited a merger planned through the acquisition of Lyfja og heilsu hf. by Opna ehf. (MOS Pharmacy). The Appeal Board of Competition Matters has today upheld that decision of the Competition Authority.
Lyf og heilsa operates 30 pharmacies nationwide, trading under the names Lyf og heilsa and Apótekarinn. Lyf og heilsa is one of the largest pharmacy retailers in the country. Opna runs one pharmacy in Mosfellsbær, Apótek MOS. That pharmacy was opened in mid-2016. Before Apótek MOS began trading, there was only one pharmacy in Mosfellsbær, Apótekarinn, owned by Lyf og heilsa. Today, Apótek MOS and Apótekarinn are the only pharmacies in Mosfellsbær.
The Competition Authority's investigation showed that the arrival of Apótek MOS had a very positive effect on competition in the area. Apótek MOS offered new services in the form of the shop's layout and pharmacist assistance. Its opening hours were also longer than had previously been the case in Mosfellsbær. The evidence showed that consumers welcomed this new option and that competition from Apótek MOS had a significant impact on the operation of Apótekarans in Mosfellsbær.
It was revealed in the case that Lyf og heilsa contacted the representative of Apótek MOS about a possible acquisition of the company, and an agreement was reached. Had the merger gone ahead, the competition that Apótek MOS provided to the aforementioned branch of Lyf og heilsu would have disappeared.
A study by the Competition Authority revealed that pharmacy provision in Mosfellsbær is highly localised. A study of consumer purchasing behaviour, along with other evidence, showed that consumers generally prefer to shop at pharmacies that are as close as possible to their GP surgeries or homes. This is particularly true for the elderly or in cases of urgent need for medication. Consequently, the merger of the pharmacies in question would cause their customers significant competitive harm.
Lyf og heilsa appealed the decision of the Competition Authority to the Competition Appeals Board. The panel disagreed with the company that the competition authority's investigation had been flawed or that it had misjudged the definition of the relevant market or the merger's competitive effects. The competition authority's decision was therefore upheld.
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