Purchase of all shares in Eldum rétt ehf. by Haga hf.

This decision concerns the acquisition by Hagar hf. (hereinafter „Hagar“) of Eldum rétt ehf. (hereinafter „Eldum rétt“), which constitutes a merger within the meaning of Article 17 of the Competition Act no. 44/2005. Based on the information and evidence available at the time the statement of objections was drafted, the Competition Authority's initial assessment was that the merger would distort competition and that there was cause for intervention.

An objection document constitutes neither an administrative decision nor is it in any way binding on the competition authorities. The submission is drafted to facilitate the merger parties in exercising their right to make representations under the Administrative Procedure Act No. 37/1993 and to contribute to the making of a correct decision in the matter, cf. Article 17 of the Rules of Procedure of the Competition Authority, No. 880/2005. Should comments, explanations or new evidence provide cause, the conclusions set out in this document may be subject to change. Following the publication of the statement of objections, the Competition Authority received comments from both merger parties. In addition, the views of interested parties were sought and the Authority obtained further data and information. In light of these, and following a continued investigation, the Authority's initial assessment was revised, as outlined above. The fundamental change is that the Competition Authority has further examined the potential adverse effects of the merger and has concluded that the merging parties are not considered likely or close competitors of each other. Furthermore, the Competition Authority considers that the relevant market for combined food packages is an evolving market and that the barriers to entry are limited, partly due to easy access to suppliers.

Following the merger, Hagar will gain control of Eldum rétt, which operates in a related market, and that company's turnover will be added to Hagar's economic strength. However, the Competition Authority is of the opinion that due to Eldum rétt's limited turnover, and the consequent limited increase in the economic strength of the Hagar group, there are no grounds to intervene regarding a strengthening of Hagar's dominant position in the grocery market.

During the proceedings, the merging parties put forward proposals to address the Competition Authority's preliminary assessment of the merger's harmful effects on competition. In light of the outcome of the case, those proposals will not be considered further, but it should be noted that Hagar is bound by conditions concerning the activities of Banana, which operate in the import and sale of fruit and vegetables. These conditions stipulate equal access for Haga's companies and their competitors to Banana's products and services.

In light of the foregoing, the Competition Authority has concluded that the merger will not prevent effective competition, in accordance with Article 17(c) of the Competition Act. For this reason, there is no reason to take action regarding this merger.