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Last updated on 07 Aug, 2020

Concentrations | Decision

 

COMP/MCCAA/01/2020 - Full-function Joint Venture between Retail Marketing Limited and Co-op Trading Company Limited, Polrem Limited, S. Borg & Sons Limited, Tower Supermarkets Complex Limited, Valyou Pendergardens Operations Ltd., Belleview Supermarkets Co. Ltd. and Valyou Supermarket Limited (Phase 2 determination)

 

On 30 December 2019, the Office for Competition within the Malta Competition and Consumer Affairs Authority received a notification of a proposed concentration by which Retail Marketing Limited will itself take over all supermarket operations currently being conducted by Co-op Trading Company Limited, Polrem Limited, S. Borg & Sons Limited, Tower Supermarkets Complex Limited, Valyou Pendergardens Operations Ltd., Belleview Supermarkets Co. Ltd. and Valyou Supermarket Limited.

Following an extensive full (Phase 2) investigation, which included Requests for Information from the parties, written and oral submissions from the parties, engagement with a number of third parties, including customers and competitors, the Office for Competition on 5th June 2020, declared the proposed full-function joint venture lawful in terms of the provisions of the Control of Concentrations Regulations, 2002.

During the initial market investigation, the Office for Competition had serious doubts that the proposed concentration could prima facie limit competition in the grocery retail market. The Office for Competition identified possible competition concerns arising from the proposed concentration, specifically concerning the possibility of a substantial lessening of competition when defining the relevant geographic market at a local level, attributed to the reduction in the number of independent grocery retail stores. According to its preliminary assessment, the Office for Competition identified the Sliema – St. Julian’s area and the Qawra – Mellieħa area to be relatively more concentrated in terms of the grocery stores involved in this concentration when compared to the other local geographic markets. Given the lack of data available to assess these concerns, the Office for Competition noted that the above arguments were being submitted on a prima facie basis and therefore, a detailed investigation was warranted to verify the concerns which the proposed concentration may bring about.

A phase 2 investigation was officially initiated on 13 February 2020. The objective of the investigation was for the Office to decide whether the proposed concentration, if implemented, will result in the creation of a relevant concentration situation and if so, whether the creation of that situation may be expected to result in an SLC within any market or markets in Malta.

The Office for Competition carried several data collection exercises in order to be able to assess the identified competition concerns, including a demand-side survey with active customers in the Maltese grocery retail market and two Requests for information with all undertakings operating in this sector. Following detailed consideration and analysis, the Office for Competition declared the concentration lawful in terms of regulation 6(1)(ii) of the Control of Concentrations Regulations.

The full non-confidential version of the decision can be accessed here.

 

 

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