NMa conditionally clears merger between Dutch manufacturers of frozen food snacksThursday, 27 September 2012
The two biggest convenience food manufacturers in the Netherlands, Buitenfood (with its flagship brand Van Dobben) and Ad van Geloven (with its flagship brand Mora), are allowed to merge. The product range of both manufacturers include popular, traditional Dutch frozen food snacks, such as kroketten (cylindrical-shaped, deep-fried battered snacks containing ragout) and bitterballen (similar to kroketten, but then smaller and spherical-shaped). One of the conditions attached to this merger is that Buitenfood is required to transfer to a competitor for a period of six years the license for selling the brand Van Dobben forkroketten and bitterballen to supermarkets. That competitor must change (rebrand) the Van Dobben brand for these two snacks. With this condition, it is prevented that too little competition remains after the merger with regard to the products available to supermarkets and consumers. Less competition could lead to higher prices and/or less quality, according to the Netherlands Competition Authority (NMa).
After that six-year period, the license holder and the merged undertaking can no longer use the brand Van Dobben when selling to Dutch supermarkets. In addition, the merged undertaking is not allowed to sell the abovementioned snacks to Dutch supermarkets that resemble the original Van Dobben products. Buitenfood and Ad van Geloven, however, are allowed to use the brand Van Dobben when selling frozen food snacks to wholesalers and the hospitality industry (the so-called out-of-home channel). The NMa does not see any antitrust issues arising on these markets as a result of the planned merger.
An investigation carried out by the NMa had revealed that the new undertaking would become too big in the supermarket segment forbitterballen and kroketten. The merger would eliminate competition between Buitenfood-produced branded kroketten and bitterballen and Ad van Geloven-produced branded and generic-brand kroketten and bitterballen. Furthermore, the NMa was concerned whether other competitors that produce these snacks for supermarkets would be sufficiently able to compete with the merged undertaking. Finally, there was a risk that supermarkets would not be able to do much if the new manufacturer decided to permanently and profitably raise the prices of these snacks.