The Competition Council has authorised, with conditions, the transaction by which Delhaize “The Lion” Nederland B.V. (Mega Image) takes over Profi Rom Food S.R.L.
As a result, Mega Image must fulfill a series of structural and behavioural commitments to remove the competition concerns identified both in its relationship with suppliers and on the local market of retail trade of current consumer products, mainly food, through stores.
“This is the largest transaction in the food trade sector that we have investigated and we have imposed unprecedented measures on a national level, but which are inspired by European practice. Food trade is a priority sector for us. We have had numerous interventions in this area, both by applying fines and by carefully monitoring and analysing mergers and acquisitions. Our aim is to maintain a strong competitive environment, so that prices, which are currently, on average, the lowest in the Union, do not increase. European Union, despite inflationary pressures”, declared Bogdan Chirițoiu, President of the Competition Council.
Thus, Mega Image must implement procedures that include the rules for listing and delisting suppliers within the Mega Image/Profi network, regardless of whether they sell food or non-food products. Mega Image undertakes to apply to all Mega Image and/or Profi suppliers a procedure that establishes the conditions for access to the stores of the two networks, as well as the conditions that they must meet in order not to be delisted.
At the same time, clear deadlines will be provided regarding delisting and the obligation to notify suppliers. At the same time, Mega Image will implement a special procedure for relevant suppliers, namely those suppliers that deliver products in a proportion of over 20% of their turnover to the two networks involved.
Thus, it undertakes not to delist/remove their products from the network, except under certain clearly established conditions, which include legal provisions, or in the event that the products become irrelevant on the market, the demand for them decreasing substantially.
The procedure related to all suppliers will apply indefinitely, and that related to relevant suppliers will apply for a period of 2 years from the completion of the transaction for suppliers who deliver between 20%-30% of their turnover and 3 years for suppliers who deliver over 30% of their turnover in 2023 or 2024.
At the same time, Mega Image undertakes to send relevant suppliers an estimate of the volumes it anticipates it could purchase from each, in the next 12 months.
In order to ensure additional protection for relevant suppliers, upon implementation of the transaction, Mega Image must maintain the commercial conditions they benefit from for the year 2025. In this way, dependent suppliers will be able to reconfigure their commercial activity, seek other options for marketing products and try to reduce the degree of dependence.
Mega Image must also divest 87 stores in 44 localities where Mega Image and Profi activities overlap and could lead to a reduction in consumer choice, thus eliminating any possible concerns of the competition authority. In addition, Mega Image will allow unrestricted access to any party interested in renting/subletting/purchasing commercial spaces in certain affected areas for which the resulting entity will cease its activity, if applicable.
The action will be carried out through a real estate agency independent of the parties, which will offer the respective space to any interested parties, regardless of their commercial activity (including food retail activity) and will ensure prior publicity of this initiative.
“We received many observations regarding this transaction and took them into account, forcing Mega Image to adopt measures to protect all suppliers, thus complying with the provisions of the European Directive on unfair commercial practices in the supply chain, transposed by Law 81 of 2022. In this way, over 600 suppliers of the Mega Image and Profi networks, most of them medium and small, will be able to benefit from special protection procedures,” the president of the Competition Council also declared.
In order to monitor compliance with the behavioral commitments assumed, Mega Image proposed the appointment of a trustee in charge of monitoring, who will submit reports to the Competition Council on how the commitments are implemented. In order to ensure that Mega Image complies with its commitments, the Competition Council’s decision includes conditions and obligations, the fulfillment of which can eliminate competition concerns