The Norwegian Competition Authority has today imposed a fine of 20 million NOK on Norgesgruppen for the infringement of disclosure requirements related to an acquisition of grocery store premises.
On 16 January 2018, Norgesgruppen acquired the premises of a grocery store at Sædalssvingene in Bergen, Norway. Both then and now, Coop operates a grocery store at that location. According to the disclosure requirements, Norgesgruppen should have informed the Competition Authority of the acquisition within three working days after the conclusion of the agreement. The acquisition was only notified to the Authority on 17 April 2018.
– The fact that the disclosure requirements were not complied with is taken seriously by the Authority. The disclosure requirements are an important part of the Authority’s monitoring of the grocery market. Such requirements alert us of acquisitions and make it possible for us to intervene if transactions are harmful to competition, says Deputy Director Beate Berrefjord.
According to the Competition Act, a fine may be imposed if a company does not comply with requirements to disclose relevant information to the Competition Authority.
Disclosure requirements have been imposed on all grocery store chains in Norway in respect of acquisitions relating to the distribution and sale of groceries. The reason for imposing such requirements is that also smaller acquisitions falling below merger notification thresholds, may cause harm to competition at the local or national level. Disclosure requirements cannot be regarded as burdensome for the companies concerned, as they only need to disclose the identity of the acquired company and when the transaction will be implemented.
– It is important that the grocery store chains comply with disclosure requirements so that the Authority can identify structural changes in the grocery market and assess whether or not the Authority should oblige the acquirer to notify the transaction. When the required information is submitted as late as in this case, the Authority can no longer require the transaction to be notified under the Competition Act. In a worst case scenario, such delays may prevent the Authority from intervening against harmful acquisitions, says Director General Lars Sørgard.
During the last years, the Competition Authority has observed an increased concentration at several levels of the value chain in the Norwegian grocery market. It is against that background disclosure requirements have been imposed with regard to all acquisitions by the grocery chains in the grocery market. Acquisitions of grocery store premises are covered by the disclosure requirements, even if the acquiring firm does not take over the operation of the grocery store at the premises in question.
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Disclosure requirements for mergers and acquisitions in specific markets
– The Authority may impose disclosure requirements on individual firms with regard to mergers, acquisitions and agreements by which they acquire control of other companies in specific markets where competition is weak and/or markets concentrated.
– Section 24 of the Competition Act is the legal basis for issuing disclosure requirements.
– Disclosure requirements ensure that the Competition Authority is made aware of acquisitions by the operators concerned, even if the regular notification thresholds are not met. Such information will enable the Authority to assess whether it is appropriate to require notification of these transactions.
– Disclosure requirements are useful because, in some markets, also acquisitions of smaller businesses may affect competition negatively and lead to higher prices and lower quality for consumers.
The Authority has imposed disclosure requirements in markets where the degree of local competition is of particular importance.
–Currently, the following market players are required to inform the Authority about mergers and acquisitions:
• Motor fuel retailing: Uno-X Energi AS, St1 Norge AS, Certas Energy Norway AS and Circle K Norge AS
• Electricity generation: Statkraft AS, BKK AS, Skagerak Energi AS and Agder Energi AS
• Waste management and recycling: Norsk Gjenvinning Norge AS
• Grocery store chains: Norgesgruppen ASA, Coop Norge SA, Rema 1000 and Bunnpris IK Lykke AS
• Locksmith services: AssaAbloy Norge AS
• Newspapers: Amedia AS, Polaris Media ASA and Schibsted ASA
• Broadband services: Telenor ASA
• Home security systems: Verisure AS and Sector Alarm Group AS
• Laundry services: Nor Tekstil AS
• Garden centres: Plantasjen Norge ASA
• Suppliers of concrete: Nordic Concrete Group AS, Heidelberg Cement Norway AS and Unicon AS
• Accounting systems: Visma AS
The Norwegian Competition Authority is continuously assessing whether there is a need to introduce disclosure requirements for additional market players and in other markets.