The Norwegian Competition Authority prohibits Umoe Restaurants AS from buying Dolly Dimple’s Norge AS. The reason is that the acquisition will lead to significant restriction of competition in the markets of restaurants and take-aways.
Umoe Restaurants AS, the owner of Peppes Pizza, has entered an agreement to buy Dolly Dimple’s. Peppes Pizza and Dolly Dimple’s are currently the only two nationwide chains operating both in the restaurant and take-away markets.
– Peppes Pizza and Dolly Dimple’s are close competitors, and the competitive pressure between them will disappear if they have the same owner. This can lead to increased prices for pizza and lower quality for consumers, says Director General Lars Sørgard.
The Competition Authority shall stop mergers that lead to a substantial restriction of competition. To assess the competitive situation in local and national markets, the Authority has, inter alia, interviewed customers in several of the merging parties’ restaurants, as well as performed a web-based survey among a selection of the parties’ customers.
– The acquisition will lead to reduced competition both nationally and in 20 local markets. Peppes Pizza will gain increased market power that could lead to harm to consumers, says Director Magnus Gabrielsen.
Peppes Pizza has proposed remedial measures to limit the acquisition’s harm to competition.
– The Competition Authority has assessed the proposed measures, and has concluded that they were insufficient to satisfy the Authority’s concerns, says Gabrielsen.
The Competition Authority’s decision is sent to the parties today.