The Norwegian Competition Authority has warned Norgesgruppen in a Statement of Objections that it considers imposing a fine of NOK 20 million on the company for breach of disclosure requirements regarding its acquisition of grocery store premises.
Norgesgruppen acquired the premises at Sædalssvingene in Bergen in 2018, where Coop currently operates a grocery store. It is the Norwegian Competition Authority’s preliminary assessment that Norgesgruppen has not complied with applicable disclosure requirements regarding this acquisition.
An important tool in the grocery sector
The Norwegian Competition Authority has imposed disclosure requirements on grocery store chains regarding acquisitions in the grocery sector that are not otherwise notifiable according to the Norwegian Competition Act. Such disclosure requirements have been imposed on Norgesgruppen since 2014 and on other grocery store chains since 2016.
– The grocery sector is very concentrated, and acquisitions by grocery store chains that further increase concentration in local markets can harm competition. This can lead to higher prices and reduced choice for consumers. The disclosure requirements are an important part of the Authority’s control of concentrations and the structure of grocerymarkets. If the disclosure requirements are not complied with it becomes more difficult for the Authority to monitor competition in the Norwegian grocery sector in an efficient manner, says Director General Lars Sørgard.
Did not provide information within the deadline
– Norgesgruppen did not inform the Norwegian Competition Authority about the acquisition within the deadline set by the Authority. Our preliminary assessment is therefore that Norgesgruppen has breached the disclosure requirement. In order for the fine to have sufficient preventive effect, and thereby contribute to an effective control of structural changes in the grocery sector, the fine the Authority considers imposing is significant, says Director Magnus Gabrielsen.
The Norwegian Competition Authority wishes to make clear that the findings in the Statement of Objections are preliminary, and that a final decision has not yet been adopted.
– A Statement of Objections has now been presented to Norgesgruppen who will have the opportunity to submit its comments to the Authority’s objections before any decision is made, says Gabrielsen.
Norgesgruppen has been invited to submit its comments on the Statement of Objections by 20 September 2019.
Facts regarding disclosure requirements for mergers and acquisitions in specific markets:
- The Norwegian Competition Authority may impose a duty on specific market players to inform the Authority about mergers and acquisitions in individual markets where the degree of local competition is weak and/or where the market is concentrated.
- Section 24 of the Norwegian Competition Act is the legal basis for imposing firm specific disclosure requirements.
- The disclosure requirements entail that the companies concerned must provide the Authority with information about acquisitions that fall below the ordinary notification thresholds.
- Disclosure requirements are imposed because acquisitions of smaller market players may in certain markets adversely affect the competitive situation and thereby lead to higher prices and harm to consumers.
- The Authority has imposed disclosure requirements on undertakings in several markets where the degree of local competition is of particular importance. This includes among others:
- Fuel (Uno-X Energi AS, St1 Norge AS, Certas Energy Norway AS og Circle K Norge AS)
- Energy (Statkraft AS, BKK AS, Skagerak Energi AS og Agder Energi AS)
- Waste (Norsk Gjenvinning Norge AS)
- Grocery sector (Norgesgruppen ASA, Coop Norge SA, Rema 1000 og Bunnpris IK Lykke AS)
- Locksmiths (AssaAbloy Norge AS)
- Newspapers (Amedia, Polaris og Schibsted)
- Broadband (Telenor)
- Garden centres (Plantasjen Norge ASA)
- Laundry services (Nor Tekstil AS)
- The Norwegian Competition Authority considers on a continues bases whether there is a the need to impose disclosure requirements on other market players.
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