ACM: further investigation needed into acquisition of Unox by Zwanenberg

Having conducted a preliminary investigation, the Netherlands Authority for Consumers and Markets (ACM) has decided that a further investigation is needed into the planned acquisition of Unox by Zwanenberg. Both Zwanenberg and Unox sell smoked sausages and ambient wet soups, among other products, to supermarkets. ACM sees a risk that the acquisition can result in price increases. ACM wishes to investigate that risk further.

Zwanenberg predominantly produces private-label products for supermarkets. These are products that Zwanenberg produces by order of supermarkets, and which supermarkets sell under their own brands. Unox is a well-known brand in the Netherlands in the markets for canned-meat products (such as smoked sausages) and ambient wet soups. Unox only sells products under its own brand. At the moment, Zwanenberg already produces a large share of Unox’s products. After the acquisition, Zwanenberg will become owner of the Unox brand, and will also take over the sale of these products to supermarkets.

Stronger bargaining position

ACM’s preliminary investigation has revealed that Unox holds a key position in the markets for canned-meat products and ambient wet soups. For supermarkets, it is important to be able to offer Unox products, because many people are often brand loyal. If supermarkets do not carry these products, they might go to other supermarkets. Unox’s most important competitors are probably the private-label products of supermarkets, a market segment where Zwanenberg is a major competitor. On the basis of its preliminary investigation, ACM sees the risk that, by acquiring the Unox brand, Zwanenberg gains too strong a bargaining position vis-à-vis supermarkets. As a result, people could face higher prices of smoked sausages, for example.

Procedure

Businesses that wish to make an acquisition must notify ACM thereof if they exceed certain turnover thresholds. ACM subsequently assesses whether the acquisition will have any negative effects on people and businesses, for example, higher prices, reduced quality, or less innovation. On the basis of the preliminary investigation, ACM may decide that an in-depth investigation is needed is. That is the case here. If Zwanenberg and Unox wish to go through with their acquisition plans, they will have to apply for a license with ACM.

ACM’s concentration control: mergers, acquisitions, and joint ventures

With any merger, acquisition, or joint venture, there is a question of whether sufficient competition will remain on that market right after the concentration as well as in the subsequent years. Competition ensures that products are of high quality, and that they are offered on the market at competitive prices. Competition also promotes innovation. That is why ACM decides in advance whether or not companies are allowed to join forces. ACM assesses whether the markets involved will continue to work well for people and businesses, now and in the future.

See also

• Mergers, acquisition, and joint ventures | ACM (in Dutch)