Agrokor complies with its commitment to divest its outlets under the decision of the CCA

The Croatian Competition Agency (CCA) accepted the second report of the trustee on the implementation of the structural divestment remedies and the conduct (behavioural) remedies in the concentration between the undertakings Agrokor/Mercator set forth in the decision of the CCA on the basis of which this concentration was conditionally approved.

In the time period from 15 January 2015 to 15 July 2015 when the second report of the trustee was concluded, Agrokor divested another 34 outlets foreseen in the decision of the CCA – six outlets were sold, 15 were leased by Agrokor while 13 were leased by the owners of these outlets. The buyers of 27 outlets are direct competitors of Agrokor.

The contracting process is under way for one outlet where the former buyers abstained from the business transaction. Subsequently a new buyer submitted its offer.

In total Agrokor divested 63 retail shops out of 96 set forth under the CCA decision. The turnover of these shops makes up for more than 60 % of the total turnover of the shops planned for divestment.

Until 30 October 2015 Agrokor has been granted permission to defer the shutting down of two outlets given that the process of divestment or lease has been in its final phase.  When this deadline expires, Agrokor must supply evidence to the trustee that it complies with this commitment.

The rest of 31 outlets have been closed by Agrokor. All closed outlets must, however, be offered to the buyers on the web page of Agrokor in the period of the following three years (until June 2018). Besides, every six months these outlets must be advertised for sale in the regional papers in the regions where they are located.

This means that Agrokor complied with the divestiture commitment as ordered in the decision of the CCA declaring the concentration in question conditionally compatible.

With respect to the conduct (behavioural) remedies in this particular case, in the period from January 2015 until June 2015 there had been no significant changes compared with the previous report period. The visibility of the products continues to comply with the remedies under the decision of the CCA. Agrokor continues to implement the measures and checks on the daily basis all relevant products, communicates with suppliers and records all changes. In situations where there are findings that a certain product would not be available, it includes a substitute product defined by the supplier in its network or, where there is no such product, it uses the second best to the substitute product from the supplier concerned.

Within the monitoring activities relating to visibility commitments the trustee visited 55 retail shops in the period from January to June 2015 – eight Mercator-H retail shops and 47 Konzum shops. The trustee found that the visibility on the shelves of competing undertakings was satisfactory and in line with the commitments undertaken within the meaning of the CCA decision.

The trustee found that Agrokor relaunched the shelve visibility metrics training programmes for its staff.

The trustee also found that Agrokor’s conduct has been in line with the recommendations made in the first report. As to the future visible output of space planning in the form of planograms the trustee suggested additional supervision in the form of physical shelf count. It has also been suggested by the trustee that Agrokor should consider the reasons why system errors occurred when three best sold products have been inspected in particular outlets and take necessary steps to rectify the issue.