Zagreb, 30 December 2009 - The Croatian Competition Agency (CCA) decided not to oppose the concentration between the connected companies within the AGROKOR Group and a couple of companies within the former MLINAR Group. In other words, the company KONZUM d.d.(member of the AGROKOR Group) acquired control over the company ŽITNJAK d.d., whereas the company BELJE d.d. gained a controlling interest in the companies MOSLAVKA KUTINA d.d. and TVORNICA STOČNE HRANE POPOVAČA d.o.o.

The decision of the Agency marks the closure of a rather complex proceeding initiated by the notification of a planned concentration between the undertakings Agrokor and Mlinar in January 2009. However, before the said compatibility assessment of the planned concentration between Agrokor and Mlinar was closed, Agrokor in the meantime had decided to reduce the scope of the notified concentration, i.e. after it had assigned the parts of the Mlinar Group to its companies (Žitnjak to Konzum, Moslavka and Tvornica stočne hrane Popovača to Belje), Agrokor sold its shares which it held in the company Mlinar to PEKARA KRUNA d.o.o. from Osijek. These changes in the ownership structure resulted in a new notification of concentration which had to be submitted in accordance with the request of the Agency.

In the compatibility assessment proceeding the CCA defined the following relevant markets as markets on which the implementation of this concentration due to overlapping activities of its parties might have possible significant effects on competition: the wholesale groceries market in the territory of the Republic of Croatia and the retail markets in the territory of the City of Zagreb and Sisak-Moslavina County. The analyses showed that the implementation of the said concentration would increase the wholesale market share of the undertaking Konzum by less than 1 per cent which would result in the market share of some 40 percent to 50 per cent.

This concretely means: in the retail groceries market of the City of Zagreb the market share of Konzum in hypermarkets and supermarkets will increase by less than 0.5 per cent. It will then hold 30 per cent to 40 per cent market share in this relevant market. In the retail groceries market its market share in small shops and self-service stores will rise between 2.5 per cent and 3.5 percent and its market share will then be between 45 per cent and 55 per cent (this does not include small traders engaged with retail whose data are not available). Yet, in accordance with the economic analyses carried out by the CCA the market concerned is open and dynamic; there are no entry barriers which would prevent new entrants to enter this market. Thus, the increase of Konzum's market share will not significantly impede competition in Zagreb retail market where a large number of competitors are active. The data speak of 48 big retailers and some 870 small retailers in the territory of the City of Zagreb in 2008. The decision of the CCA also took into account the investment Konzum announces to make in the modernization and introduction of new technologies in the acquired shops and the fact that it maintains a network of small neighbourhood shops. Such a policy is to the benefit of the elderly consumers, disabled or those who do not drive etc.

In the territory of Sisak-Moslavina County the market share of Konzum will increase by less than 1 per cent which will keep this retailer in the fourth place in this relevant market with the market share between 5 per cent and 10 per cent.

Finally, the market share of Konzum in the groceries retail market in the territory of the Republic of Croatia will remain the same: between 20 per cent and 30 per cent.

In the same session the CCA decided also not to oppose the concentration between the undertakings M SAN ulaganja d.o.o. and ŽITO d.o.o. who acquired control over the undertaking PPK VALPOVO d.d. Although the merger concerned could produce potential effects on the stock feed market, wheat meal market and fresh pork market in the territory of the Republic of Croatia, the CCA established that the market share of Žito in these markets will only insignificantly rise and will not exceed 10 per cent on any of the markets concerned.