As a result of changed consumer trends and retailers’ conduct, the Romanian Competition Council will redefine the relevant geographical market when considering mergers and acquisitions on the retail food trading market.
The Competition Council has recently indicated that, when analysing the relevant market of a store with an area exceeding 400 sqm, it will consider all other stores (irrespective of size) within a 10-minute drive of the relevant store.
Alternatively, when analysing a proximity store, the Competition Council will take into account all other proximity stores (i.e. less than 400 sqm in area), within a 10 minute walk from the relevant store, as well as any medium-size and big stores operating within a 10 minute drive of the analysed store.
It may therefore be unlikely that the Competition Council will authorise transactions involving stores within a less than 10 minutes (walk/drive, as the case may be) radius.
This shift in approach by the Romanian Competition Council is based on its recent survey of the food-trading sector, which revealed that Romanian consumers are more inclined to shop in modern trade stores (supermarkets), while smaller/neighbourhood stores and food markets are less preferred.
The same analysis showed that, with respect to proximity shores (which carry a basic but a relatively limited variety of goods addressing urgent needs) consumers would be amenable to a 10-minute walk to the next proximity store. On the other hand, for larger stores (over 400 sqm), the survey showed that shoppers chose a personal car as a means of transport, and are willing to allocate up to 10 minutes for travelling to the location.
Until now, in its analysis of economic concentrations on this market, the Romanian Competition Council had determined the relevant geographic market by applying a 10-30 minute drive radius around the relevant store.