The Romanian Competition Council (the "RCC") will amend the review of geographic market when assessing mergers in the food retail sector, due to behavioral changes of companies active on the market and of consumers – as disclosed in a study prepared by the RCC.
Until now, the competition assessment regarding hyper/supermarkets, discounters and other similar stores (such as vicinity/proximity stores) was based on areas delimited by a 10-30 minutes driving distance around the acquired stores.
According to this study, the RCC proposes a segmentation between:
- proximity stores (under 400 sqm) - their offer is generally constrained by the offer of other proximity stores, located within an area of up to 10 minutes walking distance and by the offer of other stores with premises larger than 400 sqm, located within an area of up to 10 minutes driving distance; and
- medium and large stores (over 400 sqm) - super/hypermarkets/discounters - their offer is constrained by the offer of other stores with premises under and over 400 sqm, located within a geographic area of up to 10 minutes driving distance.
Thus, all existing stores (small and large) within the 10 minutes driving distance will be considered when assessing the relevant market of a store larger than 400 sqm.
In case a proximity store is under assessment, other proximity stores (under 400 sqm) located within a 10 minutes walking distance will be considered, as well as medium and large stores (modern trade) located within a 10 minutes driving distance from said proximity store.
As a result, once the new assessment rules are applied, it may be anticipated that conditions for authorizing transactions which involve the overlapping of stores within the 10 minute distance will be more difficult to fulfill.
However, the actual definition of the relevant geographic market may differ depending on the local geographic markets, the territorial distribution of the stores, their different premises in each local market and other relevant local elements - all of which are to be assessed by the purchaser on a case by case basis.
The RCC study is available here and interested parties may submit comments/observations with the RCC within 30 days as of the publishing date (i.e., 30 October 2017).