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Further investigation necessary into acquisition in cow-calf sector

Dutch veal producer Van Drie Group wishes to acquire Van Dam. The Netherlands Authority for Consumers and Markets (ACM) wishes to conduct a further investigation into the acquisition’s effects on, for example, dairy farmers and other slaughterhouses than those of Van Drie Group. Van Drie Group is active in the entire veal sector, and its activities include calf procurement, forage for calves, calf husbandries, slaughterhouses, and selling (including export) of veal. Van Drie Group is the market leader in the cow-calf sector, while Van Dam is mostly active as calf trader and in calf husbandries.

The cow-calf sector

The Netherlands occupies a key position in the European veal production sector. Dairy farmers sell their young calves to, among other companies, veal husbandries. Besides calves from the Netherlands, calves from other parts of Europe are also imported to be fattened and slaughtered here. The majority of veal is then re-exported, mainly within Europe. Many developments are taking place in the cow-calf sector at the moment, for example, with regard to sustainability and animal welfare.

What are the next steps?

If both companies decide to continue with their acquisition plans, and file an application for an acquisition license with ACM, ACM will launch a follow-up investigation into the effects of this planned acquisition. A further investigation will then be conducted into the various markets in the cow-calf sector. ACM wants to know what effects the acquisition has on the positions of dairy farmers, Van Drie Group, and Van Dam’s competitors, and on the selling of fattened calves to slaughterhouses.

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

With any merger or acquisition, there is the question of whether sufficient competition will remain on that market, right after the transaction as well as in the future. 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 merge or acquire another company. ACM assesses whether the markets involved will continue to work well for people and businesses, now and in the future.