NMa Approves Acquisition of Slachthuis Groenlo by Dumeco

Following an investigation, the Netherlands Competition Authority (NMa) has given its approval for the acquisition of the abattoir, Slachthuis Groenlo, by Dumeco, a subsidiary of the Sovion group. Both parties are active in area of the slaughtering pigs and the further processing and sale of pork. According to NMa, there is no reason to assume that competition on the procurement markets for pigs for slaughter will be significantly restricted as a result of the acquisition. Sufficient competition will be retained, as sufficient alternative abattoirs will remain for both pig farmers and pig traders to offer pigs for slaughter.

In its investigation, NMa draws the conclusion that the procurement markets for pigs for slaughter extends beyond the Netherlands. This is due to the considerable and increasing export flows. On the basis of its own investigation, NMa concludes that a greater price differential between the Netherlands and Germany will result in an increase in exports to Germany. In addition, there is sufficient capacity in Germany to slaughter more Dutch pigs. The relatively lower cost of exporting pigs is not an obstacle to exports to Germany by pig farmers and pig traders due to the slightly higher prices in other countries.

In line with a recent decision by the European Commission, NMa concludes that the relevant geographical market for the procurement of pigs for slaughter is an area with a radius of 150 km around the three most important pig farming areas in the Netherlands, namely the province of Noord Brabant and the northern part of the province of Limburg, the province of Twente and the eastern border region known as the 'Achterhoek'.

The joint market shares of the companies do not make it plausible that a dominant position may arise or be strengthened on the markets for the procurement of pigs for slaughter. After the acquisition, Sovion's market share on the markets for the processing and sale of pork will be such that it will not be plausible that a dominant position may arise or be strengthened.