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NMa: planned merger between two Dutch cooperatives has no adverse effects on farmers

Having conducted a detailed investigation, the Netherlands Competition Authority (NMa) has concluded that there are no impediments to the planned merger between Dutch farmers cooperatives Agrifirm and Cehave-Landbouwbelang. The findings reveal that, after the merger, farmers will continue to have plenty of options for buying fertilizer. The NMa has therefore granted the farmers cooperatives' application for a merger license.

Based on the investigation's results, the NMa has established that no competition problems with regard to the fertilizer market would occur as a result of the merger. Customers of the farmers cooperatives in question are price-sensitive and are able to easily switch fertilizer suppliers, which indeed have the capacity to supply these customers, if necessary.

No competition concerns
The NMa had earlier decided to launch a more detailed investigation into the planned merger's effects, because its preliminary investigation had indicated there could be competition problems with regard to fertilizer sales to farmers and market gardeners in certain parts of the north of the Netherlands, if the merger went through. If the merger resulted in insufficient competition, it could be disadvantageous for farmers and market gardeners – possibly leading to higher prices, lower service levels, or reduced selections of products. The detailed investigation, however, revealed that the abovementioned concerns would not take place on the fertilizer market. The preliminary investigation had already ruled out potential competition concerns for the cooperatives' other activities.

Gathering information
The NMa has, among things, sent out a detailed questionnaire to fertilizer end users, such as crop farmers, cattle breeders, and market gardeners. More than 1,500 of them filled out the questionnaire, the results of which will be published on the NMa's website. In addition, the NMa requested information from various fertilizer suppliers in the Netherlands.

Merger review
When reviewing mergers and acquisitions, the NMa assesses whether effective competition in the market is significantly impeded, particularly when a dominant position is created or strengthened. Such a dominant position can have adverse effects on the price, quality and range of the products or services offered on the market.