NMa clears merger flower auctions

Following an in-depth investigation, the Netherlands Competition Authority (NMa) has cleared the merger between Coöperatie Bloemenveiling Aalsmeer U.A. and the Coöperatieve Bloemenveiling FloraHolland U.A.

The NMa had expressed competition concerns with regard to the proposed merger, stating it would possibly create a dominant position with regard to flower auctions in the Netherlands. However, the NMa has found on the basis of an in-depth investigation that the merger does not create or strengthen a dominant position adversely affecting competition. In addition to the combined auction organisation, a sufficient number of viable alternative channels, both at home and abroad, remain open to plant and flower growers and buyers alike, says the NMa.

Upon receiving the merger license application submitted by the auctions in April this year, the NMa commenced an extensive and wide-ranging investigation into the effects of the merger in the market for trading ornamental plants and flowers. The investigation focused on the question whether supply and demand channels bypassing the auction presented a viable alternative to growers and buyers. In the process, the NMa sent questionnaires to about 1500 growers and 500 buyers (mainly wholesalers and florists) of ornamental plants. Also, the NMa interviewed competitors, including auctions abroad and internet auctions.

The investigation established that a sufficient number of growers and buyers of ornamental plants and flowers regard alternative channels as viable options. As a result, the new auction combination cannot profitably reduce the quality of services or increase prices. If they were to do so, too many growers and buyers would turn to alternative channels, involving direct trade in particular. Market parties indicate that the trend of scale enlargement visible in the sector makes it ever more easy to enter into direct trade. Growers and buyers of ornamental plants and flowers are growing in size, which makes it easier for them to establish contact directly, no longer requiring the intermediary services of an auction. This development is expected to continue in the coming years, also causing growers to sell more ornamental plants and flowers to buyers directly in the near future.

Also, the geographical market for trading ornamental plants and flowers must be defined more broadly than the Netherlands. It at least comprises the European Union, as is apparent from the investigation. Growers as well as buyers sell and buy ornamental plants and flowers abroad. In this respect, growers have sufficient supply opportunities within Europe. Buyers have sufficient buying opportunities in the European Union, but also in Africa and Latin America.