Competition is the driving force of a market economy. It encourages price and cost reductions, innovation and improvements in quality. The role of the Office for Competition within the Malta Competition and Consumer Affairs Authority is to ensure that competition in the market is not distorted and that markets operate as efficiently as possible, thereby contributing to the welfare of consumers.
On December 30, 2019, the Office for Competition received a notification of a proposed concentration by which Retail Marketing Limited will itself take over all supermarket operations currently being conducted by the supermarkets outlined in Table 1.
During the initial market investigation, the Office for Competition identified possible competition concerns arising from the proposed concentration. These concerns included the possibility of a substantial lessening of competition as the proposed concentration may have resulted in a reduction in the number of independent grocery retail stores in specific geographic areas.
According to its preliminary assessment, the Office for Competition identified the Sliema-St Julian’s area and the Qawra-Mellieħa area to be relatively more concentrated in terms of the grocery stores involved in this concentration when compared to the other local geographic markets.
Given the lack of data available to assess these concerns, the Office for Competition noted that the above arguments were being submitted on a prima facie basis and, therefore, a detailed investigation was warranted to verify the concerns which the proposed concentration may bring about.
A detailed investigation was warranted to verify the concerns
In line with the Control of Concentrations Regulations, an in-depth (phase 2) investigation was officially initiated on February 13. The objective of the investigation was for the Office for Competition to decide whether the proposed concentration, if implemented, will substantially lessen competition within any market or markets in Malta.
The Office for Competition carried several data collection exercises in order to be able to assess the identified competition concerns. This included a representative demand-side survey with active customers in the Maltese grocery retail market and requests for information both from the parties involved and from the grocery retail outlets operating in this sector.
Following an extensive analysis of this data, the Office for Competition declared on June 5 that the proposed full-function joint venture will not substantially lessen competition and, therefore, is lawful in terms of the provisions of the Control of Concentrations Regulations, 2002. This is the first phase II investigation published by the Office for Competition.
Further details on the investigation are available on the MCCAA website at www.mccaa.org.mt. Any relevant queries may be sent either by e-mail on info@mccaa.org.mt or by calling on 2395 2000.
This information has been provided by Gilmour Camilleri, director communications, Energy, Transport and Financial Services, Office for Competition, MCCAA.
Disclaimer: This article is for information purposes only and cannot be seen as a substitute to the full decision which can be accessed from the above-mentioned website.
Odette Vella, Director, Information and Research Directorate
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