ACM clears acquisition of acquisition of three floriculture-product transport companies by Dutch cooperative Royal FloraHolland

The Netherlands Authority for Consumers and Markets (ACM) has cleared the acquisition of three transport companies specialized in the handling of flowers and plants by Royal Flora Holland (RFH), a Dutch cooperative of floriculture growers. Following an extensive investigation, ACM has come to the conclusion that sufficient competition will remain with regard to floriculture-product transport. RFH will house three transport companies (De Winter, Van Marrewijk (Wematrans), and Van Zaal) in a new company: Floriway. RFH is a cooperative of floriculture growers. RFH also commercially exploits the world’s largest auction and trading platform for floriculture trade.

What was this case about?

ACM has conducted an in-depth investigation into this acquisition. In a preliminary investigation, it was not sufficiently clear what the effects on competition were on the market for floriculture-product transport. That is why, in the extensive investigation, ACM carried out a market study among transport companies, growers, and buyers of floriculture products. In addition, ACM sent out requests for information to the parties involved, competitors, and buyers. The investigation has revealed that sufficient other transport companies exist that are able to compete with Floriway. In addition, growers and buyers see few barriers if they wish to switch transport companies.

Even though RFH is the world’s largest auction and trading platform, the investigation has revealed that the acquisition will not have any major consequences for competition. Because of a combination of different factors, it is not likely that RFH is able to restrict competition, for example, by combining its own auction activities with Floriway’s transport services. For example, growers and buyers are able to do business without RFH, which they already do today. In addition, there is countervailing power in the form of RFH’s cooperative structure as well as exercised by growers and buyers that are critical of RFH.

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.