NMa: planned baking-company merger raises potential antitrust concerns

The acquisition of Dutch baking company A.A. ter Beek (with its flagship brand Bolletje) by rival baking company Continental Bakeries may impede competition in the rusk market and in the private-label spiced rye bread market. That is why the Netherlands Competition Authority (NMa) has ruled that this acquisition requires a license first. If parties indeed file a license application, the NMa will investigate the acquisition’s impact on competition in further detail.

A combined A.A. Ter Beek/Continental Bakeries would have a substantial market share and, with that, a strong position in the production and sales of rusk and private-label spiced rye bread to supermarkets. If the two most important producers of rusk and private-label spiced rye bread merged, supermarkets, and eventually consumers, would have fewer choices of these products. This could lead to higher prices or reduced quality, which may harm consumers. If these bakeries file a license application, the NMa will focus on, among other aspects, to what extent A.A. ter Beek and Continental Bakeries would be able to raise prices for rusk and private-label spiced rye bread permanently and profitably. The NMa will also look into supermarket buyer power (if any) and the feasibility of going to alternative producers.

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 negative effects on the price, quality and range of the products or services offered on the market. Were that to happen, the NMa could attach conditions to the planned concentration or block it altogether. It is prohibited to go through with a concentration before the NMa has ruled on it.