The Danish Competition Council has approved the merger between Royal Unibrew and CULT
On 7 September 2018 the Danish Competition and Consumer Authority (hereinafter “DCCA”) received a complete notification of Royal Unibrew A/S’ (hereinafter “Royal Unibrew”) acquisition of sole control of Bev.Con ApS which owns 100 pct. of the shares in Cult A/S (hereinafter together referred to as “CULT”).
Royal Unibrew is the parent company in the Royal Unibrew Group. Royal Unibrew produces, sells and distributes drinks such as beer, malt drinks, soft drinks, energy drinks, ciders and Ready-To-Drink (hereinafter “RTD”). CULT markets, sells and distributes RTD, ciders and energy drinks. CULT has its drinks produced abroad by a subcontractor.
Royal Unibrew and CULT are thus in the Danish on-trade- and off-trade-markets for production, distribution and sale of RTD and cider, and in the Danish on-trade- and off-trade-markets for production, distribution and sale of energy drinks. The market definition can be left open in this case, as the assessment does not differ under the different market definitions.
Mergers with horizontal overlaps may significantly impede effective competition through unilateral effects. The DCCA has carried out investigations, which concluded that the market for production, distribution and sale of RTD and cider is very dynamic with the ongoing introduction of new products and flavours and the consumers exhibit limited brand loyalty. In addition, the DCCA concluded that even though the merging parties exert a competitive pressure on each other before the merger, the parties’ incentive to increase their prices is mitigated by low barriers to entry in all markets. Based on an overall assessment the Danish Competition Council (“DCC”) considered that the merger would not give rise to unilateral effects.
Moreover, the DCC found that the merger would not cause coordinated nor conglomerate effects.
Overall DCC assessed that the merger would not significantly impede effective competition in the Danish market for production, distribution and sale of RTD and ciders, nor in the Danish market for production, distribution and sale of energy drinks.
On 27 February 2019 the Danish Competition Council approved the merger.