bakery products




On 18 September 2024 the Council of the Antimonopoly Office of the Slovak Republic (AMO) upheld AMO´s first-instance decision imposing a fine in the total amount of EUR 21 million on the undertaking AGROFERT, a.s. (Prague) for the failure to notify a merger, by which it had acquired control over two competing bakeries, and, subsequently, it had exercised rights and obligations arising from the acquisition without prior AMO's approval.



AMO proved that the company AGROFERT had acquired indirect exclusive control over Slovak bakeries PRVÁ BRATISLAVSKÁ PEKÁRENSKÁ a.s. (Bratislava) and PEZA a.s. (Žilina) in September 2013. 



However, in an effort to circumvent the Act, AGROFERT had formally acquired the bakeries gradually, the bakery in Bratislava in 2013 and the bakery in Žilina only in 2016. Pursuant to the Act, several concentrations realised between the same undertakings within two years are assessed together as one. Therefore, the acquisition of both bakeries at the same time (or within two years) would be, due to the amount of joint turnover, the subject to an assessment by AMO, which AGROFERT had tried to avoid.



Evidence obtained by AMO shows that the company had acquired the control over both bakeries at the same time in 2013. However, the control over Žilina bakery was to be carried out in secret during two years through another entity, from which it had planned to officially buy the bakery, which had happened in 2016.



AGROFERT had tried to acquire both bakeries already in 2011, but AMO had prohibited such a transaction (invalidly, as the company had withdrawn its proposal to initiate a proceeding in the appeal proceedings), because it would contribute to the creation/strengthening of its dominant position and preventing effective competition in several markets in the field of bakery production. The fact that the company was fully aware of AMO's previous negative opinion on the acquisition of both bakeries was taken into account in the amount of fine.



Merger control is one of the tools for maintaining and developing an effective competition. In order for such a control to be effective, mergers which are subject to AMO´s control must be notified before the rights and obligations arising therefrom are exercised. It is, therefore, necessary for the merging parties to respect and comply with the regime.



The Council of AMO´s decision came into force on 27 September 2024.




    
        

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AGROFERT Upheld 21 Million Euro Fine for Merger Notification Failure

The Council of the Antimonopoly Office of the Slovak Republic (AMO) confirmed a 21 million euro fine imposed on AGROFERT for not notifying a merger where it gained control over two bakeries and acted on the acquisition without AMO's approval.

AGROFERT acquired indirect exclusive control over Slovak bakeries PRVÁ BRATISLAVSKÁ PEKÁRENSKÁ a.s. and PEZA a.s. in 2013, attempting to avoid AMO scrutiny by acquiring the bakeries separately in 2013 and 2016.

Despite AMO's previous prohibition in 2011 due to competition concerns, AGROFERT proceeded with the acquisition, leading to the substantial fine. The company's awareness of AMO's stance was considered in determining the penalty.

Merger control is crucial for fostering competition, requiring parties to notify mergers to AMO before implementing any resulting rights and obligations, as highlighted by the Council's decision.



AGROFERT Upheld 21 Million Euro Fine for Merger Notification Failure

The Council of AMO upheld a 21 million euro fine on AGROFERT for failing to notify a merger and prematurely implementing it, acquiring control over two bakeries.