• Air Products&Chemicals are allowed to take ACP Europe and Eurocylinder over, but under certain conditions.
• Thus, prices of carbonated beverages will not increase.
• This is the first conditional decision UOKiK has made this year.

The President of the Office of Competition and Consumer Protection has, under certain conditions, agreed to Air Products&Chemicals taking over ACP Europe and Eurocylinder. The former produces and sells liquid carbon dioxide to breweries and companies making carbonated beverages and frozen foods, while the latter sells technical gases in cylinders to the HoReCa sector that consists of hotels, restaurants and cafè (or catering) companies. Air Products Capital Group has five production plants in Poland.

I decided that if this transaction was to be conducted without any conditions, it would endanger the competition. I could not agree to this because companies in need for liquid CO₂ and consumers would suffer since a company with large market share could raise prices. In this case it would mean that both liquid carbon dioxide and carbonated beverages would go up in price, says Marek Niechciał, the President of UOKiK. Over half of the liquid CO₂ market would be in the hands of Air Products. It is much more than a share of the company’s largest competitor. The company would also have much higher production capacity, adds Niechciał. Therefore, the Office decided to hedge the concentration with several conditions to avoid such negative effects. Below we present the most important ones:

1. Within the deadline set by the president of the Office in the decision Air Products will sell production assets that will enable CO₂ production in quantities not less than 76 650 tons. Thus, the market power of this company will not threaten its competitors. The production assets must be purchased by an independent investor, outside the Air Products Group. Ultimately, such an investor will (or not) be approved by the President of UOKiK. The above does not apply to the oldest production line in Włocławek, unless it is modernized. The President of the Office may change this condition and exempt Air Products from selling production assets if any enterprise independent of Air Products starts building in Poland a new plant capable of producing at least PLN 153 000 tons of CO₂ per year.
2. Air Products will offer Polish wholesale customers contract extension. Air Products will not refuse to sell liquid CO₂ without an objective justification.
3. Air Products will not charge Polish wholesale customers with prices higher than maximum ones set according to a special formula. As a result, prices will not increase.

Schedule

The application for Air Products&Chemicals taking over ACP Europe and Eurocylinder was received in February 2018.

The second stage: March 2018

Having analysed the application, the President of UOKiK referred the case to the second stage of proceedings because it required an in-depth analysis and market research. The Office asked all enterprises operating on the liquid CO₂ and dry ice production market about the volume of production, sales and imports, production facilities, production capacities and the degree of their use.

Reservations: November 2018

According to the competitors’ responses and the market analysis results, concentration could lead to a restriction of competition. First of all, more than half of the carbon dioxide production market could be in the hands of Air Products. Thus, te company could have a much larger share than its largest competitor. What is more, this advantage could get bigger in the coming years due to the opening of a new production facility. As a result, the transaction could make the prices of liquid carbon dioxide go up. For these reasons, the President of UOKiK provided the concentration participants with reservations. In response, they presented conditions the fulfilment of which would allow them to complete the concentration. The Office accepted them.

UOKiK’s conditional decision: February 2019