Eurocash moves to acquire Polska Dystrybucja Alkoholi (Polish Alcohol Distribution, PDA), but Poland’s competition Authority cites limitation on competition in issuing its concern about the transaction

Eurocash engages in the wholesale and retail sale of fast-moving consumer goods (FMCG), including through specialised wholesalers of alcoholic beverages. PDA is a wholesaler of beverages, primarily alcoholic ones. The companies’ activities overlap in the sale of alcohol in specialised warehouses. The acquisition would result in Eurocash acquiring seven of PDA’s warehouses, in the cities of Chrzanów, Końskie, Cracow, Pabianice, Radom, Sędziszów and Rusiec, all of which are in Poland.

The materials gathered for the analysis showed that competition could be limited in local markets of alcoholic beverages with an alcohol content exceeding 18% sold by specialized wholesalers. These markets cover a radius of 50 kilometers from the warehouses in Pabianice and Radom. Analysis of the competitive situation that would emerge after the acquisition showed that the total share of these markets the two companies would command would significantly exceed the 40 percent mark antimonopoly law identifies as a dominant position. At the same time, there is no competitor offering a comparable market position.

The local market was defined as an area within a 50-kilometer radius of the warehouse to be acquired because that territory is where most of the sales of Eurocash, PDA and their competitors occur. Thus it is here that Eurocash and PDA compete.

In cases where there is a reasonable likelihood of competition being substantially reduced as a result of a concentration, UOKiK issues a competition concern. It includes a justification and does not prejudge the final outcome of proceedings.

Under the law, undertakings have 14 days to respond to the concern, but may request a two-week extension.

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