The European Commission issued a conditional consent for takeover of the English Cadbury by the American consortium Kraft Foods. The Commission took account of the comments reported by UOKiK

The European Commission and national antitrust bodies are authorised to carry out market analyses on the effects of mergers and acquisitions, and even to block transactions that may permanently distort competition. When assessing market concentration, these bodies may issue a consent to carry out a transaction, condition it on fulfilment of additional requirements by an entrepreneur, or prohibit it. Obtaining a consent before starting the transaction aims at protecting competition against negative effects of concentration.

Community dimension of a given concentration is the basic condition determining whether or not a given transaction will be considered by an Antitrust Office or the European Commission. The European Commission, in general, examines transactions, where the combined worldwide turnover of all entities involved in the concentration exceeds EUR 5 billion, whilst the combined EU-wide turnover of each of at least two of the entities participating in the concentration exceeds EUR 250 million. The competence of the President of UOKiK covers concentration cases which have or may have an impact within the territory of the Republic of Poland, and whose level of turnover was not higher than these amounts.

Having received a notification of concentration on the European market, the Commission forwards a copy to all national Antitrust Offices. As part of competition protection on the European market, each Member State may express its opinion regarding the case and provide comments to the issued decision, or notified proposal of additional conditions. This was the case of the conditional consent, which has just been issued for the Kraft Foods and Cadbury and to which the Office of Competition and Consumer Protection notified its reservations.

The European Commission approved the takeover of the English Cadbury by the American consortium Kraft Foods. The transaction is conditioned on sales of the activity of Cadbury within the scope of chocolate confectionery in Romania and Poland.

The Kraft is a food and beverages producer operating in more than 150 countries. It owns such brands as Milka, Alpen Gold or Toblerone. Cadbury operates in over 60 countries on the market of production and sales of chocolate and sugar confectionery. It is the market leader in Great Britain and Ireland, primarily due to the Dairy Milk brand. It operates in countries such as Poland, Romania and Portugal thanks to applying the local brands. Both companies play an important role on the European market of chocolate confectionery.

The condition imposed by the European Commission, which concerns the Polish market, takes into account the comments provided by the Office of Competition and Consumer Protection. In Poland Cadbury owns, inter alia, Wedel brand, which is the strongest traditional chocolate brand in our country and the most valuable one on the confectionery market. Moreover, the company is a direct rival of the products of Kraft Foods. For example: Alpejskie mleczko (Kraft Foods) competes with Ptasie mleczko (Cadbury–Wedel), and on the chocolate market: Milka with Wedel chocolates.

According to the Polish Antitrust Office, the consent for the takeover would significantly strengthen the market position of Kraft Foods in Poland, thus doubling the market share of this consortium. Therefore, the Office has suggested to Cadbury the sales of the Wedel brand and assets related to it. The concerns of the Office were connected with the strong impact of the planned transaction on the Polish sweets market, especially on the market of chocolate bars. Kraft Foods would strengthen its market power especially on this market, which could contribute to restricting competition.

The suggestions of UOKiK are taken into account in the conditional consent that has just been issued by the European Commission for the American consortium Kraft Foods to take over the English Cadbury.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]