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Binding Conditions Set on Merger of Alcohol Distribution Companies



On 18 July 2009, Latvian Competition Council (CC) adopted a decision permitting a merger between alcohol distribution companies „SPV Distributor" Ltd., „S.D.V." Ltd., „L.D.V." Ltd., „MONO M" Ltd. and „S.Alko" Ltd. (principal activity - wholesale and retail of alcoholic beverages) under binding conditions.

In order to eliminate the potential negative effect of the merger on competition in the sales market of sparkling wine as well as in the market of purchasing of alcoholic beverages for retail sector in territory of Latvia, CC in the period till 18 June 2014 prohibited merger parties to offer services of excise goods' warehouses and custom excise goods' warehouses for certain goods and to supply alcoholic beverages with "Martini" trademark and sparkling wines which were supplied by L.D.V. Ltd. MONO M Ltd. and Alko Ltd. during the time period from 2008 until the day CC's decision was adopted (except for the champagne and sparkling wines with trademarks „J.P. CHENET", „SANTORI" and „BERSANO").

These binding conditions were set to prevent strengthening of the dominant position of the merger participants in the sparkling wine market. Before this merger market share of "SPV Distributor" Ltd. and related companies was large and its sparkling wine "Rīgas šampanietis" was widely known trademark without which retailers could not form a complete assortment. Taking this into account restrictions concerning the supply of such internationally known and popular trademarks, e.g. "Martini Asti", were crucial. It was also important to prevent concentration of too many popular trademarks in the portfolio of a single wholesaler as this would significantly reduce competition in the market of purchasing of alcoholic beverages for retail sector.