The Competition Council (CP) has approved the merger, with SIA "Lacplesa Alus" acquiring a decisive influence over SIA "Bauskas Alus" and SIA "Rūta M", a provider of wastewater treatment and treatment, KP "Delphi" .
The competition guards found no material harm to the competition and therefore decided to authorize the transaction.
Lacplesa beer is owned by SIA Cido Group.
The Cido Group and its affiliates are actively engaged in the production and wholesale of beer under the Livu, Lielvardes, Madonas brands and in the wholesale of beer under the international Heineken, Krušovice and Sol brands. Likewise, Cido Group and its subsidiaries are active in the production and / or wholesale of soft drinks under brands such as "Manga Mani", "Cido", "Zoo", "Fruts", "Frutto", "Pepsi Co", "Miranda" ", 7up, Mountain Dew, Njoy, Fantasy, Ancient Quass and more.
"Bauskas alus" Ltd., in turn, ensures the production and wholesale of this beer, as well as the production and wholesale of carbonated soft drinks like yeast, "Veselība" malt, "Porteris", "Dr. Kombucha" and "Dr. Kambuča" bark ".
As a result of the investigation, the CC concluded that, after the merger, the combined market share of the two beer wholesalers in different retail channels would increase slightly, not exceeding 5%, which would be considered a minor increase in concentration. On the other hand, the market share of "Bauskas alus" in the market for the production and wholesale of soft drinks is very small, so CP has not thoroughly researched the soft drinks market.
By thoroughly assessing the situation in the wholesale beer market in the hotel, restaurant and café sectors, CC does not find that "Lacplesa beer" together with "Bauska beer" has the opportunity to use its market power with respect to existing market participants, limiting or disrupting potential market participants. Assessing the information provided by market participants and made available to CC, it concludes that the merger will not result in a significant change in market structure or in the creation or strengthening of a dominant position in any of the affected markets. Therefore, merging is allowed.
In order to avoid a significant reduction in competition due to mergers, mergers that meet the criteria set out in the Competition Law require the approval of CC. Thus, the CC provides for state control of market concentration so that there are no structural changes, which in the long run results in consumers being restricted from choosing or buying goods and services at non-competitive prices.
Bauskas alus posted a turnover of EUR 7,423 million in 2018, an increase of 42% over the previous year, while the company's profit increased 2.1 times to EUR 1,338 million.
Bauska beer was registered in 1999 and its registered capital amounts to 786,996 euros.
On the other hand, the Cido Group was incorporated in 1994 and has a share capital of EUR 1 117 054. 99.9% of the Cido Group is owned by the Danish Royal Unibrew. The company's product range includes juices, nectars and juice drinks, as well as mineral water, drinking water and beer.
In 2017, the Cido Group posted a turnover of EUR 62.69 million, which is 7.5% more than in the same period last year, while the company's losses were reduced several times to EUR 165,602. The company’s financial results for 2018 have not yet been announced.