FrieslandCampina cheese and packing acquisition granted ‘conditional’ EC approval


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FrieslandCampina cheese and packing acquisition granted EC approval
FrieslandCampina has been given the go-ahead to complete its acquisition of Dutch specialist cheese manufacturer, Zijerveld, and its packing business - but only under conditions designed to ensure competition in the country’s market for semi-hard goat cheese.

The Netherlands-based dairy cooperative announced in January 2013 that it had entered into an agreement with MYWO Food Group to acquire cheese wholesaler, Zijerveld & Velhuysen, and cheese packaging services provider, Den Hollander Food.

The European Commission (EC) authorised the transaction late last week, despite initial concerns that it would have “significantly reduced competition on the market for the production and sale of semi-hard goat cheese in the Netherlands.”

The EC’s “concerns”​ related to Zijerveld’s exclusive semi-hard goat cheese supply arrangement with Amalthea van Dijk – the second largest producer of semi-hard goat cheese in the Netherlands. FrieslandCampina is the country’s number one producer.

“The clearance is conditional upon the implementation of a package of commitments offered by FrieslandCampina,”​ said an EC statement on the decision.

“The commitments address these concerns as they will ensure that sufficient quantities of semi-hard goat cheese are available to third parties.”

Insufficient “competitive constraint”

"The proposed transaction, as originally notified, would have combined the two leading producers and suppliers of semi-hard goat cheese in the Netherlands, leading to very high market shares,” ​said the EC statement.

The EC established, following an investigation, that customers who buy semi-hard goat cheese in the Netherlands showed a preference for cheese produced in the country from domestic milk – limiting import opportunities.

Permitting the transaction “would therefore not constitute a sufficient competitive constraint on the merged entity.”

“In order to address these concerns, FrieslandCampina undertook to amend the existing supply arrangement between the target and Amalthea so that competitors have access to a significant part of the goat cheese produced by Amalthea,” ​said the statement.

“In addition, FrieslandCampina will stop outsourcing the production of semi-hard goat cheese to Amalthea, thereby ensuring that such production capacity will be available to third parties. At the request of third parties, FrieslandCampina will also make available raw goat milk for the production of semi-hard goat cheese,” ​the EC statement added.

FrieslandCampina working to establish “satisfactory solution”

Commenting on the EC decision, FrieslandCampina revealed that it has entered talks with Amalthea to find a “satisfactory solution”​ to the amendment.

“The European Commission has approved the acquisition, subject to production capacity, a sales volume of semi-hard goat’s cheese and goat’s milk, being made available to one or more external players,” ​said a statement from FrieslandCampina.

"Specifically, this means that between 35% and 45% of the goat’s cheese sales of Amalthea, as a partner of Zijerveld, must be sold on the open market.”

“FrieslandCampina will take its responsibility and will enter into a constructive dialogue with Amalthea to find a for Amalthea satisfactory solution,” ​the company added.

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