Wednesday, 18 October 2017

Decision 650/2017

Decision on the proposed acquisition of joint control by DELTA FOODS S.A. and the Hatzakou Family over MEVGAL S.A..


Decision 650/2017
File (PDF) Decision 650/2017
Date of Publication of Decision  October 18th 2017
Issue Number of Government Bulletin  
Relevant Market Dairy Products
Proceedings Merger
Legal Framework Phase II (Articles 8 par. 6 and 8 of the Greek Competition Act 3959/2011)
Decision Clearance
Acquiring Company DELTA FOODS S.A.
Target Company MEVGAL S.A.
Summary of Decision  

The Plenary Session of the Competition Commission with its unanimous decision, decided to approve the notified concentration that concerns the acquisition of joint control of the company MEVGAL S.A. from the company DELTA FOOD S.A. and members of the Hatzakou family, on the basis of the commitments undertaken by the parties, under the terms and conditions laid down there (remedies), pursuant to Article 8 par. 6 and 8 of the Greek Competition Act 3959/2011, as in force.

The investigation was launched due to serious doubts as to its compatibility with competition rules, in particular as regards the establishment or strengthening of a dominant position in the relevant markets for the supply of raw cow's milk (both in local production zones of Northern Greece, as well as at the national level) and the production and distribution of chocolate milk in the Greek territory. To address these concerns, the parties have suggested the adoption of appropriate remedies.

The Competition Commission was particularly concerned about the changes that have taken place in the dairy sector, with the aim of maintaining effective competition conditions in the market and strengthening the bargaining power of raw milk producers where the new entity has increased purchasing power.

The parties undertook the following commitments, based on the minimum guaranteed purchase price by DELTA S.A. and MEVGAL S.A. for the milk producers - breeders and the independent and fully independent operation of the companies DELTA S.A. and MEVGAL S.A. regarding the chocolate milk.

A. Regarding the purchase of fresh cow's milk in Greece

The purchase of row cow's milk by each of the companies DELTA S.A. and MEVGAL S.A. (directly or through third parties) from each milk producer – breeder, who cooperates with the parties at the entry into force of the commitment in the "Prefectures", will be done with a minimum guaranteed price based on a specific mathematical type.  This commitment will concern the Prefectures of Macedonia, Serres, Kilkis, Thessaloniki, Imathia, Kozani, Pella, Florina, Kavala and Xanthi, where the two companies individually or jointly made at least 22% of the total purchases of fresh cow's milk, as well as the neighboring Prefectures of Grevena, Pieria and Halkidiki.

This commitment will initially be valid for a period of two years from the notification of the Commission’s Decision to the parties, while each of the buyers (DELTA S.A. and MEVGAL S.A.) retains, in any case, the opportunity to offer higher prices.

The agreements concluded or to be concluded with the milk producers - breeders, will not exceed the annual duration, will not contain a term of exclusivity and excessively burdensome terms for the provision of guarantees (such as, for example, first-rank mortgages on producers' real estate property and / or of their guarantors, receipt of white bills of exchange, etc.).

B. Regarding the relevant market of chocolate milk in the Greek territory

For the period during which the joint control regime over MEVGAL S.A.  will continue to exist, the companies DELTA S.A. and MEVGAL S.A.  will operate independently regarding chocolate milk. The activities of DELTA S.A.  and MEVGAL S.A.  will remain autonomous, with an independent administrative structure, with an explicit commitment that they will not exchange confidential information about these activities and will not allow the dissemination of such information.

This operational independence of the two companies will be ensured in particular by:

• the exclusion of the activities of MEVGAL S.A.  concerning chocolate milk from the exercise of the management rights of DELTA S.A.  over MEVGAL S.A.

• the creation of "Chinese walls" that will prevent the leak of commercially sensitive information between the two companies. The exchange of commercially sensitive / confidential information regarding chocolate milk between these companies will not be allowed, either directly (horizontally) or indirectly through staff, executives or third parties.

There will be no synergies regarding the production of chocolate milk and any issue related to the promotion of sales for chocolate milk products and no cooperation will be developed between DELTA S.A.  and MEVGAL S.A.  or communication regarding the chocolate milk for the period during which the joint control regime over MEVGAL SA will continue to exist. The parties will be able to use a common distribution network, through third parties independent partners, however, no synergies will be developed regarding the parties' own distribution networks.

For the period during which the joint control regime exists on MEVGAL S.A., the staff of the companies DELTA S.A.  and MEVGAL S.A. working in the production of chocolate milk will not be identified, will not work at the same natural space and there will be no common between the two companies active employees. DELTA FOOD S.A. and MEVGAL S.A. will not second from each other staff working in chocolate milk.

DELTA S.A. and MEVGAL S.A. will have and will support their operations each in autonomous systems (especially autonomous computer system) for the period during which the regime of joint control over the company MEVGAL S.A.  will continue to exist.

Also, the terms of exclusivity regarding the chocolate milk in the refrigerators that are used/granted to small outlets by the companies DELTA S.A. and MEVGAL S.A. will be removed and an explicit term will be added to the contracts, regarding the possibility of the outlet to place in it and competing products.

The above, under A and B, commitments, in their entirety are applied to both the companies DELTA S.A.  and MEVGAL S.A.  as well as the companies of the Groups to which they belong respectively. For the proper fulfillment of the above conditions and commitments, a representative established has been appointed, and has received the approval of the Competition Commission. The Commission decision concludes that in case of non-compliance with the above terms and conditions, a fine of up to 10% of the turnover of the last financial year may be imposed. In the Commission's view, the above remedies are sufficient, appropriate and proportionate to ensure effective competition in the individual markets concerned.
Judicial Means Final. Decision has not been appealed
Decisions by the Court of Appeal of Athens(Administrative Division) -
Μοιραστείτε το / Share it


Kotsika 1A & Patision
10434, Athens, Greece
210 8809100

Social Media


Copyright © 2024 Hellenic Competition Commission. All Rights Reserved.


Θέλετε να ενημερώνεστε; Want to be updated?

Aκολουθήστε μας στα κοινωνικά δίκτυα!
Follow us on Social Media!