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Svenska Lantmännens acquisition of Spira

27. april 2005

Jornal nr. 3/1120-0401-0070/FI/pr/mah The Council Meeting 27th April 2005

At the April meeting the Danish Competition Council granted clearance to Svenska Lantmännen’s acquisition of the Spira Group.

By agreement of March 1st 2005 the Swedish company Lantbrukarnas Ekonomiaktiebolag has transferred 83% of the shares of the Spira group to Svenska Lantmännen which means that Svenska Lantmännen now owns 91% of the shares of that group.

The Swedish company Kronfågel and the Danish Company Danpo are both wholly owned subsidiaries of the Spira Company. The annual turnover of Danpo together with the annual turnover

of Svenska Lantmännen in Denmark result in a merger subject to notification in Denmark.

During the handling of the notified merger the Danish Competition Authority has identified a couple of markets where the impact of the merger has been investigated.

Concerning output (from Danpo), the market can be divided into two segments, namely the market for supply of chicken products to the Danish retail trade and the market for supply of chicken products to the catering trade and the industry for processed food where the scope of the latter is probably larger than Denmark. On these markets Danpo and the other larger Danish poultry-company, Rose Poultry operate together with a couple of foreign suppliers.

Concerning purchase, the market can be defined as the market for the purchase of broilers from the broiler breeders. The geographic scope of this market is Denmark.

Finally the merger involves an adjoining market upstream as Swe-Chick is a wholly owned subsidiary of the Svenska Lantmännen Group. Swe-Chick has an agreement with Ross Breeders Ltd. whereby SweChick is the sole agent for breeding and selling Ross parent stock in Scandinavia.

On the relevant product markets the merger will not establish or strengthen a dominant position as Svenska Lantmännen is not active on these markets. However, Svenska Lantmännen has an extremely strong position on the upstream market, breeding and selling broilers to the Danish brooding-houses. At present each and every one of the broilers delivered to the two Danish abattoirs descend from parent stock from Swe-Chick.

Svenska Lantmännen’s strong position on the adjoining market has given rise to concern in The Competition Council. This position might give Svenska Lantmännen the possibility to put pressure on Danpo’s competitor, Rose, and thereby strengthen Danpo’s position on the market for the purchase of broilers from the broiler breeders and possibly also on the market for the supply of chicken products to the retail trade and the catering trade. However, as a response to the competition concerns raised by the Competition Council Svenska Lantmännen undertook to deliver to all Danish brooding-houses on non-discriminatory terms whereby the competitive concerns are considered eliminated.