Foodstuff, Latvia, Markets and Companies, Mergers and take-overs

In order to prevent the deal from having a negative effect on competition, the council have put forward a binding regulation to ensure that the retailer retains the ability to make independent decisions and that no obstacles are put in the way of new competitors entering the market, writes LETA.

Kabanova indicated that the council's decision placed an obligation on the parties to the merger to ensure that any wholesaler or retailer will be able to acquire the desired volume and assortment of certain meat products produced and sold by the parties to the merger without coming under any obligation to buy other meat products.

The regulation has been created with the aim of preventing the reduction of competition in certain markets.

As reported, Rigas miesnieks, which belongs to the Finnish-registered HKScan concern, is planning to acquire 90.85% of shares in Jelgavas galas kombinats from Masa capital partners, Sidrabene and UPCF.

Following the deal, both companies will continue to operate separately.

According to data from the market and advertising research company Nielsen, Rigas miesnieks has 22% of the market, while Jelgavas galas kombinats has 5.7%.

Rigas miesnieks was founded in 1922 in Riga. Since 1998, the company has been part of the Finnish concern HKScan, which is one of the main food production companies in Northern Europe, and one of the leaders in the Polish, Swedish, Baltic States and Polish markets. Apart from Rigas miesnieks, the Baltic States group of HKScan also includes the Estonian companies Rakvere Lihakombinaat, Ekseko, and Tallegg, as well as the Lithuanian firm Klaipedos Maisto Mesos Produktai.

Over the last three years, the meat product market share of Rigas miesnieks has grown by 6%, reaching a 22% share of a highly competitive market featuring more than 50 companies. The company has 190 employees, and produces more than 200 different meat products. The most significant product category for Rigas miesnieks is sausages, where the company holds a 48% market share.