Brussels, 22/12/2004 (Agence Europe) - The European Commission has approved the acquisition of Hendrix Meat Group (HMG) by Sovion under the EU merger control Regulation. Both companies are based in The Netherlands and are active in slaughtering of pigs and meat sales. The new company will be the largest player in The Netherlands and one of the largest in Northern Europe. Sovion is a Dutch company active, through a great number of subsidiaries (such as Dumeco, Bestmeat, Sobel, Rendac) in a variety of sectors, most importantly slaughtering of pigs and cattle, the processing, production and sale of meat products and processing of abattoir by-products as well as the production and sale of products made from abattoir by-products (such as gelatine). Sovion is mainly active in the Netherlands, Germany and Belgium. The merger mainly concerns slaughtering (of live pigs), sales of fresh and processed meat and processing and disposal of abattoir by-products.
The Commission focussed its investigation on the extent to which farmers and other suppliers of pigs to slaughterhouses in the Netherlands can supply pigs to Belgium and North Western Germany. The Commission found that there are no significant barriers for pig suppliers to switch to slaughterhouses across the border and that exports of pigs are significant and do vary in the short and medium term, which indicate that suppliers can switch according to market conditions. The Commission looked into transport costs, export-related veterinary requirements and national preferences and found that none of these factors raise barriers to live pig exports. As a result, the market position of the merged entity will not allow it to determine/depress purchasing prices of pigs paid to Dutch pig farmers.
In the markets for meat sales to the various categories of customers (supermarkets, industrial processors etc.) the Commission has found that the new company will face effective competition from a variety of market players operating at national, regional and European level.
Only Sovion is active in the processing and disposal of abattoir-by-products (blood, bones, pigskins etc) through a number of subsidiaries (such as Rendac, Harimex, Sonac Burgum, Smits Vuren). HMG is not a processor of by-products and delivers almost all its abattoir-by-products to Sovion for treatment. The Commission concluded that the various vertical relationships between the two parties do not create competition concerns. In particular, the new company will not be in a position to raise competing slaughterhouses' costs by restricting access to its treatment facilities, nor will it be in a position to restrict access to those abattoir-by-products which are used as raw material for the production of downstream products like gelatine, plasma and haemoglobin.