Finnish Market Court has prohibited the merger between Kesko and Heinon Tukku on 17 February 2020. Kesko was going to acquire the foodservice wholesaler Heinon Tukku Oy. The Market Court has found that Kesko’s acquisition of Heinon Tukku would have harmed competition in the Finnish grocery wholesale market. Thus, court decision is in the line with the bargain prohibition proposal of the Finnish Competition and Consumer Authority (FCCA).
According to FCCA the acquisition would significantly reduce competition in grocery sales and would lead to Kesko’s dominant position in the wholesale market. FCCA has estimated that the combined market share of Kesko and Heinon Tukku could reach 60-70% in the wholesale market. In addition, both foodservice wholesalers were found to compete for the same customers. As a result, without the competitive constraint from Heinon Tukku, Kesko would have been able to increase its prices and raise the average bill paid by customer.
The parties of the bargain, Kesko and Heinon Tukku, are foodservice providers. They are also wholesalers. Their customers are restaurants, hotels, catering, gas stations and kiosks. Heinon Tukku employs approximately 450 people and Kesko's Kespro wholesaler employs about 500. Heinon Tukku and its Kalavapriikki subsidiary have a combined turnover of approximately EUR 260 million (data 2018 year).
Similar services are provided, for example, by Wihuri Metro distributors and Meira Nova of the S-Group.
This is the first time when business acquisition has been blocked in Finland. The Market Court’s decision may be appealed to the Finnish Supreme Administrative Court.
The full information and the source text can be found at Finnish Competition and Consumer Authority website.
Published 19.02.2020, FINREPO