Biscuit International’s acquisition of Aviateur cleared

Raphaël De Coninck

The Netherlands’ Authority for Consumers and Markets (ACM) has unconditionally cleared Biscuit International’s acquisition of Aviateur. Both Biscuit International (through its Dutch subsidiary Banketgroep) and Aviateur are active in the biscuits, cookies, and cakes (“BKCT”) market in the Netherlands.

While the parties’ shares on the overall BKCT market are relatively limited, “a number of supermarkets indicated that after the planned acquisition, there will be no alternative to the merged entity because the merged entity will be the only industrial producer of large grocery cake that is in a position to fulfil the demand of supermarkets at a price at which supermarkets want to buy.” In order to address such concerns, the CRA team submitted a detailed Minimum Viable Scale analysis to the ACM, which showed that expansion and entry from contiguous market segments within BKCT was likely, and that competitive concerns could therefore be discarded, even if narrower market segments, such as large grocery cakes, were considered.

In its decision, the ACM refers multiple times to this CRA analysis, regarding both market definition and the competitive assessment.  In particular, the decision explains that the transaction would not create any competition concern, even for large grocery cake, given the likelihood of entry:

“With this [CRA] report, the parties have substantiated the likelihood of entry in a possible market for large grocery cake. Entry is possible both through supply-side substitution and by purchasing a completely new production line. The [CRA] report shows that in particular producers who only have to expand their existing production line to also start producing large grocery cake (e.g. producers of fresh / traditional cake, cookies and small cake) have to sell a relatively limited amount to recoup the initial investment within five years and be profitable. The ACM therefore considers that entry would be likely in response to a possible price increase in a possible market for cake.” (translated from Dutch)

The CRA team advising Biscuit International was led by Raphaël De Coninck and also included Roman FischerStefano Callari, and Kilian Mueller.

For more details, please see the ACM’s press release and decision (in Dutch).