WRITTEN QUESTION P-2070/99 by Concepció Ferrer (PPE-DE) to the Commission. Situation in the European distribution sector following the merger of Promodes and Carrefour.
Date: 1999-11-05
Institutions: European Parliament, Provisional data
Subjects: EC Regulation, dominant position, merger, restriction on competition, retail trade, supermarket

C 170 E/142

Official Journal of the European Communities

EN

20.6.2000

Will the Commission explain the legal and political justification for such a statement, given that the reason
for the prohibition was that the publicly-owned Spanish shipyards continued to benefit from State aids?

(1) OJ C 27 E, 29.1.2000, p. 66.

Answer given by Mr Monti on behalf of the Commission

(30 November 1999)

The Commission has, in its reply given to the Honourable Member(cid:146)s Written Question E-1432/99 (1), to
which the Honourable Member refers, explained the conditions attached to restucturing aid for the
publicly-owned shipyards in Spain. However it may be helpful if the Commission tries further to clarify
the basis for the current restrictions on Astano(cid:146)s activities.

In the preamble to Council Regulation (EC) 1013/97 of 2 June 1997 on aid to certain shipyards under
restructuring (2), allowing a derogation from the state aid rules laid down in Council Directive 90/0684/
EEC of 21 December 1990 on aid to shipbuilding (3) to enable a further and final restructuring of the
publicly-owned yards in Spain, it is clearly stated that proposed capacity reductions under their restructur-
ing plan will be supplemented by the continued non-reopening to shipbuilding of the Astano yard. In the
absence of any indications in the Regulation to the contrary, it is evident that this restriction is not limited
in time and applies to the yard as such irrespective of its ownership. This is underlined by the fact that the
same paragraph of the preamble to the Regulation in contrast refers to the Astander yard (cid:145)not carrying out
ship conversions as long as it remains in public ownership(cid:146). It was only on the basis of these and the other
conditions laid down in the Regulation that the Council was able to agree to the derogation.

These conditions were reiterated in the Commission(cid:146)s final decision (4) approving the restructuring aid
package, paragraphs 29 and 35 of which refer to the position of Astano.

As was explained in the Commission(cid:146)s reply to the Honourable Member(cid:146)s previous question, the limits on
the yards(cid:146) shipbuilding production capability were a necessary counterpart for the substantial amount of
aids approved in order to minimise the possible distortions to intra-Community competition.

(1) OJ C 27 E, 29.1.2000, p. 66.
(2) OJ L 148, 6.6.1997.
(3) OJ L 380, 31.12.1990.
(4) OJ C 354, 21.11.1997.

(2000/C 170 E/173)

WRITTEN QUESTION P-2070/99

by Concepci(cid:243) Ferrer (PPE-DE) to the Commission

(5 November 1999)

Subject: Situation in the European distribution sector following the merger of Promodes and Carrefour

With reference to the replies furnished by the Commission when it appeared before the European
Parliament on 1 September 1999 in order to answer a question from Mr Garc(cid:237)a-Margallo, MEP, on
company mergers within the distribution sector, and whereas the Promodes-Carrefour merger will create
serious problems in regions such as Haute-Savoie, where the giant company will control 86 % of the
market, and Catalonia, where the group created by the merger will operate approximately 70 % of the
region(cid:146)s supermarkets, and in view of the Europe-wide scope of such operations (the group runs major
supermarket chains throughout the EU), could the Commission say what stage has been reached in the
action it is taking with regard to this matter?

20.6.2000

EN

Official Journal of the European Communities

C 170 E/143

Answer given by Mr Monti on behalf of the Commission

(19 November 1999)

In the framework of the Community rules on competition and, in particular, Council Regulation (EC)
1310/97 of 30 June 1997 amending Regulation (EEC) 4064/89 on the control of concentrations between
undertakings (1) (Merger Regulation), the Commission examines mergers and acquisitions where certain
minimum turnover thresholds are achieved by the companies concerned (concentrations having Commun-
ity dimension). The parties to such concentrations have to notify the project to the Commission and are as
a rule not allowed to implement it before the receipt of a clearance decision. If a concentration threatens
competition in a distinct market within a Member State the Commission, according to Article 9 of the
Merger Regulation, has the possibility to refer the examination of such a concentration to the Member
State, provided it receives a reasoned request for referral from the authorities.

On 5 October 1999, the Commission received a notification of the proposed merger between Carrefour
and Promodes. The operation will create the largest European player in the food retail sector. The main
effects of the merger will be in countries where the parties(cid:146) businesses overlap: Spain, France, Italy and
Portugal. In order to assess the case, the Commission looks carefully at the regional and local aspects of
distribution. At the present stage the operation is under examination and a market investigation has been
launched.

If the Commission after its market investigation comes to the conclusion that a concentration would create
or strengthen a dominant position impeding effective competition (monopoly or joint dominant position
of several undertakings), it will declare the proposed deal incompatible with the common market unless
the parties propose to adapt their initial project in order to make it compatible.

So far, the Commission has examined around two dozen cases in the food retail sector in various
European economic area (EEA) Member States. In one case, the proposed concentration between Kesko
and Tuko (M. 784;1996), both Finnish companies active in the sale of daily consumer goods in Finland,
the Commission concluded that the operation would create a monopolistic supply structure in large parts
of the Finnish market, with combined market shares of 50 % on a national level. The concentration was
therefore declared incompatible with the common market. In another case, Tesco/ABF (M. 914; 1997),
concerning the food retail sector in Ireland and Northern Ireland, the Commission cleared the case taking
note of undertakings offered by the parties to the Irish government with regard to the supply-side. In the
case Rewe/Meinl (M.1221;1998), concerning the Austrian food retail sector, the Commission cleared the
concentration subject to stringent conditions,
limiting the proposed deal to one third of the target(cid:146)s
turnover and to certain regions of Austria. Two other cases, Promodes/Casino (the parties later abandoned
the project) (M.991;1997) and Promodes/S21/Gruppo GS (M. 1086;1998) were partially referred to the
Member States concerned, and consequently dealt with by the French and Italian competition authorities.

At this preliminary stage of its review of the Carrefour/Promodes merger, the Commission is not in a
position to express any view of the possible outcome of its investigations.

(1) OJ L 180, 9.7.1997.

(2000/C 170 E/174)

WRITTEN QUESTION E-2075/99

by Agnes Schierhuber (PPE-DE) to the Commission

(12 November 1999)

Subject: Liberalisation in the context of the WTO negotiations

The WTO Millennium Round is scheduled to include negotiations on further liberalisation in the
agricultural sector. Further liberalisation is appropriate, however, only if it helps to increase the prosperity
of farmers and consumers.