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European Commission Approves Mars’ Pet Food Acquisition

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European Commission Approves Mars’ Pet Food Acquisition

European Commission Approves Mars’ Pet Food Acquisition
November 06
10:04 2018

The European Commission has approved, under the EU Merger Regulation, the acquisition of AniCura, a veterinary clinic chain, by Mars, the US-based consumer products giant. The approval is conditional on the divestment of AniCura’s VetFamily business.

Mars supplies pet food through its Mars Petcare division, which is active amongst others in the dietetic pet food segment via its Royal Canin brand. AniCura is a veterinary clinic chain, active in several EU Member States (Austria, Denmark, France, Germany, Italy, the Netherlands, Spain and Sweden). AniCura also owns VetFamily, a purchasing organisation for independent veterinary clinics. VetFamily is responsible for negotiating framework contracts for the benefit of its member clinics, including for the procurement of dietetic pet food.

On the basis of its preliminary investigation, the Commission was concerned that the transaction, as originally notified, would have enabled Mars to shut out its dietetic pet food competitors from the downstream retail channels, namely the AniCura veterinary clinics and the VetFamily member clinics. This concern related to Denmark and Sweden where AniCura and VetFamily together account for a very significant share of sales of dietetic pet food.

As a result, the Commission was concerned that the transaction could affect the ability of other producers of dietetic pet food to compete with Mars. This could have resulted in higher prices, less choice or lower quality, as well as in a reduction in innovation in dietetic pet food.

The Commission found that no competition concerns would arise in the other countries where AniCura’s and VetFamily’s operate because a much smaller share of overall sales of dietetic pet food is sold in their clinics there.

To address the Commission’s competition concerns, Mars offered to divest AniCura’s VetFamily business in its entirety in the whole of Europe. As a result Mars will not be able to influence the purchasing activities of the clinics belonging to VetFamily. Instead, this business will be subject to competition from competitors to Mars.

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