THE COURT: LATVIAN FLOUR AND OTHER PRODUCTS MANUFACTURER WAS REASONABLY DENIED PERMISSION TO ACQUIRE A LITHUANIAN COMPETITOR 

Today, the Supreme Administrative Court of Lithuania confirmed that the Competition Council had reasonably refused to grant a permission to carry out a merger to the company Dobeles dzirnavnieks, which intended to acquire 100 percent of the shares of the Lithuanian company Baltic Mill, which owns the flour and other products manufacturer Malsena plius, and take sole control of it.

The Supreme Administrative Court rejected the appeal of the Latvian company Dobeles dzirnavnieks and upheld the decision of the Vilnius Regional Administrative Court (currently the Regional Administrative Court) adopted on May 15, 2023. The expanded panel of judges found that the court of first instance made a justified and lawful decision by rejecting the complaint of the applicant Dobeles dzirnavnieks and confirming the conclusions of the Competition Council.

According to the court of first instance, the Competition Council properly carried out the procedures for examining the notification of the concentration, conducted an analysis of the collected data and determined that the implementation of the aforementioned transaction would create or strengthen a dominant position or significantly restrict competition in the relevant markets in Lithuania, therefore the institution reasonably refused to grant permission to implement the concentration.

According to the Court's assessment, the Competition Council also reasonably recognised the commitments provided by the parties as inadequate and unable to eliminate the identified negative impact on competition.

In its decision of August 2022, the institution found that Dobeles dzirnavnieks and Baltic Mill are close and important competitors in the daily consumer goods’, i.e. flour, flour mixtures and pasta, markets which are already concentrated, and that competition between these companies is significant. The merged entity would have a very large share of the relevant markets in Lithuania, while the competitive pressure, which benefits consumers, would disappear.

The decision of the Supreme Administrative Court is final and cannot be appealed.