Investigation into a merger in the mushroom sector

January 23, 2004

Outcome of investigation

The Authority (“The Authority”) opened up an investigation in July 2003 as a result of a newspaper report of the proposed merger between Monaghan Middlebrook Mushrooms Limited and Carbury Mushrooms Limited.

The investigation revealed that thanks to alternative sources of supply, and differences in geographic and product markets, the merger would not substantially increase the ability of the parties to exercise market power against customers.

The Authority therefore decided that the merger was unlikely to breach competition law. As a result, the investigation was closed.

Outline of case

Undertakings are required to notify mergers and acquisitions that reach certain turnover thresholds. They will be assessed by the Authority under Part 3 of the Competition Act, 2002 (the Act). Mergers or acquisitions under the thresholds may still come under scrutiny under section 4 and section 5 of the Act, which deal with the prevention of anti-competitive agreements and abuses of dominant positions respectively.

The Authority opened up an investigation in July 2003 as a result of a newspaper report of the proposed merger between Monaghan Middlebrook Mushrooms Limited and Carbury Mushrooms Limited.

The parties advised that the matter was not subject to a mandatory notification. The Authority did not dispute this conclusion. After preliminary assessment, the Authority commenced an investigation pursuant to section 4 and 5 of the Act. . The parties co-operated fully in the investigation.

The Authority identified the following three possible areas of competitive concern in relation to the proposed merger:

Effect on the market for the production and supply of compost;
Effect on the market for the acquisition of fresh mushrooms for export; and
Effect on the market for the acquisition of fresh mushrooms for domestic sale

The investigation revealed that thanks to alternative sources of supply the merger would not substantially increase the ability of the parties to exercise market power against customers who buy their compost products.

Because the two parties appeared to serve different geographic areas the Authority also took the view that it is unlikely that the parties would be able to exert any significantly greater degree of market power in the market for the acquisition of fresh mushrooms for export.

Finally, as one of the parties, Carbury, is not directly involved in marketing mushrooms to domestic suppliers, the Authority was of the view that the proposed merger would have no direct impact on the domestic mushroom market.

The Authority therefore decided that there was not a sufficient likelihood of anti-competitive effects arising as a result of this merger to give rise to a breach of competition law. As a result, the investigation was closed.

To learn more on this case read our Enforcement Decision relating to Investigation into a proposed agreement/arrangement in principle whereby Monaghan Middlebrook Mushrooms Limited would acquire 100% Shareholding in Carbury Mushrooms Limited.