Mergers: Commission refers the acquisition of Pini Polonia by Smithfield to the Polish competition authority

The European Commission has referred the proposed transaction between Smithfield Foods of the US and Pini Polonia of Poland to the Polish Office of Competition and Consumer Protection (UOKiK) at its request. Both companies are active in the slaughtering of pigs in Poland.

On 27 November 2017, Smithfield and Pini Polonia notified the proposed transaction to the Commission. On 15 December 2017, UOKiK requested that the Commission refer to it the assessment of the proposed transaction. UOKiK put forward competition concerns in certain Polish markets related to pig slaughtering. It also claimed that it would be well placed to review the competition effects of the proposed transaction given that:

• the transaction would have no impact on markets outside Poland and
• UOKiK has the necessary knowledge and experience for the assessment of the case because it has conducted several investigations related to the agricultural sector (including inter alia investigations involving Smithfield).

The evidence gathered by the Commission confirmed that the proposed transaction would only affect competition as regards the slaughtering of pigs in Poland, where Smithfield and Pini Polonia are currently the two largest market players. The Commission therefore decided to refer the proposed transaction to UOKiK, which will deal with the case under Polish national law.

Companies and products

Smithfield Foods Inc. of the US, is an indirect wholly-owned subsidiary of WH Group Limited. It is primarily engaged in pig production, pig slaughtering, and the processing and distribution of packaged meats and fresh pork through its subsidiaries and affiliates in the US, Mexico, Poland, Romania and the UK.

Pini Polonia Sp. z o.o. of Poland, is a company operating a single pork slaughterhouse located in Kutno, Poland. In addition to the slaughtering of pigs, Pini Polonia supplies pork meat to retailers and to plants for further processing.

Background

According to Article 9(2)(a) of the EU Merger Regulation, the Commission may refer a transaction notified to it to the competent national competition authority (NCA), when a Member State requests such a referral because a transaction would threaten to significantly affect competition in a market within that Member State and that market presents all the characteristics of a distinct market.

A non-confidential version of today's decision will be available on the competition website, in the Commission's public case register under the case number M.8611.