|Aksel Joachim Hageler||Thomas Sando|
While Coop has emerged as the winner among the grocery chains in the struggle for Ica, the decision leaves some of the spoils for both chains Norgesgruppen and Bunnpris. In the merger decision, the Competition Authority compelled Coop to divest 93 of Ica's stores to these two competitors, apparently leaving no room for either foreign buyers or other Norwegian players.
Apart from Rema 1000, which was not allowed to acquire any of Ica's stores, the largest losers seem to be the Competition Authority, the producers of food products and the Norwegian consumers, the latter of which already faces some of Europe's highest food prices.
In 2013, Ica announced that it could not sustain its existing operation due to losses of billions of kroner over several years. Ica's preferred solution was to maintain its independence but enter into a joint purchasing and joint distribution agreement with the largest Norwegian chain Norgesgruppen. Keen to preserve Ica as a fully-fledged competitor to Norgesgruppen, the Competition Authority in reality turned down the agreement during a series of decisions and appeals in 2014.
Ica then turned to Coop, but in the meantime changed its mind. Now Ica wanted to exit the market altogether. Coop agreed to acquire Ica's stores and now the Competition Authority has approved a transaction leading to the total elimination of Ica from the Norwegian market. One could argue that the more limited dent in Ica's independence represented by the proposed distribution and purchasing agreement with Norgesgruppen, would have been the better option.
Following Coop's acquisition of Ica, there are only three large grocery chains left on the Norwegian market and no foreign participants. A highly concentrated market has become even more concentrated and the exits of German Lidl and Swedish Ica make new foreign establishments less likely. This situation will undoubtedly negatively impact both producers and consumers for years to come.
Aksel Joachim Hageler and Thomas Sando
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