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Poland: Netto may take over 300 Tesco stores

Discount Retail Chain Netto Poland (owned by Danish Salling Group) received approval from the Office of Competition and Consumer Protection to take over 301 stores owned by Tesco Polska. According to the information provided by the portal, the consent of the office is unconditional.

The Netto discount chain belonging to the Danish Salling Group will pay PLN 900 million (US$ 226 million) for the acquisition of Tesco stores, HQ and 3 distribution centers in Poland.

The application for the takeover of Tesco Polska by the Salling Group was initially submitted to the European Commission. However, the European Commission decided that due to the scope of the transaction and experience in similar cases, UOKiK would be more competent to consider the case, therefore it transferred the case to Poland.

About 1,100 discount stores operate under the Netto brand in Denmark, Germany and Poland, of which 386 in our country. Tesco Polska is the owner of a chain of hypermarkets and supermarkets. It currently has 320 stores, two distribution centers and 23 petrol stations. Of these, the subject of concentration is 301 stores, 14 petrol stations, headquarters and distribution centers. The transaction results from the Tesco Group's decision to withdraw from the Polish market.

In the course of the proceedings, the competition in several dozen local markets was examined. After analyzing the concentration and in line with the previous jurisprudence, the President of UOKiK assumed that supermarkets, hypermarkets and discounters compete directly with each other on local markets within 10-15 kilometers from the store being taken over. This is the most common maximum distance consumers will be willing to travel to a larger store.

The conducted investigation showed that in each of the examined cities, Netto will have to compete with other discounters, supermarkets and hypermarkets after the acquisition of Tesco stores. This means that, after the transaction, the structure of these markets will not change to the detriment of consumers, suppliers or entrepreneurs running smaller stores, says the President of UOKiK, Tomasz Chróstny.

Apart from the decision regarding the purchase of Tesco Polska, the President of the Office of Competition and Consumer Protection issued in February 2021 a decision on the temporary takeover of eight Tesco stores by the Salling Group. These are the stores in Gliwice, Szczecin, Kraków, Gdynia, Kielce, Katowice, Ostrowiec Świętokrzyski and Warsaw. Salling Group plans to permanently acquire only the store in the latter location. The remaining ones will be taken over temporarily in connection with the end of the Tesco group's activity in Poland and are to be sold to other entities in the future. The acquiring company undertook to run these stores under the Tesco brand by August 31, 2021.

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