The Commission for the Protection of Competition (hereafter the “Commission”) at its meeting held on 16/09/2021, examined the notification of a concentration concerning the acquisition of part of the share capital of VLPG PLANT Ltd (hereafter the “VLPG”) by YUGEN LIMITED (hereafter the “YUGEN”) and the merger of Hellenic Petroleum S.A. Group activities’ related to the storage and management of LPG for heating and other use except Autogas (automotive LPG) and Autogas, with the respective business divisions of Petrolina (Holdings) Public Ltd (hereafter the “PHL”), Synergas Ltd (hereafter the “SYN”) and Intergaz Ltd (hereafter the “INT”) which have already been merged through VLPG. YUGEN belongs to the Hellenic Petroleum S.A Group. PHL, SYN and INT altogether with YUGEN will be referred as the “Companies”.
The Commission at its meeting, having taken into consideration the written report of its Service, concluded that the above notified concentration falls within the provisions of the Control of Concentrations between Undertakings Law of 2014, Law no. 83(I)/2014 (hereafter the «Law»), and raises serious doubts as to its compatibility with the functioning of competition in the market.
The Commission, took into account all the relevant information that constitutes the proposed concentration and unanimously decided that the concentration raises doubts as to its compatibility with the functioning of competition in the storage and handling of LPG for heating and other use except Autogas and Autogas including loading into trucks bulk gas, bottling in cylinders, as well as cylinders service and maintenance, which are the economic activities that VLPG will be active in when the first face of the construction works of the plant will be concluded.
Also, serious doubts as a result of the proposed concentration are raised in the markets of the: import of LPG, wholesale of LPG (a) in bulk and in cylinders for heating and other use except Autogas, and (b) Autogas, retail sale of LPG (a) in bulk and in cylinders for heating and other use except Autogas and (b) Autogas as well as in the market of installation of equipment for LPG for heating and other use except Autogas and the provision of equipment maintenance services that the Companies are active in.
I. The notified concentration might significantly impede competition in relation to the horizontally affected market for storage and handling of LPG for heating and other use except Autogas, and Autogas by eliminating significant competitive pressures through VLPG, as the Companies are the only ones to be active in this market, and which are moreover all vertically active in the LPG sector. VLPG will hold a dominant position in the market for storage and management of LPG for heating and other use except Autogas as well as Autogas, which it can exploit, by e.g., rising charges, both for the storage space and for the access to the anchorage and the unloading pipes, applying different terms of transaction between the Companies and other parties besides prices, not-allocating storage space to third parties, imposing exclusivity clauses, etc. Therefore, VLPG may have the ability and incentive to take advantage of its dominant position and make it difficult for other companies and potential competitors to enter or expand in the markets, and there may be a significant impediment to competition as a result of the creation of a dominant position, in a market with high barriers to entry due to the high investment costs and the specific legal and technical constraints imposed in operating in that market.
II. The proposed concentration, through the joint storage and management of LPG for heating and other use except Autogas, and Autogas may facilitate the companies to agree on their coordination terms either in the affected market of the previous stage, i.e. in the LPG import market and/or the affected markets of the next stage i.e. the wholesale of LPG (a) in bulk and in cylinders for heating and other use except than Autogas and (b) Autogas, as well as in the retail of LPG market (a) in bulk and in cylinders for heating and other use except Autogas, (b) Autogas and / or to exclude their potential competitors, as the Board of Directors of VLPG may composed of the same Directors as the Directors of the Companies that are essentially competitors with each other.
III. Through vertical integration, VLPG and its shareholders may gain access to commercially sensitive information regarding the Companies 'potential competitors' activities in the downstream or upstream relevant markets. When a potential competitor in the LPG import market and / or wholesale and / or retail (a) in bulk and in cylinders for heating and other use except Autogas and (b) Autogas, requests from VLPG the service for storage and management of LPG for heating and other use except Autogas as well as Autogas, VLPG Directors, who may be the same as the Directors of the Companies, may obtain sensitive information thus placing their potential competitors at a competitive disadvantage, and thus discouraging entry or expansion into the LPG market.
IV. The close relation of the relevant market for the installation of LPG equipment for heating and other use except Autogas and the market for the provision of maintenance services, may facilitate the Companies to agree on the terms of their coordination and/or to exclude their potential competitors, since the Directors of the Companies that are essentially competitors with each other may be appointed on the Board of Directors of VLPG.
The Commission, on the basis of all the relevant information before it, concluded unanimously that there is a need to proceed to an in-depth investigation of the notified concentration, according to the provisions of the Law.
It is noted that according to Section 26 of the Law, in the case of a concentration for which a full investigation is carried out, persons who may be affected directly by the decision of the Commission but who do not participate in the concentration, may apply and be granted the opportunity to submit their views regarding the concentration in such a manner and at such time as not to violate the time limit set in Section 27.
COMMISSION FOR THE PROTECTION OF COMPETITION