The Commission for the Protection of Competition (hereinafter the “Commission”) at its meeting held on 24/02/2017, examined the notification of a concentration concerning the creation of the company VLPG PLANT LTD (hereinafter the "New Company") by the companies Hellenic Petroleum Cyprus Ltd, Petrolina (Holdings) Public Ltd, Intergaz Ltd and SYNERGKAZ Ltd (hereinafter the "Companies"). Based on the information in the notification, the Companies will relocate part of their activities relating to the storage and handling of liquefied petroleum gas to the New Company.
The Commission at its meeting, after taking into consideration the written report of its Service found 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, after taking into account all the relevant information that compose the proposed concentration, unanimously decided that such concentration raises doubts as to its compatibility with the functioning of competition in the storage and handling of liquefied petroleum gas market in which the New Company will operate, and the import and wholesale of liquefied petroleum gas markets that the Companies operate. Specifically:
· The notified concentration might significantly impede competition in relation to the horizontally affected market for storage and handling of liquefied petroleum gas by removing important competitive pressures, due to the fact that the Companies are the only ones that will operate in this market, through the New Company, and in addition, two of Companies, Petrolina (Holdings) Public Ltd and SYNERGKAZ Ltd hold together a warehouse for liquefied petroleum gas in Paphos. The elimination of these competitive constraints could lead to the abuse of the newly created monopoly position of the New Company. The New Company may have the ability and motivation to exploit its dominant position and to hinder the expansion of other companies and potential competitors and there is the potential for significant obstruction of competition as a result of the creation of its dominant position,
· through the joint storage and management of liquefied petroleum gas of the Companies, the notified concentration may facilitate them to agree on the terms of their coordination either in the upstream affected market, namely the import market for liquefied petroleum gas, and/or in the downstream affected market, namely the wholesale of liquefied petroleum gas and/or to exclude potential competitors, since the Directors of the New Company, in their majority, are also Directors of the Companies,
· through the vertical integration, the Directors of the New Company, the majority of whom are the same as the Directors of the Companies, may gain access to commercially sensitive information regarding the activities of potential competitors in the up-stream or down-stream market, resulting in placing the potential competitor in a competitively disadvantageous position, thereby making entry or expansion in the market for liquefied petroleum gas precavious.
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 for 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 and following an application by persons who may be affected directly by the decision of the Commission but who do not participate in the concentration, these persons are 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