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Decisions

Acquisition by Festi hf. of Lyfja hf

  • Get document
  • Case number: 32/2024
  • Date: 23/12/2024
  • Company:
    • Lyfja hf
    • Festi hf.
  • Sectors:
    • Consumer goods, supplies and etc.
  • Policy Area:
    • Mergers
  • Summary

    With this decision, in accordance with Article 17 of the Icelandic competition law, the Icelandic Competition Authority (ICA) has completed its assessment of the acquisition of Lyfja hf. by Festi hf. The investigation concluded with a settlement of the merger. The remedies and conditions agreed upon are i) that Heilsa ehf. will operate independently from Festi in the wholesale of health products, and ii) that Festi and Lyfja will abolish non-competition clauses in the employment contracts of pharmacists.

    Festi operates stores, such as, Krónan (a grocery chain), N1 (gas stations) and Elko (electronic stores) across Iceland. while Lyfja runs pharmacies, also across the country, and owns the wholesaler Heilsa that, amongst other, imports and produces vitamins. Both Festi and Lyfja hold strong positions in the markets which they operate.

    Both companies operate in the market for retail sale of sanitary and cosmetics products and in the market for retail sale of vitamins, minerals and supplements. The investigation revealed a considerable concentration in both markets in certain regions of the country, especially in the East and South of Iceland.

    The merger also affects the wholesale market for the import and distribution of health products. Competitors in the retail market expressed concerns regarding the possibility of reduced and unequal access to products that Heilsa, Lyfja's daughter company, sells in wholesale.

    The merging parties are not considered to be close competitors in the sale of the products concerned, online shopping is a viable option in the regions where concentration is the highest and the products are not of the kind that the consumer needs to buy them frequently. Festi also announced plans to increase the level of service, e.g. home delivery of goods, in more rural areas and both Festi and Lyfja have a policy regarding the same price for products in all stores over Iceland.