Csemege-Julius Meinl Industrial and Trading Ltd (hereinafter: CsJM) had 49,25 per cent of ownership stakes in Alfa Trading Ltd (hereinafter: Alfa) when in November 1997 CsJM made an agreement of option with Creditenstalt Ltd, according to which CsJM would have purchase Creditenstalt`s 25,85 per cent of stakes in Alfa by November 1999. At the same time they agreed upon the purchase price and the premium of option, paid quarterly by the buyer. From this event the buyer was authorised mandated by the seller, to represent him on the general meetings of the shareholders. CsJM wanted to practise its right of option therefore submitted its application for authorisation to the Office of Economic Competition in June 1999.

The Competition Council examined the application and stated that the joint market share of the food trading companies concerned on the relevant geographic market is relatively low (joint share on the national retail market is 6,1 per cent, on Budapest`s retail market is 9,8 per cent and on the national purchase market is 7,1 per cent). The Competition Council did not consider the concentration as impediment of the effective competition therefore authorised the transaction. Simultaneously, it imposed a fine of HUF 1 million on CsJM because of the delayed application. Under the Competition Act the application shall be submitted within 8 days of the date of the conclusion of the contract or the acquisition of the controlling rights, which of two is the earlier.

In the Competition Council`s view the acquisition of control was already established not later than in December 1997, when a mandate was given to CsJM to take part on the general meetings of Alfa.

November 15, 1999. Budapest

dr. Bodócsi András sk.
Fógel Jánosné dr. sk.
dr. Sólyom Eszter sk.
Szabó Györgyi