THE COMPETITION COUNCIL IMPOSED FINE OF LTL 110,000 FOR FAILURE TO NOTIFY A CONCENTRATION PRIOR TO ITS IMPLEMENTATION

The Competition Council acknowledged that Corporation of European Pharmaceutical Distributors N.V. (former name – Central European Pharmaceutical Distribution N.V.) (further – CEPD) having acquired, on 16 June 2010, 49.999998 percent of shares of UAB „Nacionalinė farmacijos grupė“ without notification to and approval by the Competition Council had infringed the Law on Competition. For this infringement CEPD was fined LTL 110,000.

UAB „Nacionalinė farmacijos grupė“ manages activities of its subsidiary companies engaged in retail and wholesale trade of pharmaceuticals and other goods. The pharmacies controlled by this company operate in many municipalities of Lithuania.

Having conducted the investigation, the Competition Council concluded that the concentration had to be notified prior to its implementation as the before mentioned acquisition of shares is considered a concentration in the sense of the Law on Competition (the transaction resulted in a change of control of UAB „Nacionalinė farmacijos grupė“ – from the common control to the sole control), and the total income of the companies participating in the concentration exceeded thresholds provided for in the Law on Competition.

Although the concentration was implemented in June 2010, the Competition Council was notified thereof only in December 2010. The permission to implement the concentration was issued by the Competition Council in March 2011.

The Competition Council points out that the supervision of implementation of concentrations is carried out in order to prevent companies from strengthening or creating a dominant position and thus making threat to effective competition and to the interests of consumers. Therefore, implementation of concentration without prior notification to the Competition Council is considered a serious violation of the Law on Competition regardless of whether the competition had been restricted or not because of implementation of concentration.