Arcor is an Argentine multinational group that specializes in three business divisions: consumer food, agribusiness and packaging; while Ingredion is a leading American multinational group in ingredient solutions for the food and beverage industry.
After the analysis of the operation, The CNDC concluded that the operation generates a direct effect, which is the disappearance of an independent competitor and a significant increase in the concentration in the corn wet milling markets and in the marketing of its derivatives.
In addition, possible vertical effects were verified, since the acquisition in question would have the potential to allow the practice of exclusionary conduct in relation to ARCOR’s competitors in “downstream” industries, in terms of market closures, increased costs , increased barriers to entry, among others.
It is important to note that the derivatives of wet grinding are used as inputs for the food, beverage, paper and pharmaceutical industries.
The CNDC issues an Objection Report when it considers that the notified operation has the potential to restrict or distort competition in a market. For this reason, it will summon the parties to a special hearing aimed at analyzing the possible measures that mitigate the negative effect of the concentration operation on competition.
In this regard, the Secretary of Domestic Trade, Robert Felettiindicated: “As a Government, we pursue two purposes with this decision: 1) Take special care of the rights of families and consumers, especially in the case of essential goods such as food, and 2) Promote the diversification of the productive structure and sources of work”.
“We cannot legitimize a business structure in which a large company concentrates the various links in the chain, to the detriment of the smaller players. If we accepted this, we would be recognizing business plans where the only thing that is weighted is the profitability of companies, without considering how this impacts popular consumption,” Feletti said.
In addition, he stressed that “we cannot get out of the pandemic by reproducing the same patterns and models that prevailed before. For that, we have to give a serious discussion about these behaviors of large companies, which only prioritize their profits, ignoring the way in which this impacts about citizenship.
Source: Ambito
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