What should you keep in mind from now on?

What should you keep in mind from now on?

The Secretariat of Commerce, led by Matías Tombolini, established this Thursday new requirements for companies that want to buy or merge with another, in order to promote and preserve competition in the domestic market.

The new Regulation for the Notification of Economic Concentration Operations was approved through Resolution 905/2023 published in the Official Gazette and replaces the one in force until now, approved in 2001 and based on Law 27,442 on the Defense of Competition.

“Considering that more than 20 years have passed since the issuance, it is timely and necessary to update it”they justified from the Secretary of Commerce, which now seeks to regulate the procedure by which the notification of the acts of economic concentration will be carried out to examine them.

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The new regulation provides that Companies involved in presumed acts of economic concentration must report the size of the market and their participation, as well as that of their main competitors, and any product offered whose participation exceeds 50% of the total offer..

This decision determines that the National Commission for the Defense of Competition must establish, within the next 15 days, the technical criteria to determine in which cases the notified concentration operations may qualify for the anticipated summary procedure.

In turn, companies must indicate in which geographical areas of Argentina each product they make is offered, as well as identify the substitutes and indicate where in the country they are located and what their production processes are like.

Also they will have to explain the characteristics that a company should have to start production or commercialization of the products involved and of the substitutes in the short term, in accordance with the provisions.

P10 – Matias Tombolini_opt.jpeg

Matias Tombolini

Other requirements to be met are identify competitors with more than 5% share within each of the markets that are analyzed, and indicate whether in the last three years new competitors have entered or existing competitors have launched new products or have repositioned existing ones in relevant markets.

The regulation also stipulates that it will be necessary explain how the market for the products involved and substitutes has evolved over the last three years in terms of its size, prices, new offers and technologies and how it will evolve in the coming years.

Meanwhile, companies will have to inform if the sales policies of the products include mechanisms that reward consumer loyaltysuch as “frequent flyer” programs.

Within the extensive list of requirements, there is also the need to explain what Investments a company should make in advertising, branding, distribution logistics, production facilities to begin offering substitute products in the short term.

The regulation also contemplates the request for information on how they are transported and what are the transportation costs of the products involved and of substitutes, and what percentage this cost represents over the price at the factory gate.

Source: Ambito

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