MERCATOR, d.d., Ljubljana

The decision of the Competition Protection Office

On December 19th 2007, the company Mercator, d.d., received the decision of the Competition Protection Office (hereinafter referred to as CPO), to start an investigation against the said company with regard to alleged violation of abuse of the dominant position in the market of daily consumption products (or FMCG).

The company Mercator, d.d., finds these allegations absolutely groundless, which we believe will be proved in the course of the proceedings to follow.

Following are the most important facts with regard to this matter:

- The company Mercator, d.d., has only a 37 percent market share in the fast moving consumer goods market in Slovenia;

- All relations between Mercator, d.d., and its suppliers and other partners are based on market conditions, taking into consideration business interests of both parties in normal business circumstances, as well as the sound business practice, common in the FMCG markets in Europe.

- The level of competition in the industry of FMCG trade as been increasing for several years and is quite stringent, particularly de to intensive extension of total retail unit area of our existing competitors, aggressive expansion of the new international retailers who have recently entered the Slovenian market, and strengthening of alternative channels for numerous groups of daily consumption products / FMCG.

- Since 2001, the CPO has investigated Mercator's increases of market share in the Slovenian market for three times, upon Mercator's acquisition of other trade companies. Based on analyses conducted, the CPO has found in each respective case that the company Mercator, d.d., did not restrain the competition or committed any other such violation, and consented with all three reported intents of concentration. On December 27th 2001, the CPO issued a decision No. 3071-20/01, which stated that the acquisition of the company Žana, d.d., is in compliance with the rules of competition. On January 30th 2004, the CPO's decision No. 3071-53/03 stated that the acquisition of the company Živila Kranj, d.d., is in compliance with the rules of competition, subject to some conditions that Mercator failed to meet. Lastly, last year, on May 3rd 2006, the CPO issued the decision No. 306-110/2005, stating that the acquisition of the trade operations of the company Era, d.d., is entirely in compliance with the rules of competition.


The public announcement will be also available on the web-site www.mercator.si.

Date: 20. 12. 2007