From now on, if a company wants to buy or merge with another, in addition to showing how its operation can affect rivals and consumers in terms of dominance, it will have to carry out a comprehensive market and cost analysis necessary for another company to start competing with it.
Is that the Ministry of Economy has approved the new Regulation for the notification of economic concentration operationsthrough Resolution 905/2023 of the Secretary of Commerce published this Thursday in the Official Gazette.
The standard instructs the National Commission for the Defense of Competition so that, within 15 daysset the technical criteria which make it possible to determine in which cases the notified concentration operations can benefit from the envisaged simplified procedure.
The purpose of the new regulation is regulate the procedure by which the notification will be made of the acts of economic concentration for the purpose of its examination.
It replaces the one that has ruled up to now, approved in 2001and on the basis of Law 27.442 on the Defense of Competition, the purpose of which is to promote and preserve competition in the market in the protection of the general economic interest.
“Considering that more than 20 years have passed since its enactment, it is appropriate and necessary to update it”, states the resolution.
The new regulations require companies involved in alleged acts of economic concentration to report the size and market shareas well as that of its main competitors, and any product offered whose participation exceeds 50% of the total offer.
In the case of products, companies must indicate in which geographical areas of Argentina each is offered, as well identify substitutes and indicate where they are located in the country and what their production processes are like.
Also, they will have to explain the Characteristics that a company should have to start production o Marketing of affected products and short-term substitutes.
They also have to identify competitors which hold a stake of more than 5% in each of the markets analysed.
Similarly, it will be necessary to indicate if new competitors have entered in the last three years or existing competitors have launched new products or repositioned existing ones in relevant markets.
Also explain how the market for affected products and substitutes has evolved over the last three years in terms of them sizes, prices, new offers and technologies, and how it will evolve in the coming years.
Companies will have to specify whether the sales policies of the affected products include mechanisms that reward loyalty consumer, such as frequent flyer programs.
Also, explain what investments should a company make in advertising, creation of new ones brands, logistics distribution, production facilities, among other variables, start offering substitute products short term.
Other information to be provided is the mode of transportation and what the transportation costs of the affected products and substitutes are, and what percentage the transportation cost represents to the price at the factory.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.