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The Competition Authority closes the investigation on milk by-products, finds no violations

2024-11-26 07:23:00, Aktualitet CNA

The Competition Authority closes the investigation on milk by-products, finds no

The Competition Authority closed this month the in-depth investigation in the market of production and wholesale of dairy by-products (cheese and butter) against the enterprises Erzeni, Gjirofarma, ADG (Lufra) and Shaka Boboshtice.

From the investigation, no direct or indirect evidence of cooperation between the companies was found and no signs of an agreement or concerted behavior were observed between them, according to the provisions of the law "On the protection of competition".

Also, taking into account the criteria for evaluating the dominant position, such as the market share of companies, barriers to market entry, potential competition, countervailing power of buyers, economic and financial power of companies, it turns out that there are no companies with a dominant position in the market relevant.

Despite these conclusions, the Competition Authority assesses that the problems encountered during the investigation require the taking of some measures by the relevant institutions.

For this reason, the Competition Commission decided to recommend the National Food Authority to strengthen its role for the rigorous implementation of controls in terms of the quality and microbiological parameters of milk as a raw material.

Also, it is recommended for the Ministry of Finance to undertake initiatives for an "Integrated Strategy in the fight against informality" as the competent and responsible institution for preventing and fighting informality in the market.

It is recommended to the Ministry of Agriculture and Rural Development to undertake the initiative for drafting and revising the by-laws issued pursuant to law no. 9441, dated 11.11.2005, in order to regulate them and increase competition in the market, based on the problems found in the market of production and trading of milk and its by-products; undertake the initiative to create a database for monitoring retail prices of basket products (dairy by-products), with the aim of increasing competition through transparency and better comparability of these online prices.

Regarding the increase in the price of dairy by-products (mainly during 2022), the Competition Authority has concluded that the main reason is the increase in the price of fresh milk from farmers, which is the raw material for the by-products that are produced.

According to farmers, the reasons for the increase in the price of milk are: the increase in the cost of the food base of livestock; the reduction in the number of heads, which is also confirmed by INSTAT statistics, because the number of heads that are bred in our country has decreased; increase in the price of plastic (packaging), fuel, gas and electricity.

Regardless of the above, in the evaluation of the average monthly purchase price from the companies Erzeni, Gjirofarma and Shaka Boboshtice, it turns out that there are approximate prices (it varies in the range from 1.1 Lek to 4.58 Lek) during the months of January, February, March of 2022.

In June, July and October of 2022 and in November of 2023, a very approximate purchase price (varying in the range from 0.6 to 1.7 Lek) from Shaka Boboshti?a and ADG enterprises is observed.

In February and December of 2023, a very approximate price (varies in the range from 0.3 Lek to 1.3 Lek) purchase from Gjirofarma and ADG enterprises is observed.

For the period January-June 2024, it is noted that in the month of June all enterprises have the cheapest purchase price. From the analysis of the average monthly prices for the purchase of cow and goat milk for the enterprises Erzeni SHPK, ADG, Shaka Boboshti?a and Gjirofarma, it is noted that they are different from each other with differences ranging from 0.3 - 46% for the milk of cow's milk and from 0.3% - 27% for goat's milk throughout the investigation period, not observing signs of concerted behavior in the sense of Article 4 of the law no. 9121/2003 "On the protection of competition";

The enterprises under investigation for the investigation period supplied milk raw material to different farmers in different geographical areas and as a result did not use common supplies.

Regarding the rate of profit for 2023, the companies operating in the sub-markets of production and sale of cheese and butter products have a rate of profit of up to 13.8%, while the companies under investigation: Erzeni, ADG, Gjirofarma, Shaka Boboshti?a have a rate of profit from 2% to 7%, so less than 10%.

In relation to the average monthly sales prices of the sheep's goat cheese product, applied by the companies Erzeni, ADG, Shaka Boboshtice and Gjirofarm, the analysis carried out confirms that they are different from each other with differences ranging from 1% - 64% throughout the investigation period and the pace of their change is different.

Through the same analysis, it also results that the average monthly sales prices of the white sheep's cheese product applied by the companies Erzeni, Shaka Boboshti?a and Gjirofarma are different from each other, throughout the investigation period and the pace of their change is different. not noticing signs of concerted behavior in the sense of Article 4 of Law no. 9121/2003 "On the protection of competition"./ Monitor magazine