The Georgian Competition and Consumer Agency (GCCA) has approved the concentration of “Georgian Beer and Beverages Holding” LLC (a subsidiary of the Dutch Royal Swinkels), through the acquisition of 100% of shares in “Global Beer Georgia” LLC, “Genuine Brewing Company” LLC, “Global Coffee Georgia“ LLC, and “Georgia Distribution and Logistics” LLC.
The Georgian Competition and Consumer Agency (GCCA) conducted an assessment of the beer, soft drinks, and coffee import markets. In 2023, the beer market comprised 75 companies, with a total market volume of 131 709 495 liters and a market concentration index (HHI) of 2 273. While the HHI slightly exceeds the threshold for a moderately concentrated market, the presence of companies larger than the target entity, along with a balanced and competitive market structure, supports the approval of the merger.
In 2023, the non-alcoholic beverages market included 215 companies, with a total market volume of 464 757 669 liters and a market concentration index (HHI) of 2 590 indicating a highly concentrated market. However, the index is not influenced by the market position of the parties involved in the concentration.
LLC „Georgian Distribution and Logistics“ operates in the distribution services sector. In 2023, the distribution service market had a total volume of 7 431 011 772 GEL, with a market concentration index (HHI) of 400, indicating a low level of concentration.
LLC „New Coffee Company“ is active in the coffee import market. This market, comprising 200 economic agents, had a total volume of 6 625 788 kilograms in 2023 and a market concentration index (HHI) of 1 721 signifying a moderately concentrated market.
In its assessment of the concentration, the Agency considered that a single entity already owns 100% of the shares in the companies involved. This indicates that the companies were already part of the same group, and their grouping is not a result of the proposed concentration. Consequently, there is no risk of coordinated or uncoordinated effects stemming from the new arrangement. Additionally, the concentration index remains unchanged across all relevant markets, as “Georgian Beer and Beverages Holding” LLC does not operate in these markets, nor do its parent companies have operations within the Georgian market.
Based on the Agency's market analysis, including the structure of the assessed markets and the market shares of the parties involved, the proposed concentration is not expected to have a significant impact on the competitive environment.
Georgian Beer and Beverages Holding, a subsidiary of Royal Swinkels, is registered in the Netherlands and operates in Georgia. Royal Swinkels is one of the largest beer producers in the European Union, with a portfolio that includes the well-known brand 'Bavaria,' familiar to the Georgian market.
“Global Beer Georgia“, part of the Georgia Capital group, is the official producer and distributor of Kazbegi, Ice, and renowned international brands such as Heineken, Amstel, and Krusovice in Georgia. Additionally, “Genuine Brewing Company“ produces Georgia's first craft beer, “Shavi Lomi”. Georgia Capital is set to receive at least $63 million in exchange for a controlling stake in the company.
According to Georgian law, a concentration must be notified in writing to the GCCA if the combined total income of its participants within Georgia exceeds 20 million GEL for the previous financial year and if at least two participants individually generate an income exceeding 5 million GEL. Failure to notify the GCCA before implementing such a concentration, or proceeding despite a negative conclusion, will result in fines for the responsible party.
In 2024, the Georgian Competition and Consumer Agency (GCCA) approved 14 concentrations, with 6 cases currently under review.
