The Supreme Administrative Court, acting as the second and final instance, recently repealed the Commission for the Protection of Competition's (CPC's) clearance for the acquisition of Pharmastore OOD by Sopharma Trading AD.
When the CPC investigated the merger, it concluded that the Sopharma group vertically integrates Sopharma AD (producer), Sopharma trading (wholesaler) and Sopharmacy (retailer), therefore operating on three vertically integrated levels.
The CPC concluded that there was no vertical integration between Sopharma and CHS and the total market share of Sopharma and Pharmastore on the retail level lies between 0% and 5%. Therefore, Sopharma has no substantial market power on any of the three markets in which it operates.
In its decision, the Supreme Administrative Court ruled that the CPC had failed to analyse the de facto vertical links between Sopharma and CHS. It therefore repealed the clearance and sent it back to the CPC with mandatory instructions to investigate the potential vertical links.
However, in the meantime the CPC cleared the acquisition of CHS by Sopharma in Phase I. In view of the Supreme Administrative Court decision, it seems unlikely that this clearance will withstand the test of appeal.
