This study evaluates the appropriateness of some merger decisions undertaken by the Autoriteit Consument & Markt (ACM) in the Dutch grocery shopping sector. We analyze three related merger decisions published between 2009 and 2012 and involving major supermarket chains.
We conduct both a qualitative and a quantitative analysis and examine the effect of the mergers on different dimension of competition: price, product variety, provision of qualitative and ancillary services.
We estimated the effect on prices under both the assumption of local and national pricing. The results of our quantitative and qualitative analyses suggest that the three mergers did not impact prices. The effect on product variety, however, are less reassuring. According to our analyses, the last of the three mergers negatively impacted the depth of the product assortment offered by the merging parties and consumers had less choice.
We corroborate these findings by also econometrically testing if the issuance of the divestitures alleviated the negative effects on variety. The results obtained suggest that the divestiture only partially outweighed the reduction in variety caused by the mergers and that additional divestitures could have been needed.