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Competition Authority puts restrictions on Beijer Ref over merging of HRP operations

Enforcement order requires Beijer Ref to run HRP as a separate business, without any further merging with other UK operations until the Competition and Markets Authority investigation is complete

An initial enforcement order from the Competition and Markets Authority will see wholesaler Beijer Ref placed under a series of restrictions with respect to its recently acquired HRP business. The order is designed to stop further merging of the HRP business until the CMA is satisfied that the purchase has not led to substantial lessening of competition in the wholesale market.

The order states that under the Enterprise Act an enforcement order is being placed because ’The CMA has reasonable grounds for suspecting that it is or may be the case that Beijer Ref and HRP Holdings have ceased to be distinct [and] the CMA is considering, pursuant to section 22 of the Act, whether it is or may be the case that a relevant merger situation has been created and whether the creation of that situation has resulted or may be expected to result in a substantial lessening of competition in any market or markets in the United Kingdom.”

Although it only covers the period from February 25 to March 10, the series of restrictions is extensive. It will among other things: prevent Beijer Ref ‘without prior written consent’ from the CMA taking any action that might ”lead to the integration of the HRP business with the Beijer Ref business; transfer the ownership or control of the Beijer Ref business or the HRP business or any of their subsidiaries; or otherwise impair the ability of the HRP business or the Beijer Ref business to compete independently in any of the markets affected by the transaction.”

Perhaps most significant, in light of the fact that Beijer Ref has put the staff of HRP Rougham on notice of risk of redundancy, the enforcement order requires that ”no changes are made to key staff of the HRP business or Beijer Ref business;[and] no key staff are transferred between the HRP business and the Beijer Ref business; [and] all reasonable steps are taken to encourage all key staff to remain with the HRP business and the Beijer Ref business;”

The enforcement order goes into detail about the restrictions it places on Beijer, without prior written consent,including: carrying on the HRP business separately from the Beijer Ref business and ensuring ’the HRP business’s separate sales or brand identity is maintained.

Beijer is required to maintain HRP as a going concern: “and sufficient resources are made available for the development of the HRP business and the Beijer Ref business, on the basis of their respective pre-merger business plans.

Other requirements include that, ”except in the ordinary course of business, no substantive changes are made to the organisational structure of, or the management responsibilities within, the HRP business or the Beijer Ref business; [and] the nature, description, range and quality of goods and/or services supplied in the UK by each of the two businesses are maintained and preserved;

Beijer Ref is also prevented from disposing of HRP assets until the investigation is complete, and even from integrating the back office IT of HRP with other busineses.

Furthermore,, the order states: “The customer and supplier lists of the two businesses shall be operated and updated separately and any negotiations with any existing or potential customers and suppliers in relation to the HRP business will be carried out by the HRP business alone and for the avoidance of doubt the Beijer Ref business will not negotiate on behalf of the HRP business (and vice versa) or enter into any joint agreements with the HRP business (and vice versa).”

Underlining the severity of the measure, the CMA said it reserves the right to appoint an independent ’monitroring trustee’ to ensure that the strictures are kept to.




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