Competition Authority Notification - Bimeda Chemicals Ltd and Orion Yhtyma Oy

 
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COMPETITION AUTHORITY

Decision No. 545

Competition Authority Decision of 16 April 1999 relating to a proceeding under Section 4 of the Competition Act, 1991.
Notification No. CA/994/92E - Bimeda Chemicals Limited/Orion Yhtyma Gy.
Abstract:

Competition Law – Exclusive manufacture and distribution agreement – Application for certificate or licence – Whether agreement constituted a restriction on competition – Whether agreement necessary to allow parties to enter a competitive market - Competition Act 1991, s. 4(2) and s. 4(4)

COMPETITION AUTHORITY
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Competition Authority Decision of 16 April 1999 relating to a proceeding under Section 4 of the Competition Act, 1991.

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Notification No. CA/994/92E - Bimeda Chemicals Limited/Orion Yhtyma Gy.

Decision No. 545
Price £0.50
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£0.90 incl. Postage

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Competition Authority Decision of 16 April 1999 relating to a proceeding under Section 4 of the Competition Act, 1991.

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Notification No. CA/994/92E - Bimeda Chemicals Limited/Orion Yhtyma Gy.

Decision No. 545
Introduction
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1. Notification was made by Bimeda Chemicals Ltd on 30th September 1992 with a request for a certificate under Section 4(4) of the Competition Act, 1991 or, in the event of a refusal by the Competition Authority to grant a certificate, a licence under Section 4(2) in respect of an exclusive distribution and manufacture agreement.

  1. (a) Subject of the Notification

    2. The notification concerns an exclusive manufacture and distribution agreement, dated 10th December 1990 between Bimeda Chemicals Limited (Bimeda) and Orion Yhtyma Oy (Orion) for the manufacture and sale of pharmaceutical products in the State.

  2. (b) The Parties Involved

    3. Bimeda is a subsidiary of Cross Vetpharm Group Limited which is a wholly owned subsidiary of The Cross Group, which is the largest Irish owned manufacturer and distributor of veterinary pharmaceuticals. The registered offices are at Broomhill Road, Tallaght, Dublin 24. The Cross Vetpharm Group has seven subsidiaries, of which Bimeda Chemicals is one, and it sells its own range of products exclusively to veterinary surgeons in Ireland. Orion is a Finnish pharmaceutical company and is part of the Orion Group 1 which is the leading company in the Finnish health care sector, with a registered address at P0 Box 65, 02101 Espoo, Finland.

  3. (c) The Products and the Markets

    4. The products which are the subject of this agreement are veterinary pharmaceutical products. The products are the two intramammaries,Kefamast and Kefamast Dry Cow.Bimeda Chemicals imports the concentrate from Orion and converts to a finished product form in 4.5gm sterile syringes. Intramammaries are treatments for the prevention of mastitis in cows.

  4. (d) The Structure of the Market

    5. The intramammary market is estimated at IR£3.8m in annual sales value, with IR£2.3m in dry cow treatments and the balance, IR£1.5m in lactating treatments. The following Table shows the market shares for each of the products and sales as a percentage of the total relevant market for year ended December 31 1997:

    1 Business divisions related to health care include the pharmaceutical division, Orion Pharma, the wholesale company Oriola, and Orion Diagnostica.

    Product Category

    Total Market

    Sales of Kefamast

    Kefamast Sales as % of total

    £,000

    £,000

    %

    Dry Cow Intramammaries

    2,300

    48

    2.1%

    Lactating Cow Intramammaries

    1,500

    13

    0.9%

    Total

    3,800

    61

    1.6%

    6. The notifying party submitted that there were twelve competing products in the lactating cow intramammary market and eleven competing products in the dry cow intramammary market in 1996/97. The main products and their estimated market shares area as follows: in the Dry Cow Therapy market there are Cepravin (19%), Orbenin DC (19%), Leo Dry Cow (10%) and Synolux DC (10%); and in the Lactating Cow Therapy, there are Tetra Delta (22%), Terrexine (12%), Multimast (12%), Leo Yellow (8%) and Orbenin (7%).

    7. The Authority is of the view that the relevant market is the market for intramammaries which are used in the treatment for the prevention of mastitis in cows.

  5. (e) The Notified Arrangements

    ...

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