We Do Not Have a Dominant Position in the Relevant Market

Baking companies, members of the Grain Community, with just over 53 thousand tons of bread produced in 2006, hold a share of only 46.6 percent of the total bread production in Croatia, indicating that they do not have a dominant position in the relevant market, according to today’s statement from the Association of the Milling and Baking Industry of the Grain Community in response to the public warning from the Council for the Protection of Market Competition related to the announcements of bread price increases.

The Council has warned that any coordinated action by market competitors aimed at price agreements in a market under the auspices of associations or groups to which these entrepreneurs belong is contrary to the regulations on the protection of market competition, and that it constitutes prohibited, cartel agreements. According to the Grain Community, however, this does not constitute monopolistic behavior. For the behavior of the baking companies – members of the Grain Community to be interpreted as monopolistic, certain conditions must be created that can be sanctioned.

Baking companies must have a dominant position in the relevant market, and a violation of Article 15, Paragraph 4, Point 2 of the Law on the Protection of Market Competition must be established, which states that five or more entrepreneurs will be sanctioned if they have 80 percent or more of the joint market share. The Grain Community emphasizes that if the baking companies, members of the Grain Community, sold their total bread production of 53,084 tons in 2006 and did not have a single loaf of bread returned, this would constitute only 46.59 percent of the total registered bread production for the previous year amounting to 113,941 tons.

Therefore, even if the total production of the members of the Grain Community is accepted as market share, which is not acceptable from the perspective of economic science (as production and marketing are diametrically different economic concepts), it is the only somewhat accurate data, as research exists, and there has been no violation of Article 15, Paragraph 4, Point 2, they claim in the Grain Community.  (H)