23 May 2002
The FCA has cleared an acquisition whereby the Orion Group acquired majority ownership in the Swedish pharmaceutical distributor Kronans Droghandel AB.
Prior to the acquisition, three pharmaceutical distributors operated on the Finnish pharmaceutical wholesaling market: Oriola, a subsidiary of the Orion Group; KD Tukku, the Finnish subsidiary of the Swedish Kronans Droghandel and Tamro. KD Tukku commenced operations in 1999 on the Finnish market. As a result of the acquisition, there again remain two full-service wholesalers in Finland.
The acquisition was cleared as, according to the FCA’s estimate, the creation or strengthening of a dominant position is unlikely in a situation where there exist two almost equally powerful market operators. The acquisition is not estimated to have a major effect on the pharmacy business either, as the regulation in the field restricts the operations of the pharmaceutical wholesalers by obliging them to have a required minimum amount of drugs for sale.
A so-called single channel system is used in the Finnish pharmaceutical wholesaling: only one wholesaling company distributes the products of each pharmaceutical manufacturer. The wholesaling companies compete with each other on the client deals of pharmaceutical manufacturers or their Finnish representatives. Competition has resulted in pharmaceutical manufacturers changing their distribution channels repeatedly. Manufacturers thus have bargaining power, which efficiently limits the market power of the wholesalers.
Director Juhani Jokinen
Senior Reseach Officer Minna-Maija Mäenpää