NEW YORK (The Deal) -- The Latvian and Danish coffee markets may be small, but they are important in the European Commission's conditional approval of a coffee joint venture between U.S. snacks giant Mondelez International (MDLZ) and its Dutch partner, D.E. Master Blenders.
The European Union executive's Competition Directorate on Tuesday said its approval for the creation of Jacobs Douwe Egberts was subject to the disposal of Mondelez' Carte Noire coffee business and D.E. Master's Merrild business across the entire European Economic Area,, which includes the EU member states, plus Iceland, Liechtenstein and Norway The new venture would also have to license its Senseo brand in Austria.
"The Commission had concerns that the transaction, as initially notified, would have led to price increases in roast and ground coffee products in France, Denmark and Latvia, as well as in filter pads in Austria and France," the Brussels-based European Commission said in a statement.
And it quoted Competition Commissioner Margrethe Vestager, a former Danish deputy prime minister, to add flavor to the ruling.
"Many of us drink coffee and appreciate having a choice," she said. "Today's decision will ensure that consumers can continue to enjoy a variety of coffee brands and types at competitive prices."
The ruling opens the way for rival branded coffee sellers, such as Italy's Luigi Lavazza SpA, to bid for one or other of the businesses. Reuters reported earlier this year that Lavazza had the right of first refusal on Carte Noire, if the proposed disposal was agreed by Brussels.