The acquisition of the food importer, wholesaler and retailer Good Earth Group by a joint venture between three different local firms can go ahead after a decision by the Malta Competition and Consumer Affairs Authority’s Office for Competition to greenlight the transaction.

The Office for Competition found no objection to the acquisition of Good Earth, saying that although the deal will create further concentration in several food market segments, the combined market shares of Good Earth and those of its acquirers will remain subject to heavy competition.

Good Earth Group consists of Good Earth Distributors and Good Earth Importers. Good Earth Retail, which owns and operates the Good Earth network of retail shops, does not form part of the deal. 

Good Earth Group is now set to be acquired by a joint venture between Francis Busuttil & Sons (Marketing) Limited (FBSM), JCP Holdings Limited (best known for its Dewfresh line of frozen meat products) and Pacikka Holdings Limited (the holding company of Joinwell).

Joinwell and Good Earth share a link through Nicolai De Giorgio, who has joint control over Pacikka Holdings and is a nephew of Good Earth founder Matthew De Giorgio and a shareholder in the firm.

The main concentration of market activity comes from the involvement of FBSM, which is involved in the manufacture, importation and distribution of food, beverages and other consumer goods.

The Office for Competition identified three relevant product categories where the acquisition may impact competition: plant-based milks, teas and cereals.

With regard to plant-based milks, Good Earth is a key importer of the Alpro brand, Malta’s most popular brand of alternative milk, while FBSM imports the Valsoia and Riso Scotti lines. Combined, they significantly exceed the 15 per cent threshold set out for horizontal concentration in the plant-based milk segment.

However, the Office for Competition noted that Alpro’s market share has been declining since 2021, even as its total sales volume has been increasing – denoting the increased competition in the segment. The market share of FBSM’s brands has also been in decline, as have its sales in absolute terms, and it has dropped down the ranking of Malta’s most popular plant-based milk providers.

The Office for Competition therefore determined that it is not in fact a main competitor of Good Earth’s Alpro brand. Additionally, supermarkets also purchase Alpro through other channels via parallel importation, putting another competitive constraint on the business.

The Office therefore concluded that the transaction will not lead to a significant increase in market power for the parties or a substantial lessening of competition, and directly dismissed concerns raised in some third-party objections that the transaction would create a monopoly.

“Competition in the market will persist due to the presence of several other competing brands and private label products, the availability of parallel trade, low barriers to market entry and expansion, and the potential for new competition from established EU brands not yet present in Malta. Any importer in the food distribution industry might decide to import a new untapped plant-based milk brand and supermarkets tend to be willing to accommodate new brands in their shelves as this would increase their customers’ choices,” it said.

The assessment for the tea segment, where Good Earth imports Clipper teas and FBSM imports Tetley and Twinings, concluded that although FBSM’s brands have a major market share, they have been on a downward trend in the face of competitive pressures. The Office for Competition also noted that there are no barriers to entry, and many more tea brands available on the European market.

The Office concluded much the same regarding the cereal market, where FBSM imports the popular Kellogg’s brand while Good Earth imports the Jordans brand and also distributes cereal products under its own brand.

As in the tea segment, even though FBSM’s brand’s market share is “slightly high”, the Office noted that this has been in decline since 2021.

Thus, the Office for Competition concluded that the concentration “will not lead to a substantial lessening of competition in the affected markets, since the involved parties will continue to face strong competition,” allowing the transaction to go ahead.