Retail Monopoly Could be Broken Up Skip to content

Retail Monopoly Could be Broken Up

Althingi Parliament could decide to break up the retail empire built by Hagar retail giant, said Gísli Tryggvason, the ombudsman of consumers, to RÚV.

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Althingi. Photo: IPA

Arion Bank, former Kaupthing Bank, now controls the supermarket giant which has about 55 percent marketshare in groceries. The bank has now decided to sell the supermarket chain 10-11 which was bought by Baugur Group in 1999.

According to the Competition Board the market share of Baugur in groceries was then increased from about 50 percent to 58 percent. Baugur, now Hagar, also runs the supermarket chains Hagkaup and Bónus.

Tryggvason said that Althingi could order a complete breakup of the giant to secure active competition in the groceries market.

The Competition Authorities have long held the opinion that Hagar is much too big for the market. It has run 61 supermarkets. Even though 10-11 will be sold the giant will still control about 50 percent of the market.

Tryggvason said that the move by Arion Bank to sell the 10 -11 chain was positive but called for a further break-up of the empire. Both consumers and grocers have repeatedly pointed out that active competition in the grocery market has been blocked by the sheer size of Hagar.

He said that the two big supermarket chains Bónus and Hagkaup had been merged before the competition laws were set in 1993. That had not been a coincidence because the owners had known what was going to happen. Now the time had come to act upon this and if the bank would not do it then it would be possible for the lawmakers to act.

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