INQUIRY INTO THE COMPLETED ACQUISITION BY COLOPLAST A/S OF SSL’S CONTINENCE CARE BUSINESS

Remedies Statement

The Competition Commission (the Commission) has sent remedies letters, on a purely hypothetical basis, to Coloplast A/S in its inquiry into the acquisition of the continence care business of SSL.

The Commission has as yet reached no conclusions on any matter, in particular as to whether the acquisition of the continence care business of SSL by Coloplast operates or might be expected to operate against the public interest. However, if the Commission reached any adverse findings on the acquisition, it would wish to make appropriate recommendations for remedies to the Secretary of State. This statement of hypothetical remedies is being made public to inform all interested persons, should they wish to comment or to raise further points with the Commission. In particular, comments are invited on the likely effectiveness, costs and practicability of the remedies that have been set out. Any such comments should reach the Commission by Tuesday 16 April.

The Commission invites views on the following possible remedies:

(A) Structural remedies

Divestment of business acquired from SSL as a whole
Divestment of sheaths business acquired from SSL
Termination of the Coloplast agreement with Mentor, either wholly or to such extent as may be specified, and/or prohibition on carrying out actions under the agreement
Divestment of Coloplast’s pre-acquisition sheaths business
Divestment of ThackrayCare and/or the Thackray nursing service
Divestment of one or more Dispensing Appliance Contractors (DACs)
Requirement to grant an exclusive license to the intellectual property rights in Conveen sheaths, and to enter into such other arrangements as may be necessary to enable the business of manufacturing and/or supplying these sheaths to be conducted efficiently by the licensee in the UK, on terms and to persons approved by Director General of Fair Trading (DGFT)

(B) Behavioural remedies

Price controls over any or all of Coloplast intermittent catheters, sheaths and bags supplied to hospitals
Cap on value of products supplied through Coloplast DACs
Requirement on Coloplast DACs to supply a full range of products available under the Drug Tariff
Requirement on Coloplast to publish such information on sales through Coloplast DACs as may be required by DGFT
Requirement to ensure that the ThackrayCare nursing service remains an independent continence care advisory service, including a prohibition on introduction of incentives for Thackray nurses to recommend Coloplast products
Requirement on Coloplast to collect and publish information on recommendations of Thackray nurses
Requirement that Thackray nurses identify themselves to patients as Coloplast employees

Notes to Editors

The reference was made by the Secretary of State for Trade and Industry, under sections 64 and 69(2) of the Fair Trading Act 1973, on 14 January 2002 (see DTI news release P/2002/017). The Competition Commission will submit its report to the Secretary of State by 13 May 2002. It will subsequently be published.
The Statement of Issues was set out in Competition Commission News Release 18/02, dated 21 March 2002.
This inquiry is being undertaken by a group of five Commission members and is led by Mr Arthur Pryor CB, former Head of Competition Policy at the Department of Trade and Industry. The other members are Professor John Ballie, a consultant accountant, Professor David Parker, Professor of Business Economics and Strategy at the Aston Business School, Mr Stephen Walzer, Assistant General Counsel (International Legal Affairs) at British American Tobacco plc and Mr Alan Young, a director at the consultancy firm of Webster Young Ltd.
Further information can be obtained from the Commission’s website at www.competition-commission.org.uk/inquiries/coloplast.htm
Enquiries should be directed to: Francis Royle, Press Officer (020 7271 0242).