Presidencia de la Nación

The National Commission for the Defence of Competition (CNDC) has issued an Objection Report under Section 14 of Act 27.442 of Defence of Competition concerning the transaction in which NATURA acquires AVON.

Brazil-based NATURA is a cosmetics and personal care retailer, while AVON is an American company that sells beauty, fashion, and home products globally. Both companies sell primarily through direct sales or resellers by catalogue.

After a thorough analysis, the CNDC concluded that the transaction has horizontal effects in multiple market segments of beauty products and personal care. In particular, there are concerns in the market for coloured cosmetics, in which the companies would have a market share of 40%, and in the massive fragrance market, where the whole share would increase to 53,7%.

Even if the concentration levels are high in two specific segments, the parties have offered to state some mechanisms to mitigate their potential effects. The CNDC will assess quantifiable and believable proposals related to entry barriers, portfolio effects, efficiency gains and other benefits for the general economic interest that may arise from the transaction. NATURA claimed that following the acquisition, it would invest in shoring up the local manufacture of its products, suggesting a replacement for imports, which currently account for over 70% of its Argentine sales.

Under Argentina's competition law, the CNDC releases an "Objection Report" whenever it finds that a transaction might potentially restrict or damage competition. The parties will then be called to a special hearing to review possible remedies to lessen the transaction's impact on competition.