Ireland’s competition watchdog has concerns that French workwear and linen rental group Elis’s proposed acquisition of an Irish commercial laundry services company could lessen competition in the market, leading to higher prices for the hospitality sector.
The Competition and Consumer Protection Commission (CCPC) launched an investigation into Elis’s proposed deal for Mayo-based OCL Laundry Services last year.
On Monday, the watchdog said it had “provisional concerns” that the acquisition “may substantially lessen competition in the provision of flat linen rental and maintenance services in the State, which could lead to higher prices, lower quality and reduced innovation in the market”.
In a statement, the CCPC said this was a preliminary, rather than a final decision, and the two parties to the deal can now make written submissions to the watchdog.
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“The parties can also request to make oral submissions and request access to the CCPC’s non-confidential file,” it said. “The CCPC will review any additional evidence received and come to a view on whether the merger could lead to a substantial lessening of competition in its final determination.”
Elis and OCL both maintain and rent out flat linen – products like towels, ironed bed sheets, pillowcases and tablecloths – chiefly to the hospitality sector.
“The maintenance services offered by both companies include the collection, sorting, washing, drying and folding of linen for hospitality customers, including hotels, hostels and B&Bs,” the CCPC said.
“Elis also supplies flat linen services to hospitals and nursing homes. Elis serves hospitality customers from facilities in Co Cork and Co Dublin, while OCL provides services from a single plant in Co Mayo.”
The acquisition was notified to the CCPC last August. On Monday, the commission said that, based on its standard timelines, the investigation should be finalised by the end of July.
