Haitai Ice Cream

Sep 29, 2020

1 2020.09.29 14:43:04 | 2020.09.29 15:32:48 Receiver The Korean ice cream market now has two primary players after Binggrae Co.’s acquisition of No. 4 Haitai label gained clearance from local antitrust authority. Binggrae on Tuesday received the final nod from the Fair Trade Commission on its deal to take over 100 percent stake in Haitai IceCream from Haitai Confectionery & Foods Co. Binggrae has been waiting for the antitrust authority’s approval since April, after signing the stock purchase agreement for 140 billion won ($119.7 million) in late March. Binggrae now becomes Korea’s top ice cream company, based on market share held by a single firm, with the addition of Haitai IceCream. It would command 40.1 percent of the market with 12.2 percent of Haitai IceCream under its arm. The company had been No. 2 after Lotte Confectionery Co. who accounted for 32.5 percent of the market in the first quarter this year. The third largest was Lotte Food Co., another Lotte Group member, with 14.1 percent share. The reorganization will leave two players – Binggrae versus Lotte – in the ice cream market. Price hike is unlikely even after Binggrae moves to the dominant position as the move could lose consumers to Lotte, said Lee Sung-kyu, an FTC official. Separately, Haitai Confectionery & Foods would be able to advance forward with its normalization efforts upon completing the sale deal. The company in January spun off its ice cream business as a standalone company as losses piled up due to slump in local frozen dessert market. The ice cream market shriveled to 1.4 trillion won last year from 2 trillion won in 2015. Haita reportedly plans to focus on its mainstay business of snacks. On Tuesday, Binggrae shares closed 4.68 percent lower at 59,000 won and Haitai Confectionery & Foods down 6.22 percent at 8,900 won in Seoul. By Baek Sang-kyung and Cho Jeehyun TUE