The National Commission for the Defense of Competition (CNDC) has conditionally approved the merger of beauty and personal care giants Avon and Natura, subject to compliance with specific behavioural measures to address competition concerns. Following recommendations from the CNDC, Argentina’s Secretary of Industry and Commerce has mandated the companies implement these measures, intended to preserve competition and limit potential market dominance in two high-impact segments: color cosmetics and mass fragrances.
The CNDC’s investigation raised concerns over potential barriers for new entrants and the risk of portfolio effects. Avon and Natura collectively hold a 40% market share in color cosmetics and nearly 54% in mass fragrances in Argentina. To address these issues, the companies agreed to:
- Eliminate Exclusivity Clauses: Avon and Natura will avoid exclusivity agreements with third-party manufacturers, suppliers, and resellers, facilitating a more competitive landscape.
- Ensure Individual Product Sales: The companies must allow consumers to purchase items in the color cosmetics and mass fragrance categories individually, even if they are included in promotional kits, enabling consumers to access specific products without being tied to bundled deals.
These measures aim to lower barriers to entry and encourage competition within the direct sales channel where both companies operate. The conditions are effective for three years, with Avon and Natura given three months to adjust their operations.
