The Czech competition authority, the UOHS, is investigating reports that the bottled water company, Karlovarske Mineralni Vody (KMV), is already managing the companies, Podebradka and Hanacka Kyselka before it has officially been given the official go-ahead to acquire them.

"No competitor is allowed to influence entities to be taken over until the UOHS permits it to do so," said UOHS chairman, Josef Bednar. The UOHS did in fact block the merger of KMV, Podebradka, and Hanacka Kyselka last autumn, but KMV, part of Netherlands-based Ronaldsay BV, appealed against the decision. Bednar expects the appeal proceedings to be concluded within the next two to three weeks.

The penalties if companies are found to be in breach of Czech competition law are severe. "Any step against the competition law may possibly lead to a fine worth up to 10% of turnover for the previous year for all parties involved," said Bednar.

KMV, which already owned a 35% stake in Hanacka Kyselka, bought a 100% interest in Podebradka at the end of last year, effectively giving it 80% of the Czech mineral water market.