A proposed acquisition by Central European Distribution Corporation has been thwarted by Poland's competition watchdogs.

The US-based company said yesterday (10 May) that the Polish Anti-Monopoly Office had blocked the potential purchase of Jablonna, the controlling shareholder in Polmos Lublin, a Polish vodka producer.

"Our potential combined market share (CEDC and Jablonna) in the total vodka market would remain under the 40% threshold that is specified under the Polish Anti-Monopoly Act," said CEDC's CEO William Carey. "However, we understand the decision is primarily related to the potential combined market share in the flavoured vodka segment.

"We are surprised by this decision, as according to official government statistics as well as our own estimate of the flavoured market, we believe the potential combined share of the flavoured market is closer to 40%, whereas the anti-monopoly office puts it closer to 50%.

"We will appeal today's decision as we believe our estimates to be accurate thereby not justifying a dominant position in the flavoured market," Carey concluded.

The company pointed out that its 2006 guidance does not include the impact of this potential acquisition as well as any future acquisitions.

CEDC and Polmos Lublin were in competition last year to purchase a majority stake in state-owned distiller Polmos Bialystok. CEDC emerged triumphant in October, making it the largest vodka producer by value in Poland.