Malta’s merger watchdog: how blocking big deals protects village life and fuels growth

# Controlling mergers and acquisitions to foster growth, protect competition

**Valletta** – When a family-run Sliema bakery that has supplied ftira to the same street since 1957 is suddenly swallowed by a pan-European frozen-food giant, the ripples are felt far beyond the shop-front. Grandmothers whisper about the change in texture of their morning bread; teenagers notice the price of their ħobż biż-żejt creeping up; and, somewhere in the Office for Competition, a small team of Maltese civil servants opens a file marked “Phase I review”.

Welcome to merger control, Maltese-style: a uniquely delicate balancing act between protecting the island’s tight-knit commercial fabric and allowing businesses the scale they need to compete in an EU single market of 450 million consumers.

## Why Malta cares more than most

With a domestic market smaller than the city of Bologna, Malta is especially vulnerable to “dominance by deal-making”. A single transaction can flip an entire sector from vibrant to monopolistic overnight. Think 2019, when two rival private-hospital operators proposed a joint venture that would have concentrated 80 % of acute beds under one roof. The concession was ultimately blocked after doctors’ unions, parish priests and pensioners’ associations petitioned the competition authority in a rare show of national consensus.

“That case became a civics lesson,” recalls Dr. Suzanne Mifsud, former chair of the Malta Competition and Consumer Affairs Authority (MCCAA). “People realised competition law isn’t abstract Brussels jargon; it decides whether your village will still have two pharmacies or just one.”

## The legal toolkit – and its Maltese quirks

Malta’s merger-control regime, transposed from EU Directive 2004/104, kicks in when combined Maltese turnover exceeds €2.3 million and each of at least two undertakings tops €1 million locally. That sounds technical, but the thresholds are deliberately low so that the island captures deals that fly under the EU radar.

Yet the law also contains a “public interest” clause allowing the minister to green-light a concentration that safeguards jobs, cultural heritage or environmental standards. It has been invoked only twice: once to save the historic Gozo shipyard from liquidation, and once to allow a cooperative of Gozitan tomato farmers to merge with a larger cannery, preserving the iconic *kunserva* supply chain. Both decisions sparked controversy, illustrating the tension between pure competition doctrine and Maltese socio-cultural priorities.

## Community voices: “We want growth, but not at any price”

Walk into the covered market of Birgu on a Saturday and you will hear the debate in real time.

“My son works for one of the iGaming companies everyone says will be taken over,” says fishmonger Doris Caruana. “If the buyer closes the Maltese office, he’ll emigrate to Dublin like his cousin. We need the jobs, but we also need rent we can afford.”

Her neighbour, 72-year-old baker Ċensu Galea, nods. “When the big supermarkets merge, they demand longer opening hours. Soon the feast-day procession walks past shuttered shops because family owners can’t compete. Is that progress?”

## The pandemic wake-up call

COVID-19 accelerated consolidation as cash-strapped SMEs sought lifelines. The MCCAA received 42 merger notifications in 2021, double the annual average. Most involved tourism-related services—coach operators, language schools, boutique hotels—raising fears that post-pandemic Malta could wake up with a homogenised visitor landscape of global brands and dwindling family guesthouses.

To counter the trend, the authority fast-tracked a “SME merger remedy”: approving takeovers on condition that the buyer maintains local procurement ratios, preserves Maltese branding and freezes redundancies for three years. Whether these behavioural remedies survive the next downturn remains an open question.

## Looking ahead: a sovereign wealth fund for strategic stakes?

Economist Dr. Stephanie Vella argues Malta should go further and create a sovereign fund to acquire minority stakes in sensitive acquisitions, following the French and Dutch model. “We need a seat at the table when our data-centres, renewable-energy projects or cultural content platforms are eyed by multinationals,” she says. “Passive blocking is no longer enough; we must shape outcomes.”

## Conclusion: competition as a cultural choice

In Malta, merger control is ultimately about deciding what kind of economy fits on 316 square kilometres. Do we want a replica of every global chain, or do we carve out space for the corner kiosk that still sells *pastizzi* for 40c and sponsors the village festa fireworks?

Robust competition enforcement, transparent public-interest clauses and active community engagement are the three legs of the stool. If any one weakens, the risk is an island that grows in GDP but shrinks in soul. The next time you bite into that warm ftira, remember: its flavour may have been decided not just by the baker, but by a regulator in Castille who chose to protect competition—and, with it, the taste of Malta itself.