# C_2015376EN.01000701.xml

| 13.11.2015 | EN | Official Journal of the European Union | C 376/7 |
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13.11.2015

EN

Official Journal of the European Union

C 376/7

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Summary of Commission Decision

of 5 May 2015

declaring a concentration compatible with the internal market and the functioning of the EEA Agreement

(Case M.7292 — DEMB/Mondelēz/Charger OpCo)

(notified under document C(2015) 3000)

(only the English version is authentic)

(2015/C 376/06)

On 5 May 2015 the Commission adopted a Decision in a merger case under Council Regulation (EC) no 139/2004 on the control of concentrations between undertakings
   (1), and in particular article 8(2) of that Regulation. A non-confidential version of the full decision can be found in the authentic language of the case on the website of the Directorate-General for Competition, at the following address: http://ec.europa.eu/comm/competition/index_en.html

On 5 May 2015 the Commission adopted a Decision in a merger case under Council Regulation (EC) no 139/2004 on the control of concentrations between undertakings

1

and in particular article 8(2) of that Regulation. A non-confidential version of the full decision can be found in the authentic language of the case on the website of the Directorate-General for Competition, at the following address: http://ec.europa.eu/comm/competition/index_en.html

I.   THE PARTIES

THE PARTIES

| (1) | D.E. Master Blenders 1753 (‘DEMB’) is an international coffee and tea company. DEMB is indirectly owned by Acorn Holdings BV (‘Acorn’), which in turn is majority owned by JAB Holding Company sàrl. |
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(1)

D.E. Master Blenders 1753 (‘DEMB’) is an international coffee and tea company. DEMB is indirectly owned by Acorn Holdings BV (‘Acorn’), which in turn is majority owned by JAB Holding Company sàrl.

| (2) | Mondelēz International Inc. (‘Mondelēz’) was created from a spin-off of Kraft Foods Group in October 2012. It is a global snack company with a product offering including biscuits, chocolate, candy, cheese, powdered beverages, chewing gum and coffee. |
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(2)

Mondelēz International Inc. (‘Mondelēz’) was created from a spin-off of Kraft Foods Group in October 2012. It is a global snack company with a product offering including biscuits, chocolate, candy, cheese, powdered beverages, chewing gum and coffee.

II.   THE OPERATION

THE OPERATION

| (3) | On 27 October 2014 the Commission received a formal notification pursuant to Article 4 of the Merger Regulation by which Acorn and Mondelēz acquire joint control of Charger OpCo B.V. (‘Charger’ or ‘JV’), a newly created company constituting a joint venture. |
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(3)

On 27 October 2014 the Commission received a formal notification pursuant to Article 4 of the Merger Regulation by which Acorn and Mondelēz acquire joint control of Charger OpCo B.V. (‘Charger’ or ‘JV’), a newly created company constituting a joint venture.

III.   THE PROCEDURE

THE PROCEDURE

| (4) | The transaction was notified to the Commission on 27 October 2014. |
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(4)

The transaction was notified to the Commission on 27 October 2014.

| (5) | In the course of first phase proceedings, the Parties submitted commitments to the Commission on 26 November 2014. Based on a market investigation, including a market test of the proposed commitments, the Commission preliminarily considered that the transaction raised serious doubts as to its compatibility with the internal market and adopted a decision to initiate proceedings pursuant to Article 6(1)(c) of the Merger Regulation on 15 December 2014. |
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(5)

In the course of first phase proceedings, the Parties submitted commitments to the Commission on 26 November 2014. Based on a market investigation, including a market test of the proposed commitments, the Commission preliminarily considered that the transaction raised serious doubts as to its compatibility with the internal market and adopted a decision to initiate proceedings pursuant to Article 6(1)(c) of the Merger Regulation on 15 December 2014.

| (6) | On 23 February 2015, the Parties submitted a second set of commitments to the Commission (‘Phase II commitments’). On 25 February 2015 the Commission launched a market test to assess whether the Phase II commitments would be suitable to address the competition concerns identified by the Commission. |
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(6)

On 23 February 2015, the Parties submitted a second set of commitments to the Commission (‘Phase II commitments’). On 25 February 2015 the Commission launched a market test to assess whether the Phase II commitments would be suitable to address the competition concerns identified by the Commission.

| (7) | On 20 March 2015, the Parties submitted final commitments (‘Final Commitments’) that render the Transaction compatible with the internal market. |
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(7)

On 20 March 2015, the Parties submitted final commitments (‘Final Commitments’) that render the Transaction compatible with the internal market.

IV.   EXPLANATORY MEMORANDUM

EXPLANATORY MEMORANDUM

| (8) | DEMB and Mondelēz are active in the manufacture and sale of coffee products both for the multi-serve (that is machines producing multiple portions of coffee at a time) and single-serve (that is machines producing one portion of coffee at a time) segments. Their activities overlap in relation to:






  a) | Out-of-home (OOH) sale of coffee products and services; |
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(8)

DEMB and Mondelēz are active in the manufacture and sale of coffee products both for the multi-serve (that is machines producing multiple portions of coffee at a time) and single-serve (that is machines producing one portion of coffee at a time) segments. Their activities overlap in relation to:

a)

Out-of-home (OOH) sale of coffee products and services;

| b) | In-home coffee, within which the Parties' activities overlap in:






  1. | Roast and Ground coffee (R&G) and whole beans; |
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b)

In-home coffee, within which the Parties' activities overlap in:

1.

Roast and Ground coffee (R&G) and whole beans;

| 2. | instant coffee; |
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2.

instant coffee;

| 3. | Consumables for single-serve coffee machines: (i) filter pads (consumables for Senseo machine) and (ii) capsules compatible with the Nespresso machines (N-capsules). |
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3.

Consumables for single-serve coffee machines: (i) filter pads (consumables for Senseo machine) and (ii) capsules compatible with the Nespresso machines (N-capsules).

| (9) | DEMB and Mondelēz do not directly sell single-serve machines (such as Tassimo or Senseo) and instead this is done by the machine manufacturers, such as Bosch for Tassimo and Philips for Senseo. Nevertheless, the Parties influence the prices of single-serve machines by offering cash-backs and coupons and are also heavily involved in the marketing and promotion of these machines. Therefore, the Commission analysed the effects of the Transaction on the markets for single-serve coffee machines as well as single-serve consumables. Given the close interaction between these two markets, the Commission also analysed the effects of the transaction on a wider single-serve systems level (which encompasses the markets for machines and consumables). |
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(9)

DEMB and Mondelēz do not directly sell single-serve machines (such as Tassimo or Senseo) and instead this is done by the machine manufacturers, such as Bosch for Tassimo and Philips for Senseo. Nevertheless, the Parties influence the prices of single-serve machines by offering cash-backs and coupons and are also heavily involved in the marketing and promotion of these machines. Therefore, the Commission analysed the effects of the Transaction on the markets for single-serve coffee machines as well as single-serve consumables. Given the close interaction between these two markets, the Commission also analysed the effects of the transaction on a wider single-serve systems level (which encompasses the markets for machines and consumables).

A.   
  Product market definitions

Product market definitions

OOH vs. In-home

OOH vs. In-home

| (10) | Sales of coffee products and services via the OOH channel target a variety of customers, such as offices, hospitals, restaurants and bars. For these customers coffee manufacturers offer a tailor-made selection of their various coffee products and services (i.e. types of beverages, crockery and maintenance of machines) based on the individual customers' needs. |
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(10)

Sales of coffee products and services via the OOH channel target a variety of customers, such as offices, hospitals, restaurants and bars. For these customers coffee manufacturers offer a tailor-made selection of their various coffee products and services (i.e. types of beverages, crockery and maintenance of machines) based on the individual customers' needs.

| (11) | Although the available coffee formats tend to be broadly the same in both the OOH and the in-home channel, the Commission's investigations highlighted that OOH is a separate market from the in-home market given the presence of different customer groups, different products/services offered, partly different competitors, and different competitive dynamics (that is yearly negotiations with retailers for in-home as opposed to customised offers tailored to specific customer needs for OOH). |
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(11)

Although the available coffee formats tend to be broadly the same in both the OOH and the in-home channel, the Commission's investigations highlighted that OOH is a separate market from the in-home market given the presence of different customer groups, different products/services offered, partly different competitors, and different competitive dynamics (that is yearly negotiations with retailers for in-home as opposed to customised offers tailored to specific customer needs for OOH).

| (12) | Within the in-home channel the Commission essentially concluded that different coffee formats belong to separate product markets (that is to say roast and ground, instant, filter pads and N-capsules). It also investigated two possible further segmentations which would affect all the coffee formats: (i) private labels vs. branded goods and (ii) conventional vs. non-conventional coffee. |
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(12)

Within the in-home channel the Commission essentially concluded that different coffee formats belong to separate product markets (that is to say roast and ground, instant, filter pads and N-capsules). It also investigated two possible further segmentations which would affect all the coffee formats: (i) private labels vs. branded goods and (ii) conventional vs. non-conventional coffee.

Private Label vs. branded coffee products

Private Label vs. branded coffee products

| (13) | Private Labels (‘PL’) are goods sold under retailer brands and are normally directly supplied by the retailers. The Commission's investigation pointed at the presence of a certain degree of competitive constraint between branded coffee and PL but also at some differences between the two. While the Commission considers that PL and branded coffee products, irrespective of the coffee format, belong to the same product market, it also concluded that the competitive pressure exercised by PL brands on the DEMB and Mondelēz brands varies from country to country and format to format. |
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(13)

Private Labels (‘PL’) are goods sold under retailer brands and are normally directly supplied by the retailers. The Commission's investigation pointed at the presence of a certain degree of competitive constraint between branded coffee and PL but also at some differences between the two. While the Commission considers that PL and branded coffee products, irrespective of the coffee format, belong to the same product market, it also concluded that the competitive pressure exercised by PL brands on the DEMB and Mondelēz brands varies from country to country and format to format.

Conventional vs. Non-conventional coffee

Conventional vs. Non-conventional coffee

| (14) | Non-conventional coffee (such as organic, fair trade coffee), is perceived as an alternative to conventional coffee by some of the consumers. Taking these consumer preferences into account and given some degree of supply-side substitutability, the Commission considers that it is not necessary to differentiate between conventional and non-conventional coffee. |
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(14)

Non-conventional coffee (such as organic, fair trade coffee), is perceived as an alternative to conventional coffee by some of the consumers. Taking these consumer preferences into account and given some degree of supply-side substitutability, the Commission considers that it is not necessary to differentiate between conventional and non-conventional coffee.

Single-serve systems

Single-serve systems

| (15) | DEMB owns the Senseo trademark and, together with Philips develops and markets the Senseo system. The consumables for Senseo machine are filter pads. Mondelēz owns the Tassimo trademark and, together with Bosch, develops and markets the Tassimo system. The consumables for Tassimo machine are T-discs. Therefore the term ‘single-serve system’ means a specific type of single-serve machine and the consumables compatible with this machine. |
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(15)

DEMB owns the Senseo trademark and, together with Philips develops and markets the Senseo system. The consumables for Senseo machine are filter pads. Mondelēz owns the Tassimo trademark and, together with Bosch, develops and markets the Tassimo system. The consumables for Tassimo machine are T-discs. Therefore the term ‘single-serve system’ means a specific type of single-serve machine and the consumables compatible with this machine.

| (16) | Each single-serve machine is based on a specific technology and it requires coffee consumables in a specific format. The actual coffee machine is manufactured by one or more electrical appliance manufacturers and the compatible consumables may also be manufactured by one or more coffee manufacturers depending on whether the system technology is open or closed (in other words, whether the relevant technology is still protected by intellectual property (IP) rights). Certain systems (such as Senseo and Nestlé's Nespresso) are ‘open’ or ‘semi-open’ systems, meaning that any competitor can start manufacturing compatible consumables for these systems. Other systems, like Tassimo and Nestlé's Dolce Gusto, are ‘closed’ systems, meaning that only the coffee manufacturer owning specific IP rights can manufacture the consumables for the closed system. |
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(16)

Each single-serve machine is based on a specific technology and it requires coffee consumables in a specific format. The actual coffee machine is manufactured by one or more electrical appliance manufacturers and the compatible consumables may also be manufactured by one or more coffee manufacturers depending on whether the system technology is open or closed (in other words, whether the relevant technology is still protected by intellectual property (IP) rights). Certain systems (such as Senseo and Nestlé's Nespresso) are ‘open’ or ‘semi-open’ systems, meaning that any competitor can start manufacturing compatible consumables for these systems. Other systems, like Tassimo and Nestlé's Dolce Gusto, are ‘closed’ systems, meaning that only the coffee manufacturer owning specific IP rights can manufacture the consumables for the closed system.

| (17) | The Commission observes that the price and the choice of available consumables is one of the factors final consumers take into account when deciding which single-serve machine to purchase. Given the strong dependence of coffee companies on machine penetration and their consequent strong involvement in the marketing of the machines, the relevant markets for single-serve machines and consumables are inter-related. |
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(17)

The Commission observes that the price and the choice of available consumables is one of the factors final consumers take into account when deciding which single-serve machine to purchase. Given the strong dependence of coffee companies on machine penetration and their consequent strong involvement in the marketing of the machines, the relevant markets for single-serve machines and consumables are inter-related.

| (18) | In this light, the Commission considers the interplay between the relevant markets for single-serve machines and the markets for single-serve consumables in its competitive assessment. In particular and where appropriate, the Commission takes into account the transaction's effects on a wider segment for single-serve systems comprising both machines and consumables. At the same time, it does not appear necessary to define a distinct relevant market for single-serve systems, as the transaction's effects on competition between systems have been addressed in the assessment of the narrower markets for single-serve machines and consumables. |
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(18)

In this light, the Commission considers the interplay between the relevant markets for single-serve machines and the markets for single-serve consumables in its competitive assessment. In particular and where appropriate, the Commission takes into account the transaction's effects on a wider segment for single-serve systems comprising both machines and consumables. At the same time, it does not appear necessary to define a distinct relevant market for single-serve systems, as the transaction's effects on competition between systems have been addressed in the assessment of the narrower markets for single-serve machines and consumables.

Single-serve machines

Single-serve machines

| (19) | In the coffee machine sector the Commission concludes that multi-serve machines (i.e. drip filter coffee machines) are in a separate market from single-serve machines. |
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(19)

In the coffee machine sector the Commission concludes that multi-serve machines (i.e. drip filter coffee machines) are in a separate market from single-serve machines.

| (20) | As to single-serve machines the Commission concludes that they all belong to one differentiated product market because they all share similar characteristics, important for the final consumers. They all produce a cup of hot beverage at one click, with consistent quality, in a fast, clean and convenient way. |
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(20)

As to single-serve machines the Commission concludes that they all belong to one differentiated product market because they all share similar characteristics, important for the final consumers. They all produce a cup of hot beverage at one click, with consistent quality, in a fast, clean and convenient way.

| (21) | While the Parties do not directly sell single-serve machines, they do influence their prices (by offering cash-backs, coupons etc.) and are involved in their marketing and promotion. Therefore the Commission assessed effects of the Transaction also on the market for single-serve machines. |
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(21)

While the Parties do not directly sell single-serve machines, they do influence their prices (by offering cash-backs, coupons etc.) and are involved in their marketing and promotion. Therefore the Commission assessed effects of the Transaction also on the market for single-serve machines.

Consumables for single-serve machines

Consumables for single-serve machines

| (22) | DEMB and Mondelēz' activities overlap with respect to consumables for open or semi-open single-serve systems, that is Senseo (filter pads) and Nespresso (N-capsules). |
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(22)

DEMB and Mondelēz' activities overlap with respect to consumables for open or semi-open single-serve systems, that is Senseo (filter pads) and Nespresso (N-capsules).

| (23) | Filter pads which are circular, flat, naturally permeable (like a traditional tea bag) and pre-packaged individual portions of R&G coffee for use in compatible machines to produce a single serving of coffee. |
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(23)

Filter pads which are circular, flat, naturally permeable (like a traditional tea bag) and pre-packaged individual portions of R&G coffee for use in compatible machines to produce a single serving of coffee.

| (24) | N-capsules are coffee capsules with a solid shell (in contrast with the soft permeable packaging of a filter pad). N-capsules produced and marketed by other coffee companies than Nestlé are referred to as compatible N-capsules. Nestlé sells its N-capsules in specialised boutiques or online, while compatible N-capsules are available on retailers' shelves. |
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(24)

N-capsules are coffee capsules with a solid shell (in contrast with the soft permeable packaging of a filter pad). N-capsules produced and marketed by other coffee companies than Nestlé are referred to as compatible N-capsules. Nestlé sells its N-capsules in specialised boutiques or online, while compatible N-capsules are available on retailers' shelves.

R&G coffee

R&G coffee

| (25) | R&G consists of coffee beans that have been roasted, ground and are mostly used in multi-serve machines (for instance drip filter machines). R&G coffee comprises a wide variety of flavours, aromas and intensities, depending on the specific blend of coffee varieties and origins of the beans, and how long they are roasted. Within the R&G market, the Commission leaves open:






  — | whether whole beans are part of the same market as R&G; |
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(25)

R&G consists of coffee beans that have been roasted, ground and are mostly used in multi-serve machines (for instance drip filter machines). R&G coffee comprises a wide variety of flavours, aromas and intensities, depending on the specific blend of coffee varieties and origins of the beans, and how long they are roasted. Within the R&G market, the Commission leaves open:

—

whether whole beans are part of the same market as R&G;

| — | whether Greek coffee is part of the same market as R&G; |
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—

whether Greek coffee is part of the same market as R&G;

| (26) | The Commission also considers that given the wide range of blends between Arabica and Robusta commercially available, and the limited role that the composition of the blend plays in consumers' choices, it is not necessary to distinguish between Arabica and Robusta. |
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(26)

The Commission also considers that given the wide range of blends between Arabica and Robusta commercially available, and the limited role that the composition of the blend plays in consumers' choices, it is not necessary to distinguish between Arabica and Robusta.

Instant coffee

Instant coffee

| (27) | Instant coffee (also called coffee powder or soluble coffee) is prepared by freeze-drying or spray-drying brewed coffee. Consumers can then re-hydrate the coffee by mixing it with hot water. |
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(27)

Instant coffee (also called coffee powder or soluble coffee) is prepared by freeze-drying or spray-drying brewed coffee. Consumers can then re-hydrate the coffee by mixing it with hot water.

B.   
  Geographic market definitions

Geographic market definitions

| (28) | In line with the Parties' submission, the results of the market investigation and previous cases, the Commission considers the geographic scope for each of the relevant product markets identified above to be national. |
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(28)

In line with the Parties' submission, the results of the market investigation and previous cases, the Commission considers the geographic scope for each of the relevant product markets identified above to be national.

C.   
  Competitive assessment

Competitive assessment

| (29) | The Commission has reached the conclusion that the Transaction would lead to a significant impediment of effective competition in:






  — | the R&G markets in France, Denmark and Latvia and |
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(29)

The Commission has reached the conclusion that the Transaction would lead to a significant impediment of effective competition in:

—

the R&G markets in France, Denmark and Latvia and

| — | the filter pad markets in Austria and France. |
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—

the filter pad markets in Austria and France.

| (30) | Moreover, the Commission has reached the conclusion that the Transaction would not significantly impede effective competition in the internal market in: (i) the single-serve machines market in the countries where both Tassimo and Senseo are present (that is Austria, Denmark, France, Germany, the Netherlands, Spain and the UK), (ii) R&G markets in the Czech Republic, Greece, Poland, Bulgaria, Hungary, the Netherlands and Spain, (iii) instant coffee markets in the Czech Republic, Denmark, Estonia, Greece, Hungary, Latvia, Lithuania, the Netherlands, Poland, Slovakia, Spain or the United Kingdom, (iv) filter pad markets in Germany and the Netherlands and (v) OOH markets in Denmark, Germany, Sweden and the UK. |
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(30)

Moreover, the Commission has reached the conclusion that the Transaction would not significantly impede effective competition in the internal market in: (i) the single-serve machines market in the countries where both Tassimo and Senseo are present (that is Austria, Denmark, France, Germany, the Netherlands, Spain and the UK), (ii) R&G markets in the Czech Republic, Greece, Poland, Bulgaria, Hungary, the Netherlands and Spain, (iii) instant coffee markets in the Czech Republic, Denmark, Estonia, Greece, Hungary, Latvia, Lithuania, the Netherlands, Poland, Slovakia, Spain or the United Kingdom, (iv) filter pad markets in Germany and the Netherlands and (v) OOH markets in Denmark, Germany, Sweden and the UK.

| (31) | For R&G in France the Transaction would merge the first and second largest market players. In 2014, the combined market share would have amounted to [50-60] %. The second market participant after the JV would be private label products with an aggregate market share of [20-30] % and the third market player would have only [0-5] % market share. The Parties are close competitors in French R&G and present across the whole spectrum of products and price points. Therefore, post-Transaction, the merged entity would be in a position to raise prices above competitive levels. |
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(31)

For R&G in France the Transaction would merge the first and second largest market players. In 2014, the combined market share would have amounted to [50-60] %. The second market participant after the JV would be private label products with an aggregate market share of [20-30] % and the third market player would have only [0-5] % market share. The Parties are close competitors in French R&G and present across the whole spectrum of products and price points. Therefore, post-Transaction, the merged entity would be in a position to raise prices above competitive levels.

| (32) | Similar arguments (high combined market share, insufficient constraint from other players, closeness of competition between the Parties' brands) apply for the assessment of the Transaction for R&G in Denmark and for R&G in Latvia. In both cases, post-Transaction, the merged entity would hold significant market power and be able to raise prices above competitive levels. |
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(32)

Similar arguments (high combined market share, insufficient constraint from other players, closeness of competition between the Parties' brands) apply for the assessment of the Transaction for R&G in Denmark and for R&G in Latvia. In both cases, post-Transaction, the merged entity would hold significant market power and be able to raise prices above competitive levels.

| (33) | In filter pads in France, the Parties are close competitors and are also the two main market participants with a combined market share of [60-70] %, followed by PL with an aggregate market share of [20-30] % and the third market participant having only a [0-5] % market share. Therefore, post-Transaction, the merged entity would be in a position to raise prices above competitive levels. |
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(33)

In filter pads in France, the Parties are close competitors and are also the two main market participants with a combined market share of [60-70] %, followed by PL with an aggregate market share of [20-30] % and the third market participant having only a [0-5] % market share. Therefore, post-Transaction, the merged entity would be in a position to raise prices above competitive levels.

| (34) | Also in the market for filter pads in Austria the Parties are close competitors and have a very high combined market share of [70-80] %. The second player would be PL with an aggregate market share of [10-20] % and the third player would have only [0-5] % of the market. Therefore, post-Transaction, the merged entity would be in a position to raise prices above competitive levels. |
| --- | --- |

(34)

Also in the market for filter pads in Austria the Parties are close competitors and have a very high combined market share of [70-80] %. The second player would be PL with an aggregate market share of [10-20] % and the third player would have only [0-5] % of the market. Therefore, post-Transaction, the merged entity would be in a position to raise prices above competitive levels.

| (35) | For all the other markets analysed, the Commission concluded that the Transaction does not lead to a significant impediment to effective competition. |
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(35)

For all the other markets analysed, the Commission concluded that the Transaction does not lead to a significant impediment to effective competition.

| (36) | The Commission further assessed whether there might be competition concerns in relation to single-serve systems in the countries where both DEMB's Senseo and Mondelēz's Tassimo are currently sold (which are Austria, Denmark, France, Germany, the Netherlands, Spain and the UK). The Commission concluded that in all these countries the Transaction does not raise any competition concerns due to (i) the fact that Tassimo and Senseo are not each other's closest competitors, but rather, Tassimo competes most fiercely with Nestlé's Dolce Gusto, (ii) the importance of machine penetration, which implies that coffee companies will continue to promote aggressively single-serve machines and (iii) the fact that the overall single-serve segment is growing and dynamic with competitors vying for an opportunity to break the stronghold of the four key systems. |
| --- | --- |

(36)

The Commission further assessed whether there might be competition concerns in relation to single-serve systems in the countries where both DEMB's Senseo and Mondelēz's Tassimo are currently sold (which are Austria, Denmark, France, Germany, the Netherlands, Spain and the UK). The Commission concluded that in all these countries the Transaction does not raise any competition concerns due to (i) the fact that Tassimo and Senseo are not each other's closest competitors, but rather, Tassimo competes most fiercely with Nestlé's Dolce Gusto, (ii) the importance of machine penetration, which implies that coffee companies will continue to promote aggressively single-serve machines and (iii) the fact that the overall single-serve segment is growing and dynamic with competitors vying for an opportunity to break the stronghold of the four key systems.

D.   
  Remedies

Remedies

| (37) | The Final Commitments, which included modifications to take account of the results of the market test, include three main measures, each complemented by a number of transitional arrangements:






  — | the divestment of the brand Merrild in the EEA (‘the Merrild Divestment Business’); |
| --- | --- | --- |

(37)

The Final Commitments, which included modifications to take account of the results of the market test, include three main measures, each complemented by a number of transitional arrangements:

—

the divestment of the brand Merrild in the EEA (‘the Merrild Divestment Business’);

| — | the divestment of the brand Carte Noire in the EEA, including a production facility reconfigured to produce all the divested Carte Noire coffee products (‘the Carte Noire Divestment Business’); and |
| --- | --- |

—

the divestment of the brand Carte Noire in the EEA, including a production facility reconfigured to produce all the divested Carte Noire coffee products (‘the Carte Noire Divestment Business’); and

| — | a licence of the Senseo brand in Austria for 5 years followed by a 5 year black-out period (‘the Austrian Licence’). |
| --- | --- |

—

a licence of the Senseo brand in Austria for 5 years followed by a 5 year black-out period (‘the Austrian Licence’).

| (38) | The Merrild and Carte Noire divestments include the obligation for the purchaser to grant to the Parties a transitional licence in view of rebranding for specific products on which no competitive concerns were raised. |
| --- | --- |

(38)

The Merrild and Carte Noire divestments include the obligation for the purchaser to grant to the Parties a transitional licence in view of rebranding for specific products on which no competitive concerns were raised.

| (39) | The Commission finds that the Merrild Divestment Business would remove more than the overlap in R&G coffee in Denmark and Latvia as Merrild’s 2014 market share (Denmark: [20-30] %, Latvia: [20-30] %) was higher than the market share increment brought about by the Transaction (Denmark: [10-20] %, Latvia [10-20] %). It would therefore eliminate the competition concerns in Denmark and Latvia. |
| --- | --- |

(39)

The Commission finds that the Merrild Divestment Business would remove more than the overlap in R&G coffee in Denmark and Latvia as Merrild’s 2014 market share (Denmark: [20-30] %, Latvia: [20-30] %) was higher than the market share increment brought about by the Transaction (Denmark: [10-20] %, Latvia [10-20] %). It would therefore eliminate the competition concerns in Denmark and Latvia.

| (40) | The Commission also concluded that the Carte Noire Divestment Business would, in France, remove more than the overlap brought about by the Transaction in R&G and would remove almost all of the overlap in relation to filter pads. In the opinion of the Commission, the Carte Noire Divestment Business will constitute a viable and competitive business that will be able to compete effectively with the Parties in the markets for R&G coffee and filter pads in France. It would therefore eliminate the competition concerns in France. |
| --- | --- |

(40)

The Commission also concluded that the Carte Noire Divestment Business would, in France, remove more than the overlap brought about by the Transaction in R&G and would remove almost all of the overlap in relation to filter pads. In the opinion of the Commission, the Carte Noire Divestment Business will constitute a viable and competitive business that will be able to compete effectively with the Parties in the markets for R&G coffee and filter pads in France. It would therefore eliminate the competition concerns in France.

| (41) | With regards to the Austrian Licence, the Commission found that the Austrian Licence would remove all the overlap in filter pads in Austria as Senseo’s market share ([30-40] % in 2014) equals the market share increment brought about by the Transaction. A licence solution (as opposed to a divestment of a brand) is also justified by the fact that in Austria the Parties are active in filter pads with their main brands (Senseo and Jacobs), which are present also in a number of other countries and which collect the majority of their revenues from countries other than Austria. |
| --- | --- |

(41)

With regards to the Austrian Licence, the Commission found that the Austrian Licence would remove all the overlap in filter pads in Austria as Senseo’s market share ([30-40] % in 2014) equals the market share increment brought about by the Transaction. A licence solution (as opposed to a divestment of a brand) is also justified by the fact that in Austria the Parties are active in filter pads with their main brands (Senseo and Jacobs), which are present also in a number of other countries and which collect the majority of their revenues from countries other than Austria.

| (42) | Consequently, the Commission finds that following modifications by the Parties through the Final Commitments, the Transaction would not significantly impede effective competition in the internal market. |
| --- | --- |

(42)

Consequently, the Commission finds that following modifications by the Parties through the Final Commitments, the Transaction would not significantly impede effective competition in the internal market.

V.   CONCLUSION

CONCLUSION

| (43) | For the reasons mentioned above, the decision concludes that the concentration as modified by the commitments submitted on 20 March 2015 will not significantly impede effective competition in the internal market or in a significant part of it. |
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(43)

For the reasons mentioned above, the decision concludes that the concentration as modified by the commitments submitted on 20 March 2015 will not significantly impede effective competition in the internal market or in a significant part of it.

| (44) | Consequently, the concentration should be declared compatible with the internal market and the EEA Agreement, in accordance with Articles 2(2) and 8(2) of the Merger Regulation and Article 57 of the EEA Agreement. |
| --- | --- |

(44)

Consequently, the concentration should be declared compatible with the internal market and the EEA Agreement, in accordance with Articles 2(2) and 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.

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(1)  OJ L 24, 29.1.2004, p. 1.

1

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