Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie , DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu . 
 EUROPEAN COMMISSION  
 
 
 
 
 
Brussels, 05.09.2018  
C(2018 ) 5908 final  
 
 
To the notifying party : 
Subject : Case M.9010 - JAB / PRET A MANGER  
Commission decision pursuant to Article 6(1)(b) of Council 
Regulation No  139/20041 and Article 57 of the Agreement on the 
European Economic Area2 
Dear Sir or Madam,  
(1) On 31 July 2018 , the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which JAB 
Holdings B.V., an indirect wholly owned subsidiary of JAB Holding Company 
S.à r.l. ("JAB" , Luxembourg ), or its desig nated affiliate , acquires within the 
meaning of Article 3(1)(b ) of the Merger Regulation  sole control over PAM 
Group Limited ("Pret" , UK ) by way of purchase of shares .3 JAB and Pret are 
designated hereinafter as the 'Parties '. 
1. THE PARTIES  
(2) Within the EU, JAB owns portfolio companies that are active in the retail food 
and drink sector (including Krispy Kreme in the UK, Espresso House in the 
Nordics, the Coffee Company in the Netherlands and 12oz Coffee Joint in Italy 
(part of Jacobs Douwe Egberts)), as well  as in wholesale coffee and other hot 
drinks (Jacobs Douwe Egberts and Johan & Nyström).  JAB is ultimately 
controlled by Agnaten SE, an asset management firm . 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation '). With effect from 1 December 2009,  the Treaty on 
the Functioning of the European Union ( 'TFEU ') has introduced certain changes, such as the 
replacement of  'Community ' by 'Union ' and 'common market ' by 'internal market '. The terminology of 
the TFEU will be used t hroughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').  
3  Publication in the Official Journal of the European Union No C 277, 07.08 .2018 , p. 21. In the published version of this decision, some 
information has been omitted pursuant to Article 
17(2) of Council Regulation (EC) No 139/2004  
concerning non -disclosure of business secrets and 
other confidential information. The omissions are 
shown thus […]. Where possible the information 
omitted has been replaced by ranges of figures or a 
general description.  PUBLIC VERSION  
2 (3) Pret, operating under the brand Pret A Manger, is a food and drink retailer which 
has over 500 st ores worldwide, including, within the EU, in the UK, France, 
Denmark and the Netherlands. Pret offers  a wide selection of food and drinks 
including sandwiches, hot food, salads, soups, baked goods, fresh fruit, snacks, 
juices and organic coffee.  
2. THE OPERAT ION 
(4) Pursuant to a share purchase agreement entered into on 28 May 2018 , JAB will 
acquire 97.8%  of the shares in Pret (the "Transaction").      
(5) As a result of the Transaction, JAB will acquire sole control over Pret. The 
Transaction constitutes a concentrati on within the meaning of Article 3(1)(b) of 
the Merger Regulation.  
3. EU DIMENSION  
(6) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 m illion4 (JAB: EUR 15 055 million; Pret: EUR 1 003 
million; combined: EUR 16 058  million) . Each of them ha s an EU-wide turnover 
in excess of EUR 250 million  (JAB: EUR […]; Pret: EUR […]), but they do not 
achieve more than two -thirds of their aggregate EU-wide turnover within one and 
the same Member State. The notified operation therefore has a n EU dimension  
within the meaning of  Article 1(2) of the Merger Regulation . 
4. COMPETITIVE ASSESSMEN T 
(7) The Transaction gives rise to horizontal overlaps , as the Parties are both active in 
the retail of casual food and drinks. Moreover, the Trans action gives rise to 
vertical relationships between JAB's activities in the wholesale supply of coffee 
(and other hot drinks ) and Pret's activities as a retailer of coffee and other hot 
drinks.  
4.1. Market Definition  
4.1.1.  Retail supply of casual food and drinks  
(8) The Commission has previously left open the precise product market definition 
for informal restaurants . It has considered various segmentations, such as a 
distinction between quick -service and other informal , casual  restaurants, a 
distinction between chains an d non -chain restaurants, and a distinction between 
eat-in and take -out/delivery.5 
(9) Both P arties offer baked goods. In a decision on cake products, the Commission 
has left the market definition open but considered a segmentation between (i) 
cakes, mini ca kes and other pastries produced; and (ii) morning goods which 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission  
Consolidated Jurisdictional Notice (OJ C  95, 16.4.2008 , p. 1).  
5  Cases COMP/M.2940 – TPG Advisors III/Goldman Sachs/Bain Capital Investors/Burger King, 
COMP/M.4220 – Food Service Project/Tele Pizza, and COMP/M.6895 – 3G Special Situations Fund  
III/ Berkshire Hathaway/ H J Heinz Company.  
3 include bagels, croissants, scones and similar products n ormally eaten for 
breakfast.6  
(10) The Commission has not previously considered the markets for out -of-home 
coffee or hot drinks at the retail  level.  
(11) In the previous decisions  referred to above , the Commission has also left the 
geographic market definitions in relation to the retail supply of casual food and 
drinks  open but has suggested that the markets may be national or wider in scope 
due to supply -side substitutability, whilst in some instances acknowledging the 
local dimension of demand.  
4.1.2.  Wholesale supply of hot drinks  
(12) In a previous decision, the Commission cons idered that all hot drinks (including 
not just coffee but also tea and hot chocolate) for out -of-home consumption form 
part of the same product market at the wholesale  level, that wholesale sales of hot 
drinks for out -of-home consumption form a separate ma rket from those for in -
home consumption (e.g., sold through supermarkets), and that the geographic 
market is national in scope.7  
4.1.3.  Conclusion  
(13) In the present case, the precise  product and geographic market definition s may be 
left open as the Transaction does  not raise competition concerns under any 
plausible market definition.  
4.2. Competitive A ssessment  of Horizontal Overlaps  
4.2.1.  United Kingdom  
(14) In the UK, Pret (378 stores) competes to some extent with JAB's Krispy Kreme 
(111 stores). However, the Parties do not appear to be close competitors, as 
Krispy Kreme's core business is doughnuts (in 2017, it sold […] doughnuts 
compared to  only […] cups of coffee ), while Pret's core offering is fresh, healthier 
convenience food made from natural ingredients such as salads, sandwiches, 
soups and other hot food (in 2017, food accounted for [70-80]% of Pret's sales, of 
which only [5-10]% baked goods and [60-70]% othe r food). Pret does not sell any 
doughnuts in the UK; the baked goods it sells include cookies, croissants, 
muffins, mince pies and pretzels .  
(15) While , according to the Parties, precise market shares depend on the exact market 
definition and data is not readi ly available, the Parties estimate that they have a 
combined market share of below 20% on any of the possible market 
segmentations mentioned in Section 4.1.1  above . According to the Parties' 
estimates based on market intelligence collected by the Boston Consulting 
Group8, in the UK market for retail casual food and drink s, the merged entity 
would have a combined share of [0-5]%, within which [0-5]% for food, [0-5]% 
                                                 
6  Case COMP/M .2817 – Barilla/BPL/Kamps.  
7  Case COMP/M.7292 – DEMB/Mondelez/Charger OPCO.  
8  The Boston Consulting Group estimated the total market size for casual retail food and drink and 
assumed a […] split between food, hot drinks and cold drinks. The Parties provided their actual sales 
data.  
4 for hot drinks and [0-5]% for cold drinks .9 On a narrower market for chained 
casual food and drink restaurants the combined market share would be [5-10]%, 
with an increment brought about by Krispy Kreme of [0-5]%.  
(16) The largest competitor of the merged enti ty for casual and casual chained 
restaurants would be McDonalds with a share of [5-10]% overall and [30-40]% 
for chained restaurants. Close competitors of the merged entity include Greggs, 
Subway and Starbucks with market shares of [between 0 -5% each ] in the overall 
market and [10-20]%, [5-10]% and [5-10]% in the chained segment. Both Parties 
and all major competitors offer both eat -in and take away.  
(17) As regards baked goods, while according to the Parties precise market shares are 
not readily available,  the Parties state that their combined market share is below 
20% under any plausible market definition. The Parties are not close competitors, 
as Pret does not offer doughnuts, which is Krispy Kreme's core business. 
Moreover, baked goods are not an importa nt part of Pret's business, accounting 
for only [5-10]% of its sales, which is instead centred around healthier, natural 
and fresh food , as explained above . Competitors in the area of baked goods 
include not just food chains like McDonalds and coffee chain s like Starbucks, 
Costa Coffee and Nero, but also supermarkets, bakeries and patisseries.  
(18) Regarding  coffee and other hot drinks, this is neither the core business of Pret nor 
of Krispy Kreme. While precise market shares are not readily available  according  
to the Parties , the Parties estimate that their combined market share in hot drinks 
by value is [0-5]%, while in terms of number of cups of coffee sold it is at most 
[0-5]%. Competitors  in this area  include on the one hand specialised coffee chains 
like S tarbucks, Costa Coffee and Nero; and on the other hand a range of chained 
and independent casual food and drink retailers who sell coffee as an ancillary 
offer.   
(19) At a local level, the Parties  overlap in 63 cities  within the UK , in the sense that 
they oper ate retail casual food and drinks stores within a 500m -radius of each 
other. While precise market share data is not available, i n each of the areas  where 
the Parties overlap , there are at least 4 other retailers of casual food and drink s 
within the same ra dius (and often several more) , pointing to a rather moderate if 
not low market share . 
4.2.2.  Denmark  
(20) In Denmark, Pret has only 2 stores, while JAB owns 63 coffee shops (30 under 
the Espresso House brand and 33 under the Baresso brand, which is owned by 
Espresso House). The Parties are not close competitors, as the JAB stores earn the 
majority of their revenues with hot drinks, while Pret's main offering is food.10  
(21) At a national level, the Parties estimate that their combined market share is well 
below [0-5]% for retail casual food and drink s and all sub -segments thereof 
                                                 
9  These market share estimates are by value. The Parties also provide an alternative market share 
estimate by number of cups of coffee, according to which they have a  combined share of at most [0-
5]%. 
10  Since the two Pret stores only opened in 2018, precise revenue information is not available  for 
Denmark, but the fact that in its main market (the UK), Pret earns more than [70-80]% of its revenue 
with food is illustrative of its business model.  
5 discussed above, including hot drinks. According to the Parties, the increment 
brought by Pret is de minimis .  
(22) At a local level, the Parties submit that both Pret stores are located land-side at 
Copenhagen airport. According to the Parties, t here are no JAB stores land -side 
but JAB expects to open a shop air -side at Copenhagen airport during the summer 
of 2018. In any event, t here are more than 20 other retailers of casual food and 
drinks at Copenhagen airport.   
4.2.3.  The Netherlands  
(23) In the Netherlands, Pret has only 1 store, while JAB owns 34 coffee shops under 
the Coffee Company brand, through Jacobs Douwe Egberts . The Parties are not 
close competitors, as the JAB stores earn the majority of their revenues with hot 
drinks, while Pret's main offering is food.11 
(24) At a national level, the Parties estimate that their combined market share is below 
[0-5]% for retail casua l food and drink s and all sub -segments thereof discussed 
above, including hot drinks. The increment brought by Pret is de minimis .  
(25) At a local level, the Pret store is located at Utrecht central station. There are two 
JAB stores in Utrecht, but neither is located in the central station or within a 
500m radius  around  that station . Moreover, t here are several other retailers of 
casual food and drink s at Utrecht central station.  
4.2.4.  Germany  
(26) In Germany, JAB owns 43 coffee shops under the Balzac brand, through Espre sso 
House. Pret does not currently have any stores in Germany but plans to open one 
in Berlin Hauptbahnhof train station in October 2018. The Parties are not close 
competitors, as the JAB stores earn the majority of their revenues with hot drinks, 
while Pr et's main offering is food.12 
(27) At a national level, the Parties estimate that their combined market share is below 
[0-5]% for retail casual food and drink s and all sub -segments thereof discussed 
above, including hot drinks. The increment appears to be de min imis and 
concerns future competition only.  
(28) At a local level, JAB does not own any stores in Berlin Hauptbahnhof station, 
where there are several other retailers of casual food and drink.  
4.2.5.  Wider than national markets   
(29) On any wider than national market, comb ining several Member States or 
encompassing the entire EEA, the Parties’ combined market shares in the retail 
supply of casual food and drinks and in any sub -segments would be below 20%, 
as the combined market share of the Parties is below 20% in all natio nal markets 
within the EEA.  
                                                 
11  Since the Pret stores only opened in 2018, precise revenue information is not available  for the 
Netherlands, but the fact that in its main market (the UK), Pret earns more than [70-80]% of its 
revenue with food is illustrative of its business model.  
12  Since the Pret store has not yet opened, precise revenue information is not available  for Germany, but 
the fact that in its main market (the UK), Pret earns more than [70-80]%  of its reven ue with food is 
illustrative of its business model.  
6 4.2.6.  Conclusion  
(30) In conclusion, in all markets where their activities overlap in the retail casual food 
and drinks sector, the Parties have limited market shares, are constrained by 
several national chains and local retailers, and are not close competitors. The 
Transaction therefore does not raise any horizontal competition concerns on any 
geographic  market, irrespective of the precise product market definition.  
4.3. Competitive A ssessment  of Vertical Relation s 
4.3.1.  Denmark and the Netherlands  
(31) According to the information submitted by the Parties, Denmark and the 
Netherlands are the only countries where JAB's upstream market share in the 
wholesale supply of hot  drinks for out -of-home consumption  exceeds 30%. In 
Denmark, JAB has a market share of [30-40]% at the wholesale level  but Pret 
only has 2 stores, giving rise to a n individual  market share well below [0-5]% in 
the retail supply of hot drinks at national le vel (and a combined market share well 
below [0-5]%). In the Netherlands, JAB has a market share of [40-50]% at the 
wholesale level but Pret only has 1 store, giving rise to a n individual  market share 
well below [0-5]% in the retail supply of hot drinks at national level  (and a 
combined market share also well below [0-5]%).  
(32) Therefore, although the Transaction gives rise to affected markets, due to the de 
minimis  importance of Pret and JAB as customer s of wholesale out -of-home hot 
drinks, the merged entity w ill not have the ability to engage in any meaningful 
customer foreclosure in Denmark or in the Netherlands. As regards input 
foreclosure, the Transaction will have no impact on the ability of JAB to foreclose 
retail shops. The Transaction will not affect JAB's incentive  either , due to the 
minimal importance of Pret 's retail activities  in these countries . In any event, 
other significant wholesale providers of out -of-home coffee and hot drinks are 
present in these two countries  to serve competing retailers w ith this rather 
commoditised product.  
4.3.2.  UK, France, Germany and Belgium  
(33) In the UK, France, Germany and Belgium13, both JAB’s and Pret's market shares 
in the wholesale and retail supply of hot drinks for out -of-home consumption 
respectively, are significantly below 30% (and are in fact even below […]% in 
each of these countries ).  
4.3.3.  Conclusion  
(34) In light of the above, t he merged entity will not have the ability and incentive to 
engage in  customer or input foreclosure . Therefore, the  Transaction does not raise 
any vertical competition concerns  on any geographic market, irrespective of the 
precise product market definition . 
                                                 
13  Pret does not currently have any stores in Germany or Belgium, but is planning to open one in 
Germany in October 2018 […].  
7 5. CONCLUSION  
(35) For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal  market and with 
the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of 
the Merger Regulation and Article 57 of the EEA Agre ement . 
For the Commission  
(Signed ) 
Margrethe VESTAGER  
Member of the Commission