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 , 30.11.2018  
C(2018 ) 8243 final  
 
 
 
To the notifying party  
 
 
 
 
Subject : Case M. 9108  - PepsiCo /SodaStream International  
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 24.10.2018 , the European Commission received notification of a proposed 
concentration  ('the Transaction')  pursuant to Article 4 of the Merger Regulation 
by which PepsiCo  Inc. ('PepsiCo', US) acquires within the meaning of Article 
3(1)(b) of the M erger Re gulation  control of the whole of SodaStream 
International Ltd. ('SodaStream', Israel)3. PepsiCo is also referred to as 
'Notifying Party' and PespiCo and SodaStream are collectively referred to as 
'Parties' . 
1. THE PARTIES  AND THE OPERATION  
(2) PepsiCo  is a global food and beverage company . Through its operations,  as well 
as through  authorized bottlers, contract manufacturers and other third parties , it 
produces, markets, distributes and sells a wide variety of beverages, foods and 
                                                 
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  'Commu nity' by 'Union ' and 'common market ' by 'internal market '. The terminology of 
the TFEU will be used throughout 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  395, 31.10.2018 , p. 23. 
PUBLIC VERSION  In the publish ed version of this decision, som e 
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omitted has been replaced by ranges of figures or a 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.  
2 snacks  under a wide portf olio of brands (including Pepsi -Cola, 7Up, Mountain 
Dew, Doritos, Frito -Lay, Gatorade, Lays, Mirinda, Quaker and Tropicana) . 
(3) SodaStream  manufactures and commercializes home carbonation systems as well 
as concentrates, syrups and flavo urs that enable consum ers to transform tap water 
into sparkling water and carbonated soft drinks .  
(4) SodaStream is a public ly traded company, at present, not controlled by any of its 
shareholders. Pursuant to an Agreement and Plan of Merger dated 20 August 
2018, PepsiCo will indi rectly, through a wholly owned subsidiary, acquire all 
outstanding shares of SodaStream .  
(5) PepsiCo acquiring sole control over SodaStream, the proposed Transaction 
constitutes a concentration within the meaning of Article 3(1)(b) of the Merger 
Regulation.  
2. EU DIMENSION  
(6) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 m illion4 (in 2017, PepsiCo: […]; SodaStream: […]). Each 
of them ha s an EU-wide turnover in excess of EUR 250 million  (in 2017, 
PepsiCo: […] ; SodaStream: […]), 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 pursuant to Article 1(2) of the 
Merger Regulation . 
3. MARKET DEFIN ITION  
3.1. Introduction  
(7) The present case  primarily concerns Sodastream's home carbonation systems for 
home -made  sparkling water or home -made  carbonated soft drinks . The se are  
systems that are composed of a device that carbonates water by adding 
compressed CO 2 from a replaceable pressurized cylinder  to water in a carbonated 
bottle . Concentrates , syrups and flavours , which are also sold by SodaStream , can 
be added afterwards to prepare soft drinks . The CO 2-cylinders and the related 
refilling services are the highest value components of the systems.   
(8) PepsiCo is active in neighbouring markets such  as for beverages, in particular 
bottled and canned sparkling water and carbonated soft drinks  as well as 
dilutables concentrates, syrups and flavours  (but not for fina l consumers) and also 
consumer solutions consisting of bottles and p ods filled in with dilutables that 
allow to obtain flavoured water . 
                                                 
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).  
3 3.2. Product Market Definition  
3.2.1.  Home Carbonation Systems  
(9) The Commission did not assess in previous decisions home carbonation systems 
and their components.  
(10) The Notifying Party submits  that the relevant product market include s home 
carbonat ion systems as a whole, while the single components, namely CO 2-
cylinders,  carbonator bottles as well as the CO 2 refilling services should not be 
considered as separated markets  as the y only belong to  an after -market to that of 
the sale of home carbonation systems.  
(11) The Commission considers that for the purpose of the present decision the exact 
product market definition can be left open as no serious doubts arise in the 
market s for the single component of home carbonation systems (sparkling water 
makers, CO 2-cylinders , carbonator bottles as well as the CO 2 refilling services) 
which appear to be the narrowest -possible relevant market among  the alternative 
market definitions  discussed above .  
3.2.2.  Beverages , concentrates , syrups  and consumer solution for flavoured water  
(12) The N otifying party submits that the relevant product markets as regards 
beverages, concentrates, syrups and consumer solutions  for flavoured  water can 
be left open as the Transaction  does not raise serious doubts under any possible 
market definition for these products.   
(13) In previous decisions5, the Commission has identified separate product market s 
for the production and supply of carbonated and non-carbonated  soft drinks . 
Within carbonated soft drinks , the Commission has considered distinct product 
markets for cola flavo ured and non -cola flavo ured carbonated soft drinks6 and, 
within the market for non-carbonated  soft drinks, packaged water, fruit  juices, 
ready -to-drink teas and energy and sports drinks  have been considered separately .  
(14) In a previous decision7, the Commission did  consider concentrates and syrups 
sold to bottling and canning operators,  but it did never assess whether 
concentrates, syrups and flavours sold directly to final consumers constitute a 
separate market  from other soft drink s. Finally, consumer solutions for flavoured 
water were not considered in any previous Commission's decision . 
(15) During the market investigation, a majority of customers indicated that concentrates  
syrups and flavo urs for home carbonation systems compete with carbonated soft 
drinks .8 However, some customers also specify that the se product s are only part ial 
substitutes.9 During the market investigation , several customers also indicated that 
concentrates, syrups and flavours to be used in connection with home carbonation 
                                                 
5  See eg Commission decision in Case M.8244, The Coca -Cola Company/Cocacola Hbc/Neptun o 
Vendenys, paras 18 -23. 
6  See Commission decisions in Case No IV/M.794 - Coca -Cola/Amalgamated Beverages GB , Case 
M.6522, Groupe Lactalis/Skanemejerier, paras 8 -10; Case M.2504, Cadbury Schweppes/Pernod 
Ricard, paras  9-14; Case M.2276, The Coca -Cola Comp any/Nestle/JV, paras 17 -22. 
7  Commission decision in Case M.5633, PepsiCo/The Pepsi Bottling Group  
8  Replies to question 6 of Q2 to customers.  
9  Replies to question 6.1. of Q2 to customers.  
4 systems present certain specific characteristics, but the elements reviewed do not 
allow the Commission  to reach a conclusion as to whether concentrates, syrups 
and flavours t o be used in connection with home carbonation systems , or 
consumer solutions for flavoured water  form  separate markets .10 
(16) However, f or the purposes of this decision, the Commission considers that the 
exact product market definition s might ultimately be left  open as no serious 
doubts arise in the market for cola flavoured and non -cola flavoured soft drinks  
nor in a market for concentrates, syrups and flavours to be used in connection 
with home carbonation systems which appear to be the narrowest -possible 
relevant market s among the alternative market definitions discussed above . 
3.3. Geographic Market  Definition  
(17) As regards the geographic scope of the relevant markets, the Commission has in 
the past found that the relevant geographic markets for consumers'  goods, 
including  home appliances , beverages  or syrups and concentrates , are national in 
scope due to differences in consumption patterns, logistics and distribution 
networks as well as marketing  strategies.11 
(18) In its submission, the Notifying Party does  not take position on the geographic 
scope of the relevant product markets as the Transaction would not raise serious 
doubts  under any relevant geographic market  definition .  
(19) The responses to the market investigation have not provided any indication that it 
would be warranted for the Commission to depart from its previous practice for 
defining the geographic scope of the relevant product market s in the present case.  
(20) For the purposes of this decision, the Commission considers , in line with its 
practice,  that all the relevant product market s are national .  
4. COMPETITIVE ASSESSMENT  
4.1. Activities of the Parties  
(21) PepsiCo produces, markets, distributes and sells bottled or packaged (e.g., in 
cans) carbonated and non -carbonated soft drinks and water and it is a brand 
owner and licensor of various trademarks used to market and sell non -alcoholic 
beverages  (Pepsi, 7Up, Mirinda, Bubly, Mountain Dew; Kas, Schwip Schwap, 
Tropicana , Aquafina and Drinkfinity ). Through an international joint venture 
together with Unilever, PepsiCo a lso markets  ready -to-drink tea products (under 
the Lipton brand name).  
(22) In addition, PepsiCo produces soft drink concentrate s and syrup s that it supplies 
to hotels, restaurants and catering services. These concentrates and syrups are 
mixed together with water and CO 2 in specialized dispensing machines (soft drink 
dispensing machines visible in the counters of fast food restaurants).  
                                                 
10  Replies to question 5 of Q2 to customers . 
11  See eg Commission decision i n case M.8224, The Coca -Cola Company / Coca -Cola HBC / Neptuno 
Vandenys, paras 25 -27. 
5 (23) PepsiCo has also recently started to commercialize and develop consumer 
solutions for flavoured water . 
(a) In 2018, PepsiCo  launched a specific branded solution (Drinkfinity) 
comprising a special bottle and flavor pods, whereby pods can be pierced 
and their content can be compressed out and into a bottle.   
(b) According to information provided by the Notifying Party , PepsiCo is also 
in the final stages of the creation and commercialization of a new sport 
drink product platform – called “Gx”  – that consists of a special bottle, or 
“vessel” (where the water is stored), and consumable “pods” of a given 
flavour  and hydration formula.  
(24) PepsiCo has not been active in the home carbonation system market prior to the 
transaction  in the EEA . Only in the US, SodaStream and PepsiCo entered into an 
arrangement whereby PepsiCo would supply Pepsi - and Sierra Mist -branded pods 
of dilutable concentra tes and syrups for consumers’ use with home carbonation 
systems. […]. 
(25) SodaStream is specialized in home carbonation systems and manufactures 
different type of devices as well as carbonation bottles and CO 2-cylinders. […]. 
(26) SodaStream also sells concentrates , syrups and flavours for the preparation  of 
carbonated soft drinks . 
4.2. The Notifying party's view  
(27) The Notifying party submits  that the Transaction does not lead to a ny horizontal 
overlap s between the Parties in any plausible relevant market. The main products 
of the Parties, PepsiCo’s packaged carbonated soft drinks and SodaStream’s 
home carbonation systems, would not be substitutable , but rather complementary 
in the overall beverages industry.  
(28) Further , the Notifying Party claims that they do not compete in the sector of 
concentrates, syrups and flavo urs to be diluted into water. SodaStream’s offering 
in this sector consists of bottled concentrates, syrups and flavo urs that are 
intended to be mixed with water after being carbo nated with home carbonation 
system , while  PepsiCo does not produce or market any such bottled concentrates 
or syrups to the retail market or to end consumers in the EEA.   
(29) The Notifying party holds the view that the Transaction does not lead to any 
conglome rate relationship as there would be no link between sales  of home 
carbonated appliances and sales of sparkling water or soda in the EEA . In 
particular the Notifying party submits  that the Parties could not limit the ability of 
consumers to purchase any car bonated soft drink, any home carbonation system 
and any dilutable, for their own different purposes  and that there are  numerous 
competitors active in all three sectors, particularly regarding carbonated soft 
drinks and dilutable concentrates, syrups and fl avours, which are highly 
fragmented  and characterized by a large number of players.  
6 4.3. Market Structure  
4.3.1.  Home carbonation systems  
(30) Table 1 below provides estimated market shares for home carbonation systems , as 
well as for the alternative plausible market definition  distinguishing the 
components sold separately by SodaStream , in the EEA and Member States in 
which Soda Stream is active . Market shares are relative to 2017 in value terms.  
Table 1 – SodaStream's market shares for home carbonation systems (2017)  
 Home 
carbonation 
systems  CO2 cylinders 
for home 
carbonation 
systems  CO2 cylinder 
refills  Carbonation 
bottles  
EEA  [90-100]%  [90-100]%  [70-80]% [90-100]%  
Austria  [90-100]%  [90-100]%  [70-80]% [90-100]%  
Belgium  [90-100]%  [90-100]%  [80-90]% [90-100]%  
Czech 
Republic  [90-100]%  [90-100]%  [80-90]% [90-100]%  
Denmark  [80-90]% [80-90]% [50-60]% [80-90]% 
Finland  [80-90]% [80-90]% [60-70]% [80-90]% 
France  [90-100]%  [90-100]%  [80-90]% [90-100]%  
Germany  [90-100]%  [90-100]%  [70-80]% [90-100]%  
Italy [80-90]% [80-90]% [60-70]% [80-90]% 
Netherland  [90-100]%  [90-100]%  [80-90]% [90-100]%  
Norway  [70-80]% [70-80]% [30-40]% [70-80]% 
Sweden  [80-90]% [80-90]% [40-50]% [80-90]% 
UK [90-100]%  [90-100]%  [90-100]%  [90-100]%  
Source: Estimates of the Parties  
(31) SodaStream is a dominant player in all Member States where it is active , while 
few competitor s entered those national market s in the last years , namely , in 
Germany, MySodapop and Soda Trend and, in the Nordic Countries, AGA , 
MySodaPop and AArke.  At present, the market shares of the compe titors 
however are very limited.  
4.3.2.  Beverages, concentrates, syrups and consumer solution for flavoured water  
(32) PepsiCo is an important player in the beverage market . According to the estimates 
of the Parties, PepsiCo has market shares below 30% under all plaus ible market 
7 definitions, with the exception of cola flavoured  carbonated soft drinks  and ready 
to drink t ea on certain national markets .  
(33) As to cola flavoured  carbonated soft drinks , PepsiC o has market shares above 
30% in Finland ( [30-40]%), Norway ( [30-40]% ), Poland ( [30-40]% ), Romania 
([30-40]% ) and the UK ( [30-40]% ). However, i n these national markets, PepsiCo 
follows at distance CocaCola that is the clear market leader with market share s 
respectively of [50-60]% in Finland, [50-60]%  in Norway, [40-50]% in Poland, 
[50-60]%  in Romania and [60-70]% in the UK.  
(34) As to ready  to drink Tea, PepsiCo – through the brand Lipton – has market shares 
exceeding 30% in Belgium ( [60-70]%), France ( [50-60]% ), Greece ( [40-50]%), 
the Netherlands ( [40-50]%), and the UK ([70-80]%) and is the market leader in 
these national markets.  
(35) SodaStream has limited sales of dilutables and estimates its market share of 
approximately [0-5]% at EEA level while at national level its market shares 
would not exceed 5% in any national market, as they range between under [0-5]% 
(e.g., Netherlands, Denmark)  and [0-5]% (Germany).  
4.4. The Commission's a ssessment  
(36) On the basis of the product and geographic  relevant markets defined above in 
section 3, the Commission will assess whether Transaction leads to any horizontal 
overlaps or vertical relationships between the activities of the Parties.   
(37) Further, in light of the fact that the Parties  are active on closely related markets, 
the Commission will also assess  possible conglomerate  effects arising from the 
Transaction.   
No horizontally or vertically affected markets  
(38) The Commission observes that, in light of the activities of the Parties, the 
Transaction does not give rise to any horizontal overlap as the products of the 
Parties are highly differentiated .  PepsiCo sells ready to go sparkling water and 
soft drinks , while SodaStream commerciali zes devices that ultimately allow to 
fulfil the same needs, but require a higher investment at the beginning and the  
beverage produced is most ly suitable for domestic use .12 
(39) The only potential overlap arise in relation to concentrates, syrups and flavo urs 
sold to final consumer for dilution in sparkling or still water as both Parties are 
active in this sector. However, the consumer solution for flavoured water sold by 
PepsiCo under the Drinkfinity brand is a nascent system which only achieved 
very limited sa les ([…]), and is only available on -line ( […]). The product also 
appears to have a different functioning from Soda Stream's dilutables . 13 As 
regards Gx, it is not yet available in the EEA  and it is meant for the production of 
non-carbonated energy beverages . 
                                                 
12  See eg the reply of a Customer to question 6.1. of Q2 to customers.  
13  The Drinkfinity system comprises a special bottle and flavour pods, whereby  pods can be pierced and 
their content can be compressed out and into a bottle, which is different from SodaStream's syrup 
where the disposable bottles content are poured and diluted into water . 
8 (40) The Transaction does not give rise to any vertical relationships.  
Conglomerate effects  
(41) Overall , during the market investigation, customers did not express concerns 
about the impact of the transaction on any of the  relevant product  markets. 
However, comme nts of a competitor14 suggest that the merged entity could use its 
financial and portfolio strength to limit the access of competitors or impose worse 
contractual conditions on retailers.  Therefore, the Commission has carefully 
assessed possible conglomerat e effects.  
(42) During the market investigation, several market participants indicated that, 
contrary to the submission of the Parties, there could be links between home 
carbonated appliances , dilutables , bottled sparkling water and soft  drinks15 and it 
also res ults from internal documents, […].16 
(43) However, i t must be noted that in the assessment of conglomerate effects a 
distinction must be drawn between a pure portfolio effect understood as an 
incentive on customers to buy the range of products from a single shop  (one-stop-
shopping) rather than from many suppliers and a strategic use of the portfolio and 
financial leverage resulting from a strong market position from one market to 
another by means of tying or bundling or other exclusionary practices.17 Pure 
portfol io effects , although conferring a competitive advantage on suppliers , are 
not necessarily regarded as anticompetitive in merger control.18 Conglomerate 
effects  may only result in a significant impediment to competition when the new 
entity decides  to use its  market power in one market by conditioning sales in a 
way that links the products in the separate markets  in a particular and strategic 
way in order to disadvantage its competitors or potential entrants.19 
(44) Non-horizontal mergers pose no threat to effective  competition unless the merged 
entity has a sig nificant degree of market power  in at least one of the markets 
concerned.20 The effects of bundling or tying can only be expected to be 
substantial when at least one of the merging parties' products is viewed b y many 
customers as particularly important and there are few relevant alternatives for that 
product.21 
(45) As explained above  under section  4.3.1 , this condition is fulf illed at least for 
SodaStream that is the clear market leader on the home carbonat ion systems 
market, with estimated market shares above [90-100]%  at EEA level between 
[60-100]% at national level.  As concerns PepsiCo, it  has also a strong market  
position on certain national market with its brands Lipton , as indicated  above 
under paragraph (34) and several of its brands might be considered as importan t 
by retailers.   
                                                 
14  Minutes of the call with a competitor on 10 Oc tober 2018.  
15  Replies to questions 12 and 13 o f Q2 to customers.  
16  See slide 20 of Annex 5.4. a.2. to the Form CO and slide 11 of Annex 5.4.a.5 to the Form CO. .  
17  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control 
of concentrations between undertakings , JO C 265, 18 .10.2008  (non-horizontal guidelines ), para 93.  
18  See non -horizontal guidelines, para. 104. 
19  Non-horizontal guidelines , para. 95. 
20  Non-horizontal guidelines , para. 23.  
21  Non-horizontal guidelines , para.  99. 
9 (46) Moreover, from the market investigation it results, as indicated above under 
paragraph (31), that there are only a limited number o f competing products on the 
mark et for home carbonation systems . 
(47) However, i t needs further to be assessed  whether the merged entity may be able to 
use its market power to foreclose competitors in another market by conditioning 
sales in a way that links the  products in the separate markets together , by tying or 
bundling .22 In general, t he specific characteristics of the products may be relevant 
for determining whether any of these means of linking sales between separate 
markets are available to the merged entity.23  
(48) First, technical tying is possible only in certain industries  as it occurs  where a 
product can be designed in such a way that it only works with the tied product and 
not with the alternatives offered by competitors .24  
(49) The market investigation confirmed the submission of the Parties that from a 
technical point of view it does not appear possible  to tie the use of home 
carbonation systems and dilutable concentrates, syrups and flavours . Even 
assuming that Sodastream would launch in the consumer mark ets dilutables with 
the brands Pepsi, Tropicana or Lipton, from a technical point of view, consumers 
cannot be prevented from using any additive dilutable from any brand with water 
after it has been carbonated with a SodaStream's device. Vice -versa consume rs 
could not be prevented from using any PepsiCo additive dilutable also in 
connection with soda makers of other brands.25 
(50) Second, c ontractual tying or bundling usually refers to the way products are 
offered and priced by the merged entity  and is very unlik ely to be possible if 
products are not bought simultaneously or by the same customers .26 
(51) The products of the Parties, ie SodaStream's home carbonations systems and 
PepsiCo's beverages,  are not bought simultaneously  and there is a large common 
pool of customers for the individual products concerned . The Parties' customers 
are retailers and final consumers.  In relation to retailers, e ven for retailers buying 
both home carbonated appliances and sodas, purchases are managed by different 
buyers.  For final c onsumers  bottled and canned beverages are alternatives to the 
use of home carbonations systems. On the other hand , as concerns dilutables like 
concentrates, syrups and flavours to be used in connection with home carbonation 
systems , during the market inves tigation, competitors and customers indicated 
that home carbonation systems  such as those of SodaStream are used mainly for 
home -made  sparkling water and it is not expected that in the future consumers 
would use these devices predominantly for home -made  carbonated soft drinks . 
Hence, the use of home carbonat ion systems is largely independent from the use 
of dilutable concentrates, syrups and flavours .27  
                                                 
22  Non-horizontal guidelines, para. 95.  
23  Non-horizontal guidelines, para. 9 8. 
24  Non-horizontal guidelines, para. 9 7. 
25  Replies to question 22 of Q2 to customers.  
26  Non-horizontal guidelines, para. 98.  
27  Replies to question s 21 and  21.1 of Q1 to competitors; and to question s 21 and  21.1 of Q2 to 
customers.  
10 (52) In addition , the Commission observes that there is no evidence that the Parties 
would have the incentive to engage in any foreclosure strategy.  In particular , there 
is no evidence in internal strategic documents that the Parties would envisage a 
strategy of bundling and tying post-Transaction , […].  
(53) As the characteristics of the Parties’ products and use do not differ between the 
different national markets , this reasoning apply to all EEA national markets where 
the Parties are active.  
(54) For the reasons set out above, the Commission concludes that the Transaction 
does not raise serious doubts as to its compatibi lity with the internal market as 
regards any conglomerate effects of the concentration between, on the one hand, 
the manufacturing  of home carbonation systems and, on the other hand, the sales 
of sparkling water, soft  drinks or dilutables  concentrates, syr ups and flavours .  
5. CONCLUSION  
(55) 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 Artic le 6(1)(b) of 
the Merger Regulation and Article 57 of the EEA Agreement . 
For the Commission  
 
(Signed)  
 
Margrethe VESTAGER  
Member of the Commission