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 -MERGE R-REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels, 15.11.2021  
C(2021 ) 8387 final  
PUBLIC VERSION  
 
CVC Capital Partners SICAV -FIS S.A.  
20 Avenue Monterey  
L-2163 Luxembourg  
Luxembourg  
Subject : Case M. 10459 – CVC / S TOCK SPIRITS GROUP  
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 7 October 2021 , the Commission received notification of a concentration , 
pursuant to Art icle 4 of the Merger Regulation , which  would result from a proposed 
transaction  by which  CVC Capital Partners SICAV -FIS S.A.  (“CVC ”, Luxembourg ) 
intends to acquire  sole control, under the meaning of Article 3(1)(b) of the Merger 
Regulation, over Stock Spirits Group plc ( “Stock Spirits ”, United  Kingdom ) by 
means of a public bid (‘the Transaction’) .3 In this Decision, CVC  is referred to as ‘the 
Notifying Party’ and, together with Stock Spirits, collectively referred to as the 
                                                 
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 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 421 , 18.10.2021, p. 7.  
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information omitted has been replaced by 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.  
 
2 ’Parties ’. The entity  that wo uld result from the Transact ion is referred to as ‘the M erged 
Entity’.  
1. THE  PARTIE S  
(2) Stock Spirits  is a producer and distributor of spirit drinks in Europe, including in 
Poland.  
(3) CVC and its subsidiaries manage investment funds and platforms. Zabka Polska 
(“Zabka ”, Poland ) is one of the portfolio companies controlled by CVC and is active 
in the retail distribution of consumer goods in  non-specialized stores in  Poland.   
2. THE  CONCE NTRATION  
(4) The concentration is to be achieved  by means of  the launch of a public bid, which 
was announced on 12 August 2021 and after which CVC expects to indirectly own 
100% of the share capital of Stock Spirits .  
(5) In light of the above, the Transaction would thus result in a concentration within the 
meaning of Article 3(1)(b) of the Merger Regulation.  
3. UNION  DIME NSION  
(6) The Parties  have a combined aggregate world -wide turnover of more than EUR 
5 000 million  (CVC: EUR […]; Stock Spirits: EUR  […]).4 Each of them has 
a Union -wide turnover in excess of EUR 250 million  (CVC: EUR […]; Stock 
Spirits: EUR […]), but neither  of the Parties  achieve s more than two -thirds of their 
aggregate Union-wide turnover within one and the same Member State.  
(7) The concentration  therefore has a U nion dimension  within the meaning of 
Article  1(2) of the Merger Regulation .  
4. MARKE T DE FINITION  
(8) The Parties’ activities  do not give rise to any horizontal overlap. They  give rise to 
vertical relationships between Stock Spirits’ activities in the wholesale supply of 
wine and spirit drinks to off -trade retailers in Poland and CVC’ activities  (through 
Zabka)  in the retail supply of daily consumer goods in Poland.  
4.1. Product market definition  
4.1.1.  Production and distribution of spirit drinks  
4.1.1.1.  The Commission ’s precedents  
(9) In previous decisions, the Commission define d distinct  markets for the production 
and distribution of different types of spirit drinks (e.g. vodka, whisky, brandy, rum, 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
 
3 gin etc.).5 The Commission has also contemplated  further segmentations  according 
to (i) product characteristics  (e.g. blended malt whisky,6 cognac or Armagnac 
brandy7), (ii) price/quality,8 (iii) the country of origin  (e.g. Scottish whisky) and 
(iv) distribution channels (e.g. on -trade or off -trade).9  
(10) As for  vodka  in particular , while leaving the exact market definition open, the 
Commission contemplated in previous decisions  plausible segmentation s (i) between  
flavoured and  clear (i.e. non-flavoured)  vodka  and (ii) according to price .10 To date, 
the Commission has never contemplated the definition of separate markets for 
differe nt bottle sizes.  
4.1.1.2.  The Notifying Party ’s views  
(11) The Notifying Party does not contest the definition of a separate market for the 
supply of vodka in the off -trade channel.11 However, the Notifying Party explains 
that a further segmentation between clear and flavoured vodka is irrelevant. In this 
respect, the Notifying Party submits that the production process of clear and 
flavoured vodka is very similar  and providers typicall y offer both types of products, 
which  they sell side -by-side in retail stores, under the same brand names , with 
similar ads and promotions.  
(12) Likewise, the Notifying Party argues that a further segmentation according to bottle 
sizes12 is irrelevant because: ( i) from the point of view of consumers, the product is 
the same, whatever the size of the bottle and, ( ii) from the point of view of suppliers, 
most bottling lines allow for filling of different sizes  or can be modified easily and 
inexpensively.13 
(13) Regarding  a possible sub -segmentation based on price, the Parties  take the view that 
such a segmentation would  not be relevant because the manufacturing equipment 
and processes for producing lower -priced and higher -priced vodka are identical  and 
most manufacturers supply both “ premium ” and “ mainstream ” brands.  
4.1.1.3.  The Commission ’s assessment  
(A) Distinction by type of spirits  
(14) In the case at hand, t he Commission considers that there is no reason to depart from 
the Commission’s precedents regarding the existence of separate market s for e ach 
                                                 
5  Case M.5114 – Pernod Ricard / V&S . 
6  Case M.3779 – Pernod Ricard / Allied Domecq . 
7  Case M.5114 – Pernod Ricard / V&S . 
8  Case M.5114 – Pernod Ricard / V&S . 
9  Case M.2268 – Pernod Ricard / Diageo / Seagram Spirits ; Case M.3779 – Pernod Ricard / Allied 
Domecq . 
10  Case M.5114 – Pernod Ricard / V&S . 
11  Form CO, paras. 62 -63. 
12  E.g. less than 350 ml, between 500 ml and 700 ml, or above 1000 ml.  
13  Form CO, paragraphs 64 to 68.  
 
4 type of spirits .14 This is not contested by the Notifying Party and is consistent with 
the internal documents provided by the Parties, which look at vodka separately.15 
(15) For the purpose of this case, the Commission considers that there is a s eparate 
market for the production and distribution of vodka.  The Transaction will focus on 
that market because  the Transaction does not give rise to affected markets for the 
production and distribution of other spirits.16 
(B) Distinction by distribution channel  
(16) The market investigation supported the relevance of  the segmentation between on-
trade and off -trade.  From a demand point of view, these two channels differ in terms 
of client s, prices ,17 product characteristics18 and brands.19 By way of illustration, one 
retailer explained that : “Each channel has [its] own spe cific […] model of 
distribution .”20 
(17) In any event, whether the overall market for the production and distribution of vodka 
has to be segmented by distribution channel, i.e. between off -trade and on -trade  can 
be left open , as the Transaction does not give rise to competition concerns under any 
plausible market definition. For the purposes of this Decision  and under a 
conservative approach , the Commission will factor into its assessment of the 
Transaction a distinction by distribution channel.  Given that the overlap between the 
Parties’ activities only concern the off -trade channel, the competitive analysis will be 
conducted on that basis.  
(C) Distinction by format of vodka bottle  
(18) The Commission also examined  whether the segmentation  according to bottle sizes  
is relevant . In this respect, the market investigation elicited mixed results.   
(19) On the one hand, several elements suggest  that a segmentation according to bottle 
sizes could be relevant  as: (i) the Parties m ake a distinction between different bottle 
sizes in their internal documents21, (ii) a majority of retailers explained that the 
                                                 
14  I.e. each individual internationally recognised spirit type (whiskey, gin, vodka, rum, etc.). See M.5114 – 
Pernod Ricard / V&S , para. 8  
15  Annex 8 - CVC Final Investment Recommendation.  
16  Zabka is active only in Poland and Stock Spirits’ sales of vodka in Poland represent [90 -100]% of its total 
volume of sales. As explained in further detail below, CVC’s market share on the downstream market for 
the retail supply of daily consumer goods remains below 30% under any plausible market definition. In 
the mean time, Stock Spirits’ market share remains below 30% under any plausible market definition  for 
the supply of wine or spirit drinks other than vodka to off -trade retailers in Poland  
17  Prices are higher in the on -trade channel than the off -trade channel (Response to Questionnaire 1 to 
retailers, question 4.1).  
18  E.g. small -format vodka is less sold in the on -trade channel which is more focused on larger formats 
(Responses to Questionnaire 1 to retailers, question 4.1).  
19  Mainstream brands of vodka are m ostly sold on the off -trade channel (Responses to Questionnaire 1 to 
retailers, question 4.1).  
20  Response to Questionnaire 1 to retailers, question 4.1.  
21  Annex 8 ( CVC Final Investment Recommendation ). 
 
5 supply of vodka to off -trade retailers differs depending on the format22 and ( iii) not 
all suppliers are active on the segment for  small format vodka .23  
(20) On the other hand, the Commission found evidence suggesting that different bo ttle 
sizes may be substitutable: ( i) from a demand -side perspective, because  a large 
majority of retailers purchase all formats of vodka ; and (ii) from a su pply-side 
perspective, because a large majority of spirits manufacturers indicated that they sell 
all formats of vodka .24 
(21) In any event , whether the overall market for the production and distribution of vodka 
has to be segmented according to  bottle  sizes (i.e. between small , medium  and large 
bottles ) can be left open , as the Transaction  would not give rise to competition 
concerns under any plausible market definition .  
(22) For the purposes of this Decision  and under a conservative approach , the Transaction 
will be assessed  based on a distinction by bottle size.  
(D) Distinction between clear and flavoured vodka  
(23) The Commission also investigated whether the segmentation between clear and 
flavoured vodka is relevant . The market investigation elicited mixed results in th is 
respect.  
(24) On the one hand, the Commission found evidence suggesting that a further 
segmentation between clear and flavoured  vodka could be relevant as: ( i) the Parties 
make a distinction between clear and flavoured vodka in their internal documents25 
and (ii) a majority of retailers consider that the conditions for the supply of vodka to 
off-trade retailers differ  between clear and flavoured vodka.26 One retailer explained 
for instance that the  “Main difference is higher pric e pressure on clear vodka (exci se 
tax higher/lower margins) ”.27 
(25) On the other hand, several elements tend to mitigate the relevance of such 
segmentation because: ( i) most spirits manufacturers sell both types of products28 
and (ii) a majority of retailers buy both types of products29. By way  of illustration,  
according to one retailer: “Regarding [the] comparison of clear and flavored vodka 
there are no significant differences. Price levels, packaging, process of supply is 
similar between these two lines of products ”.30 
(26) In any event, whether th e overall market for the production and distribution of vodka 
has to be segmented between cleared and flavoured vodka  can be left open , as the 
Transaction  does not give rise to competition concerns under any plausible market 
definition. For the purposes of  this Decision  and under a conservative approach , the 
                                                 
22  Response to Questionnaire 1 to retailers, questio n 4. 
23  Responses to Questionnaire 2 to spirits manufacturers, question s 1.1 and 1.2.  
24  i.e., small format of <350 ml, medium format of between 500 ml and 700 ml, and large format of 
>1000ml ( Responses to Questionnaire 2 to spirits manufacturers, question  1.1.). 
25  Annex 8 (CVC Final Investment Recommendation).  
26  Responses to Questionnaire 1 to retailers, question 4.  
27  Response to Questionnaire 1 to retailers, question 4.1.  
28  Responses to Questionnaire 2 to spirit s manufacturers, question 1.2 . 
29  Responses to Questionnaire 1 to retailers, question 1.2.  
30  Response to Questionnaire 1 to retailers, question 5.1.  
 
6 Commission will factor into its assessment of the Transaction a possible distinction 
between clear and flavoured vodka .  
(E) Distinction between premium and mainstream vodka  
(27) The Commission notes that the Parties refer to a distinction between premium and 
mainstream  spirits in their internal documents  (without further segmentations) . By 
way of illustration, CVC’s investment recommendation refers to [Information on 
CVC’s views on market practi ce] for the supply of vodka […].31 Likewise, Stock 
Spirits’ annual report explains that “ Total premium vodka achieved value growth of 
+16.0%, significantly ahead of the total category, reflecting Polish consumers’ 
readiness to pay more for premium quality vo dka as affluence increases ”.32 
(28) In any event, whether the overall market for the production and distribution of vodka 
has to be segmented between premium and mainstream vodka  can be left open , as 
the Transaction does not give rise to competition concerns und er any plausible 
market definition.  For the purposes of this Decision  and under a conservative 
approach , the analysis will be conducted based on a distinction between premium 
and mainstream vodka.  
4.1.2.  Retail of daily consumer goods  
4.1.2.1.  The Commission’s precedents  
(29) In its precedents, t he Commission defined a distinct market for the retail provision of 
daily consumer goods, including dry food -stuffs and non -food household 
consumables sol d in a supermarket environment.33 Within this market, the 
Commission contemplated f urther segmentation between specialised stores on the 
one hand, and hypermarkets, supermarkets and disc ount chains, on the other hand.34 
4.1.2.2.  The Notifying Party’s view  
(30) The Notif ying Party does not contest the  product market definition set out by the 
Commission in its precedents.  
4.1.2.3.  The Commission’s assessment  
(31) In the case at hand, the Commission does not see any reason to depart from its 
previous decisional practice. In any event, whether the market for retail distribution 
of daily consumer goods  has to be segmented between hypermarkets, supermarkets, 
discount chains, on the one hand, and specialised stores, on the other hand can be left 
open , as the Transaction does not give rise to competition concerns under any 
plausible market definition. For the purposes of this Decision  and under 
a conservative approach , the analysis will be conducted also based  on the narrowest 
possible product segment s, i.e. (i) market for the retail distribution of daily consumer 
                                                 
31  Annex 8 (CVC Final Investment Recommendation ), p. 9.  
32  Annex 7 (Stock Spirits’ annual report), p. 28.  
33  Case M.803 – Rewe / Billa  ; Case M.914 – Tesco / ABF . 
34  Case M.784 – Kesko / Tuko ; Case M.803 – Rewe / Billa ; Case M.914 – Tesco / ABF ; Case M.1221 – Rewe 
/ Meinl ; Case M.1832 – Ahold / ICA Förbundet / Canica ; Case M.3905 – Tesco / Carrefour (Czech 
Republic and Slovakia) ; Case M.4590 – Rewe / Delvita ; Case M.5790 – Lidl / Plus Romania / Plus 
Bulgaria ; Case M.9495 – Fortenova Grupa / Poslovni Sistemi Mercator . 
 
7 goods in hypermarkets, supermarkets and dis count chains and (ii) market for the 
retail distribution of daily consu mer goods in specialised stores .  
4.2. Geographic market definition  
4.2.1.  Production and distribution of spirit drinks  
4.2.1.1.  The Commission ’s precedents  
(32) In past decisions, the C ommission considered the market s for the production and 
distribution of spirit drinks to be national in scope, mainly because of strong national 
preferences and consumption behaviours.35 
4.2.1.2.  The Notifying Party ’s view 
(33) The Notifying Party  does not contest the geograph ic market definition set out by the 
Commission  in its precedents.  
4.2.1.3.  The Commission ’s assessment  
(34) In the case at hand, the market investigation confirmed that there is no reason to 
depart from the Commission’s precedents . First , some elements show the existen ce 
of national consumer preferences. In this respect, one retailer explained that “ [the 
typical] Polish client prefers clear vodka. ”36 
(35) Second , a vast majority of retailers confirmed that purchases are conducted centrally 
at national level. As explained by one retailer: “ All trade conditions and terms are 
negotiated centrally as well as all current orders for all shops .”37 According to 
another retailer: “ Contracts with suppliers negotiated centrally by sourcing 
department for all clients ”.38 
(36) For the purpose of  this Decision, t he overall market for the production and 
distribution of vodka to the off -trade channel39 will thus be considered as national in 
scope.  
4.2.2.  Retail of daily consumer goods  
4.2.2.1.  The Commission’s precedents  
(37) The Commission considered those markets to b e local, with a radius of 20 to 
30 minutes by car, with the  exact length of time depending on the specific market 
being examined or, in specific cases, regional or national .40 
                                                 
35  See e.g.: M.5114 – Pernod Ricard / V & S . 
36  Response to Questionnaire 1 to retailers, question 5.1.  
37  Response to Questionnaire 1 to retailers, question 3.1.  
38  Response to Questionnaire 1 to retailers, question 3.1.  
39  As mentioned in paragraph (77), the overlap bet ween the Parties’ activities onl y concerns the off -trade 
channel.  
40  Case M.784 – Kesko / Tuko ; M.16 84 – Carrefour / Promodes ; Case M.1832 – Ahold / ICA Förbundet / 
Canica ; Case M.3464 – Kesko / ICA / JV ; Case M.3905 – Tesco / Carrefour (Czech Republic and  
Slovakia) . 
 
8 4.2.2.2.  The Notifying Party’s view  
(38) The Notifying Party does not contest the se market defi nition s.  
4.2.2.3.  Commission’s assessment  
(39) In the case at hand, the Commission does not see any reason to depart from its 
previous decisional practice. In any event, the exact scope of the relevant geographic 
market for the retail distribution of daily consumer goo ds can be left open as  the 
Transaction does not give rise to competition concerns under any plausible market 
definition.  For the purposes of this Decision, the Transaction will also factor into its 
assessment  the narrowest possible geographic segments , i.e. local markets.  
5. COMPE TITIVE ASSE SSME N T 
(40) In Poland, Spirit Stocks supplies sparkling wine and various spirit drinks,41 mainly to 
off-trade retailers , while CVC, through Zabka, is active on the retail distribution of 
daily consumer goods.  As set out in par agrap h (8) above, the Parties ’ activities do 
not give rise to any horizontal overlap s. The Tra nsaction does, however, give rise to 
vertically affected markets betwee n: 
(a) Stock  Spirits’ activities on the upstream market s for the production and 
distribution of (i) small format clear vodka  (overall and with a distinction  
between premium and mainstream)  and (ii) small format flavoured vodka  
(overall and with a  distinction  between premium and mainstream) ; (iii) 
medium format flavoured  vodka  (overall and with a distinction  between 
premium and mainstream)42 to off -trade retailers in Poland : 
(b) CVC’s activities (through Zabka) on the downstream market s for (i) the off-
trade retail distribution of daily consumer goods in  specialized stores in  
Poland  and (ii) the off -trade retail distribution of daily consumer goods in 
hypermarkets, supermarkets and discount chains in Poland .  
5.1. Legal framework  
(41) Pursuant to Article 2(2) and (3) of the Me rger Regulation, the Commission must 
assess whether a concentration would significantly imp ede effective competitio n in 
the internal market or in a substantial part of it, in particular through the creation o r 
strengthening of a dominant position . In this respect, a merger can entail horizontal 
and/or non -horizontal effects.  
(42) With particular regard t o non-horizont al effects, a  merger can entail such effects 
when it involves companies operating at different levels of the same value  chain or 
in closely related  markets.  
(43) In assessing potential vertical effects of a merger, the Commission analyses , among 
others , whether the merger results in foreclosure so that actual or potential rivals ’ 
                                                 
41  Vodka, whisky, brandy, gin, genever, rum, cream liqueurs, tequila, cognac, Armagnac and Spirytus 
Lubelski.  
42  Stock Spirits’ market share remains below 30% under any plausible market definition  for the supply of 
wine or spirit drinks other t han vodka to off -trade retailers in Poland .  
 
9 access to supplies or markets is hampered or eliminated as a result of the merger, 
thereby reducing those companies ’ ability  and/or incentive to compete.43 Such 
foreclosure may discourage entry or expansion of rivals or encourage their exit. 
Foreclosure thus can be found even if the foreclosed rivals are not forced to exit the 
market. It is sufficient that the rivals are disadvantaged and consequently led to 
compete less effectively. Such foreclosure is regarded as anti -competitive where the 
merging companies — and, possibly, some of their competitors as well — are as a 
result able  to profitably increase the price charged to consumers.  
(44) The Non -Horizontal Merger Guidelines distinguish between two forms of 
foreclosure: ( i) input foreclosure, when access of downstream ri vals to supplies is 
hampered;44 and ( ii) customer foreclosure, when  access of upstream rivals to 
a sufficie nt customer base is hampered.45 
(45) In assessing both types of foreclosure, the Commission assesses whether the merged 
entity ( i) would have the ability to engage in foreclosure, ( ii) whether it would have 
the incentive to do so, and ( iii) what would be the overall impact on effective 
competition in the affected markets.  
(46) The present Section 5 assesses whether the Transaction is like ly to raise vertical non -
coordi nated effects on the markets examined in Section 4.  
5.2. Assessment  
(47) In light of the above, th is Decision will first provide an overview of the Parties’ 
market shares (5.2.1)  and will examine successively the risk of input foreclosure 
(5.2.2 ) and customer foreclosure (5.2.3 ). 
5.2.1.  Market shares  
(48) Table 1 outlines the Parties’ market shares  on the overall upstream market for the 
production and distribution of vodka in Poland and on the overall downstream 
market  for the retail of dai ly consumer goods  in Poland :  
                                                 
43  Non-Horizontal Merger Guidelines, paras. 20-29. 
44  Non-Horizontal Merger Guidelines, para. 31.  
45  Non-Horizontal Merger Guidelines, para. 58. 



 
13 (55) As shown in Table 1 , Stock Spirits ’ market share  amounts to [30-40]% on the 
overall off-trade  market for the production and distribution of vodka . There are 
12 narrower segments that are affected, with the Parties’ combined market shares 
ranging from [30-40]% to [40-50]%. For the reasons set out below, however, the 
Commission considers that CVC will lack the abil ity to engage in input foreclosure 
post-Transaction.  
(56) First , CVC will lack a significant degree of  market power on the upstream market52 
as it will continue to face significant competitive pressure from Roust, which has a 
higher market share on all segments,  to the exception of the segm ent for small 
flavoured vodka. Even o n this segment, however, Roust has a market share of 
[40-50]% and is a  close competitor of Stock Spirits.  This is consistent with CVC’s 
internal investment recommendation , which [Information  on CVC’s views on market 
conditions] .53  
(57) This is also consistent with the fact that a large majority of retailers  (80%) 
acknowledged that they would continue to have credible alternative suppliers , 
including for small bottles of flavoured vodka.54  
(58) Second , there does not seem to be significant switching costs for retailers55 as the 
large majority of retailers who participated in the market investigation already  
multisource from several suppliers (including for small bottles of flavoured vodka) .56 
In response t o an input foreclosure strategy, these retailers could thus easily switch 
to the remaining alternative suppliers.  
(59) Third , on the segment for small flavoured vodka, CVC will continue to face a certain 
degree of competitive pressure from other formats. In thi s respect, the Commission 
notes that after the introduction on 1 January 2021 of an additional tax in Poland on 
small bottles of vodka (the “Small Format Tax ”) a number of customers  switched  to 
purchasing larger formats.57 
(60) In thi s respect, the figure below shows the total sales of vodka by bottle size for the 
months following the introduction of the tax in January 2021 ver sus sales in the 
preceding year.  
                                                 
52  Non-Horizontal Merger Guidelines, para. 35. 
53  As for the segment of premium vodka, Stock Spirits will have a market share of [20 -30]% whereas 
Roust’s market share will be limited to only [10 -20]%. On this segment, however, Stock Spirit s will 
continue to face significant competitive pressure from Pernod Ricard ([20 -30]%) and other competitors 
with sizeable market shares, including Polmos ([10 -20]%) and Brown -Forman  ([10-20]%).  
54  Response s to Questionnai re 1 to retailers, question 8.  
55  Non-Horizontal Merger Guidelines, para. 34.  
56  Response s to Questionnai re 1 to retailers, question 2.  
57  The Small Format Tax comprises a duty increase imposed on wholesalers of PLN 25 (c. EUR 5.5) per litre 
of pure alcohol on formats of 300ml or less. For  example, a 100ml bottle of 40% ABV spirit would incur 
an additional duty of PLN 1, and an equivalent 40% ABV spirit packaged in a 200ml bottle would incur 
an additional duty of PLN 2. The Target is not aware of how the Polish government determined the lev el 
of the Small Format Tax as the Polish authorities have not publicly indicated on what basis the amount of 
25 PLN per litre of pure alcohol was decided. The Small Format Tax does not technically apply to sales to 
consumers via the on -trade, but in any ca se, the Target notes that in practice, it is very difficult for 
manufacturers such as itself to ascertain whether products will ultimately be sold by wholesalers to 
retailers and consumers via the on - or off -trade. The Target also notes that sales of small  format spirits to 
the on -trade are minimal.  

 
15 (63) Based on the considerations above, and in light of the results of the market 
investigation and of all the evidence available to it , the Commission finds that the 
Merged Entity will lack the ability to engage in input foreclosure post -Transaction.  
5.2.2.2.  Incentive  
(64) For the reasons set out below, the Commission considers  that the Merged Entity will 
lack the incentive to engage in input foreclosure post -Transaction.  
(65) First , the limited market s hare of Zabka  (CVC)  on the downstream market at 
national level ( [10-20]%) makes it less likely that it will have the incentive to engage 
in input foreclosure because the base of sales on which Stock Spirits would enjoy 
increased margins would be limited59. 
(66) Second , several participants to the market investigation confirmed that Zabka would 
be too small on the downstream market s for the Merged Entity to have an incentive 
to engage in input foreclosure. In addition, the market investigation did not reveal 
that Zabka would be a significant player on any local market. A ccording to one 
retailer , for instance : “Zabka is too small in terms of volume and do [es] not have full 
coverage in total Poland ”.60 Likewise, according to another retailer:  “We do not see 
a real risk that Stock Spirits would stop selling us vodka ”.61  
(67) Based on the considerations above, and in light of the results of the market 
investigation and of all the information available to it, the Commission considers  
that CVC will lack the ability and incen tive to engage in input foreclosure post -
Transaction . As a result, the Commission concludes that the contemplated 
Transaction does not give rise to input foreclosure concerns without there the need  to 
consider the overall impact that such a  strategy would have on the market . 
5.2.3.  Customer foreclosure  
5.2.3.1.  Ability  
(68) Some competitors of Stock Spirits expressed concerns during the market 
investigation alleging that Zabka  would be an unavoidable trading partner for the 
supply of vodka in Poland, in particular because Zabka is a big and fast -growing 
retailer, especially on the segment for small convenience stores.62 However, for the 
reasons set out below, the Commission  considers that CVC would lack the ability to 
foreclos e Stock Spirits’ competitors upstream.  
(69) First , Zabka lacks a significant degree of  market power downstream for the retail 
distribution of daily consumer goods. As explained above, on this market Zabka’s 
share  at national level is equal to [10-20]% and this market share remains also 
limited at  regional level (below [10-20]%). At local level, based on the Parties’ best 
                                                 
59  Likewise, when considering local markets for the retail distribution of daily consumer goods, the limited 
size of local markets downstream would limit the incentive of the new entity  to engage in input 
foreclosure because ( i) the base of sales on which Stock Spirits would enjoy increased margins would be 
local; whereas ( ii) all competing retailers confirmed that they purchase vodka at national level ( i.e. 
centrally for all their stores in Poland) so the base of sales on which S tock Spirits would lose volumes 
would be national (response to Questionnaire 1 to retailers, question 3).  
60  Response to Questionnai re 1 to retailers, question 9.  
61  Response to Questionnai re 1 to retailers, question 9.  
 
16 estimates, Zabka’s market share would remain below 30% so Stock Spirits’ 
competitors would rem ain able to sell their products to a  sufficient number of 
alternative customers.  
(70) Second , the market investigation confirmed that Stock Spirits’ competitors will 
continue to have a sufficient client base post -Transaction as Zabka only represents 
approximately [10-20]% of their sales of vodka.63 Based on the Parties’ internal data, 
this figure does not appear to change significantly across segments.  
(71) Third , Stock Spirits’ competitors already supply Zabka’s competit ors64. This shows 
that Zabka’s competitors constitute credible alternatives to which Stock Spirits’ 
competitors upstream could easily switch. Therefore , the Commission is of the view 
that CVC will lack the ability to engage in customer foreclosure post -Transaction.  
5.2.3.2.  Incentive  
(72) For the reasons set out below , the Commission considers that the Merged Entity will 
lack the incentive to engage in customer  foreclosure.  
(73) First , Zabka’s limited market share downstream limits the base of sales on which 
Stock Spirits coul d benefit from increased margins as a result of a customer 
foreclosure strategy.65  
(74) Second , only a minority of upstream competitors expressed concerns that the 
transaction would have an impact on the distribution of vodka in retail stores in 
Poland.66 One competitor of Stock Spirits explained in particular that “ given the 
percentage share of Zabka stores in vodka sales in Poland, there will be no 
impact ”.67 
(75) Accordingly, the Commission finds that  the Merged Entity will lack the ability and 
incentive to e ngage in customer  foreclosure so there is no need to consider the effect 
of any such strategy.  
5.2.4.  Conclusion on vertical non -coordinated effects  
(76) In light of the considerations above and based on the results of the market 
investigation and of all the informati on available to it, the Commission concludes  
that the Transaction do es not give rise to serious doubts as to its compatibility with 
the internal market and the EEA agreement with respect to  vertical non -coordinated 
effects  in:  
(a) the upstream markets for the  production and distribution of (i) small format 
clear vodka (overall as well as distinguishing between premium and 
mainstream) and (ii) small format flavoured vodka (overall as well as 
distinguishing between premium and mainstream); (iii) medium format 
                                                                                                                                                      
62  Response s to Questionnai re 2 to competitors, question 5.  
63  Non-Horizontal Merger Guidelines, para. 61.  
64  Responses to Questionnaire 1 to retailers, question 2.  
65  Non-Horizontal Merger Guidelines, para. 70. 
66  Response to Questionnaire 2 to competitors, question 7.  
67  Response to Quest ionnaire 2 to competitors, question 8.1.  
 
17 flavoured vodka (overall as well as distinguishing between premium and 
mainstream)68 to off -trade retailers in Poland ; 
(b) the downstream markets for (i) the off -trade retail distribution of daily 
consumer goods in specialized stores in Poland and (ii) the off -trade retail 
distribution of daily consumer goods in hypermarkets, supermarkets and 
discount chains in Poland.  
6. CONCLUSION  
(77) For the above reasons, the 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 Agreement .  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President  
                                                 
68  Stock Spirits’ market share remains below 30% under any plausible market definition  for the supply of 
wine or spirit drinks other than vodka to off -trade retailers in Poland .