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, 23.05.2022  
C(2022) 3506 final  
PUBLIC VERSION 
 
CVC Capital Partners SICAV -FIS S.A.  
20 Avenue Monterey 
2163 Luxembourg  
Grand Duchy of  Luxembourg  
Subject : Case M. 10578 – CVC / E KATERRA 
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 12 April 2022, the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which CVC 
Capital Partners SICAV -FIS S.A. (“CVC” or the “Notifying Party”, Luxembourg) 
acquires sole control of ekaterra B.V. (“ekaterra”, Netherlands) (together referred 
to as the “Parties”) under the mea ning of Article 3(1)(b) of the Merger Regulation 
(the “Transaction”).3  
                                                 
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 170, 25.04.2022, p. 11.  
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information omitted has been replaced by ranges of figures or a general description.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 1. THE PARTIES  
(2) CVC and its subsidiaries manage investment funds which hold interests in a 
number of companies active in various industries. Zabka Polska (“Zabka ”) is one 
of the portfolio companies controlled by CVC and is active in the retail distribution of consumer goods in Poland, through a franchise network of approximately 8,000 
convenience stores . 
(3) Ekaterra is an indirect wholly owned subsidiary of Unilever PLC (“Unilever”), 
which carries out a tea business consisting of the cultivation, processing and supply 
of leaf tea, the researching and developing, manufacturing, producing, packaging, 
packing, marketing, distributing and selling of tea products worldwide .
4  
2. THE CONCENTRATION  
(4) For the purpose of the Transaction, the Parties have set up a special purpose vehicle (Puccini Bidco B.V., “Puccini”) which is indirectly solely controlled by CVC. 
According to the Share Purchase Agreement (“SPA”) entered into between Puccini 
and Unilever on 18 November 2021, Puccini is to acquire the entire issued share 
capital of ekaterra. As a result, CVC will indirectly acquire (i.e. through Puccini) 
sole control of ekaterra, which amounts to a concentration within the meaning of 
Article 3(1)(b) of the Merger Regulation.  
3. U
NION  DIMENSION  
(5) The undertakings concerned have a combined aggregate world-wide turnover of 
more than EUR 5 000 million5. Each of them has a  Union- wide turnover in excess 
of EUR 250 million, but they do not achieve more than two-thirds of their aggregate Union-wide turnover within one and the same Member State. The 
notified operation therefore has a U nion dimension.  
4. M
ARKET DEFINITIONS  
(6) The Transaction does not give rise to any horizontal overlap between the Parties’ 
activities but gives rise to vertical relationships between ekaterra’s activities on the 
markets for the production and supply of branded tea to modern trade  retailers in 
Poland (upstream) and CVC’s activities (through Zabka) on the market s for the 
retail distribution of daily consumer goods in Poland (downstream). 
4.1. Product markets  
4.1.1. Production and supply of tea  
4.1.1.1. The Commission’s past practice  
(7) The Commission has not yet investigated specifically the  market for the production 
and supply of tea. In previous decisions, however, the Commission distinguished  
                                                 
4 Excluding India, Indonesia and Nepal.  The perimeter of the Transaction does neither include 
Unilever’s interests in the PepsiLipton joint ventures with Pepsico in relation to ready -to-drink 
(“RTD ”) tea.  
5  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
3 between  the production and supply of alcoholic beverages and non-alcoholic 
beverages.6  
(8) Within non-alcoholic beverages, the Commission made a further distinction 
between ready -to-drink beverages and other ingredients  that require brewing , such 
as coffee .7  
(9) The Commission also considered a further segmentation by distribution channel, 
with a distinction between supply to out-of-home (“OOH”)  outlets , such as 
restaurants and hotels , and supply to retail outlets .8 Finally , with respect to coffee, 
the Commission contemplated but ultimately rejected a further segmentation 
between branded and private label products.9  
4.1.1.2. The Notifying Party’s view  
(10) The Notifying P arty considers that the relevant product market is the market for the 
production and supply of tea, which should be distinguished from alcoholic 
beverages  and other non-alcoholic beverages .10 The No tifying Party further 
considers  a segmentation between  brew ed tea and ready- to-drink tea  is relevant.11  
(11) In contrast , the Notifying Party considers that the market should not be further 
segmented (i) between brands and private labels12, (ii) according to the type of tea 
(i.e. black tea, green tea, herbal tea, fruit tea, tisanes) or (iii) according to formats 
(i.e. tea bags, loose tea, capsules).13  
4.1.1.3. The Commission’s a ssessment  
(12) As to the existence of a separate market for the production and supply of tea , 
retailers refer to tea as a distinct category14 which is of specific importance in 
Poland due to the specific taste of Polish consumers for tea.15 This is also 
consistent with the Parties’ internal documents […].16 
(13) As to potential segmentations within the production and supply of tea, t he results of 
the market investigation suggest that distinctions  by type of tea  (black or green tea) 
and format s (bags or loose tea), as well as segmentations by distribution channel or 
between private labels and branded tea, are relevant .  
                                                 
6 COMP /M.2268 – Pernod Ricard/Diageo/Seagram Spirits, COMP/M.2276 – The Coca- Cola 
Company/Nestlé/JV , COMP/M.2504 – Cadbury Schweppes/Pernod Ricard, COMP/M.3182 –  
Scottish & Newcastle /Hp Bulmer , COMP/M.5114 – Pernod Ricard/ V&S, COMP/M.7292 –  
Demb /Mondelez /Charger  Opco , COMP/M.9369 -  Pai Partners/Wessanen.  
7 Case M.9122 -  TCCC / COSTA . 
8 Case M.5560 – Carlsberg Deutschland/Nordmann/JV Nordic Getränke . 
9 Case M.7292 –DEMB / Mondelez / C harger Opco.  
10 Form CO, para 76.  
11 Form CO, para 77. Ekaterra does not sell RTD tea as the perimeter of the Transaction does not 
include Unilever’s interests in the PepsiLipton joint ventures.  
12 Form CO, paras. 96- 99. 
13 Form CO, paras. 89- 95. 
14  See for instance the non -confidential minutes of a conference call with  a retailer held on 30 March 
2022 and non -confidential minutes of a conference call with a retailer held on 27 April 2022. 
15  Non-confidential minutes of a conference call with a retailer held on 24 March 2022.  
16  Form CO, annex 8.  
4 (14) Even if a majority of retailers c onsiders there are no major differences between the 
conditions of supply of any types  or formats  of tea to retailers, they consider that 
characteristics of tea (colour or format) are important in driving customers’  
choices.17 As explained by a retailer “ There are no differences in purchasing for 
different types of teas, but there are differences in the level of demand for 
individual types of teas from retail (shop) customers .”18 
(15) Similarly, from a supply-side perspective, some tea players in Poland are only 
active in specific segments of tea: Herbapol, for example, is the market leader in 
fruit and herbal tea but does not have a black tea offering. Large -scale entry in the  
segment of black tea also appears to be challenging. As explained by one 
competitor “ In black teas, it is very difficult to build an effect of scale in the sale of 
a new product and brand. It also requires large investments in modern machinery and marketing expenditure on building the brand identity ”.
19 
(16) Furthermore, t he Commission notes that when the Parties refer to tea in their 
internal documents, […], as shown in the graphs below : 
[...] 
(17) Likewise, […].20 
(18) Moreover, several national competition authorities have previously defined a 
market for the production and supply of tea, with a distinction between black tea, 
green tea, flavoured tea and infusions/health tea.21 
(19) In addition, the limited penetration rate of private label tea in Poland, which 
accounts for only 17% of the total retail sales of tea  in value , and the importance of 
some brands that are considered by retailers as must -carry (see  below competitive 
assessment)  suggest s that private label tea exerts little competitive pressure on 
branded tea.22 
(20) In any event, potential segmentations by type of tea, by format, by distribution 
channel and be tween branded tea and private label tea can be left open as the 
Transaction does not give rise to competition concerns under any plausible product market definition. In the case at hand, the Commission will assess the Transaction 
under the narrowest plausi ble product market definition (where ekaterra’s upstream 
market share is the highest), i.e. the market for the production and supply of 
branded tea to modern trade retailers with a distinction by type of tea and by 
format. 
                                                 
17  Questionnaire to retailers, non -confidential response to question 6.1.  
18  Questionnaire to retailers, non -confidential response to question 6.1.  
19  Questionnaire to competitors , non- confidential response to question 11.2.  
20  Form CO, Annex 8.  
21  See e.g.: the French Competition Authority’s decision in Case No. 16- DCC- 21 - Phoenix Beverages 
Limited/GML Investissement LTEE/Société pour l’Exploitation et le Développement des Eaux de 
Sources  and the Slovenian Competition Authority’s decision in Case N o. 3061- 11/2013 - Atlantic 
Trade d.o.o./Prodis d.o.o.  
22  Form CO, para. 119. The presence of must -carry brands (brands that retailers need to carry because 
otherwise they would lose substantial sales of the category) is a factor that led to a distinction between brands and private label in previous cases, see for example: Case M. 5046 -  Friesland 
Foods  / Campina (as regards dairy drinks and deserts).  
5 4.1.2. Retail distribution of daily cons umer goods  
4.1.2.1. The Commission’s past practice  
(21) In its previous practice , the 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.23  
(22) Within this market, the Commission contemplated a further segmentation between 
specialised stores on the one hand, and hypermarkets, supermarkets and disc ount 
chains, on the other hand.24 With respect to Poland, in particular, the Commission 
has also conte mplated distinguishing  a separate market for small retailers, 
including convenience stores located at fuel stations and kiosks , to the exclusion of 
hypermarkets, supermarkets and discount  stores .25  
4.1.2.2. The Notifying Party’s view  
(23) The Notifying Party does not contest the product market definition set out by the 
Commission in its precedents.  
4.1.2.3. The Commission’s a ssessment  
(24) In the case at hand, the Commission does not see any reason to depart from its 
previous decisional practice. In any event, the question whether the market for 
retail distribution of daily consumer goods  is segmented between hypermarkets, 
supermarkets, discount chains, on the one hand, and specialised stores  or small 
retailers , on the other hand can be left open, as the Transaction does not  give rise to 
competition concerns under any plausible market definition.  
(25) For the purpose  of this Decision, the analysis will be conducted based on the 
narrowest possible product segments  (on which Zabka’s market share is the 
highest), i.e. the market for the retail distribution of daily consumer goods in small 
retail stores26 to the exclusion of hypermarkets, supermarkets and discount  stores . 
4.1.3. Procurement  of daily consumer goods  
4.1.3.1. The Commission’s past practice  
(26) In previous decisions, the Commission has considered a market for the procurement of daily consumer goods, distinct from the retail distribution market.
27 
In these decisions, the Commission considered that procurement of different 
categories of products may constitute separate markets28 (e.g., procurement of basic 
foodstuffs, procurement of wine and spirit drinks). The Commission also 
                                                 
23  Case M.803 – Rewe / Billa  ; Case M.914 – Tesco / ABF . 
24  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 . 
25  Case M.9561 – PKN ORLEN / RUCH , para. 14; Case IV/M.784 -  Kesko/Tuko , paragraph 20.  
26  Including convenience stores located at fuel stations and kiosks . 
27 COMP/M.1221 – Rewe / Meinl ; COMP/M.9495 – Fortenova Grupa / Poslovni Sistemi Mercator . 
28 In M.7933 – Carrefour / Billa Romania, the Commission also considered a different segmentation 
of the procurement market for daily consumer goods into 23 product categories. 
6 previously considered, but ultimately left open, whether a further distinction should 
be made between different sales channels, such as food-retailing, specialis ed trade, 
delicatessen, cash and carry stores and other wholesalers drugstores and export 
trade.29  
4.1.3.2. The Notifying Party’s view  
(27) The Notifying Party does not contest the product market definition set out by the Commission in its precedents.  
4.1.3.3. The Commission’s a ssessment  
(28) In the case at hand, the Commission does not see any reason to depart from its 
previous decisional practice. In any event, the questions whether the procurement of different categories of products (e.g. basic foodstuffs, wine and spirit drinks, 
etc.) or the different sales channels (e.g. food retailing, specialised trade, etc.) 
belong to separate markets can be left open, as the Transaction does not give rise to 
competition concerns under any plausible market definition.  
(29) For the purpose  of this de cision , the analysis will be conducted on the segment for 
the procurement of daily consumer goods by modern trade retailers , where Zabka’s 
market share is higher than for the tea category. 
4.2. Geographic markets  
4.2.1. Production and supply of tea  
4.2.1.1. The Commission’s pa st practice  
(30) As explained above, the Commission has not yet defined a separate market for the 
production and supply of tea. In its precedents, however, the Commission has 
defined the markets for non-alcoholic beverages as national in scope.
30 
4.2.1.2. The Notifying P arty’s view  
(31) The Notifying Party agrees that the potential tea markets, like other fast -moving 
consumer goods, are likely to be national in scope.  
4.2.1.3. The Commission’s a ssessment  
(32) The results of the market investigation confirmed the relevance of a national 
market for the production and supply of tea in Poland. A large majority  of 
customers indicate d that they purchase tea at national level.31 In this respect, one 
retailer explained for instance that ‘[it ] purchases branded tea mostly on the 
national level, in or der to supply [Confidential] stores in Poland’.32 In addition, the 
Commission notes that […].33 
                                                 
29 COMP/M.1221 – Rewe / Meinl ; COMP/ M.9495 – Fortenova Grupa / Poslovni Sistemi Mercator . 
30 COMP/M.2268 – Pernod Ricard / Diageo / Seagram Spirits ; COMP/M.7178 – Suntory / Beam . 
31  Questionnaire to retailers, non -confidential response to question 4.  
32  Questionnaire to retailers, non- confidential response to question 4.1.  
33  Form CO, Annex 8.  
7 (33) In view of the above, the Commission takes the view that the market for the 
production and supply of tea in Poland is likely to be  national in scope. In the case 
at hand, the Commission will assess the competitive effect of the Transaction on the national market for the production and supply of branded tea to modern trade 
retailers  in Poland, with a further distinction by type of tea  and by format.  
4.2.2. Retail distribution of daily consumer goods  
4.2.2.1. The Commission’s past practice  
(34) In previous decisions, the Commission considered the markets for the distribution  
of daily consumer goods to be local, with a radius of 20 to 30 minutes by car.
34 In 
Poland in particular, the Commission has contemplated the definition of local 
markets, extending to a 1-kilometer radius around each store.35 
4.2.2.2. Notifying Party’s view  
(35) The Notifying Party does not contest these market definitions.  
4.2.2.3. The Commission’s a ssessm ent 
(36) 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 goods , i.e. the exact 
geographic scope of the catchment areas , can be left open, as the Transaction does 
not give rise to competition concerns under any plausible geographic market 
definition. In the case at hand, the Commission will assess the Transaction under 
the narrowest and most conservative plausible geographic market definition, i.e. the local market for the retail distribution of daily consumer goods at the commune 
(gmina)
 level in Poland . 
4.2.3. Procurement  of daily consumer goods  
4.2.3.1. The Commission’s past practice  
(37) From a geographic point of view, the Commission has considered the markets for 
the procurement of daily consumer goods to be national in scope.36 
4.2.3.2. The Notifying Party’s view  
(38) The Notifying Party does not contest these market definitions.  
                                                 
34  With the exact length of time depending on the specific market being examined. See e.g.: Case 
M.784 – Kesko / Tuko ; M.1684 – Carrefour / Promodes ; Case M.1832 –  Ahold / ICA Förbundet / 
Cani ca; Case M.3464 –  Kesko / ICA / JV ; Case M.3905 –  Tesco / Carrefour (Czech Republic and 
Slovakia) . 
35  Case M.9561 – PKN ORLEN / RUCH , para. 17. 
36 COMP/M.1221 – Rewe / Meinl ; COMP/M.1684 – Carrefour / Promodes; CMP/M.1832 -  Ahold /   
ICA Förbundet / Canica. 
8 4.2.3.3. The Commission’s a ssessment  
(39) In the case at hand, the Commission does not see any reason to depart from its 
previous decisional practice  and considers  that the procurement of daily consumer 
goods is national in scope . 
5. COMPETITIVE ASSESSMEN T 
(40) Ekaterra sells branded tea in Europe , including in Poland w here one of CVC ’ 
sportfolio companies∗ is active in the retail distribution of daily consumer goods 
(Zabka). Accordingly, the Transaction gives rise to vertical relationships between:  
(a) ekaterra’s activities on the markets for the production and supply of branded 
tea to retailers in Poland (upstream), notably under the Lipton and Saga 
brands (ekaterra does not sell private label tea);  
(b) Zabka’s activities on the market for the retail distribution of daily consumer 
goods in Poland (downstream).  
5.1. Legal framework  
(41) Pursuant to Article 2(2) and (3) of the Merger Regulation, the Commission must 
assess whether a concentration would significantly impede effective competition in 
the internal market or in a substantial part of it, in particular through the creation or strengthening of a dominant position. In this respect, a merger can entail horizontal 
and/or non-horizontal effects. 
(42) With particular regard to non-horizontal 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 ’ 
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.
37 Such 
foreclosure may discourage entry or expansion of rivals or encourage their exit. 
Foreclosure thus can be found even if the forecl osed 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;
38 and (ii) customer foreclosure, when access of upstream rivals to a 
sufficie nt customer base is hampered.39 
(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 
                                                 
∗  Should read: ‘ CVC Funds ’ Portfolio Companies ’ 
37  Non-Horizontal Merger Guidelines, paras. 20- 29. 
38  Non-Horizontal Merger Guidelines, para. 31. 
39  Non-Horizontal Merger Guidelines, para. 58. 
9 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 likely to raise vertical 
non-coordinated effects on the markets examined in Section 4. 
5.2. The Commission’s a ssessment  
(47) In light of the above, this Decision will first provide an overview of the Parties’ 
market shares (5.2.1) and will examine successively the ri sks of input foreclosure 
(5.2.2) and cus tomer foreclosure (5.2.3). 
5.2.1. Market shares  
(48) Table 1 outlines the Parties  and their competitors ’ market shares on the overall 
upstream market for the production and supply of tea in Poland and on the overall downstream market for the retail distribution of dai ly consumer goods in Poland in 
2020.
40 Downstream market shares are provided at national level as the Notifying 
Party was not able to provide local market shares. However, the Notifying Party 
confirmed that Zabka’s market share for the retail distribution of daily consumer 
goods would not exceed [30-40]% at local level , considering in particular the 
commune ( gmina ) level . 
Table 1 – Market shares: overview  
2020 UPSTREAM  DOWNSTREAM  
Production and supply of branded tea -  
Modern trade  
(Poland)  Retail distribution of daily 
consumer goods  in 
convenience stores41  
(Poland)  
Value (€)  Volume  Value (€)  
CVC  - - [10-20]% 
Ekaterra  [30-40]% [30-40]% - 
Combined  [30-40]% [30-40]% [10-20]% 
Competitor 1  Herbapol: [10 -20]% Herbapol: [10 -20]% ABC: [20- 30]% 
Competitor 2  Mokate: [5 -10]% Mokate: [10- 20]% Nasz sklep: [5 -10]% 
Competitor 3  Dilmah: [0 -5]% Dilmah: [0 -5]% Lewiatan: [5 -10]% 
Source:  Form CO, Tables 3 and Annex PN RFI 4 Q2.1  
                                                 
40  The market shares of the Parties both at the upstream and downstream levels for those markets 
remained stable over the last three years. Ekaterra’s value market share in the upstream market for the production and supply of branded tea to modern trade retai lers in Poland was [40- 50]% in 2018 
and [40- 50]% in 2019, and Zabka’s market share in the retail distribution of daily consumer goods 
in convenience stores in Poland remained below [20-30]% in 2018 and 2019 (see the Notifying 
Party’s response to RFI 6).  
41  Small format grocery retail  with a net sales are of less than 300m2, including petrol stations and 
kiosks  but excluding supermarkets, hypermarkets and discounters . 
10 (49) In addition, t he table s below provide  ekaterra  and its main competitors ’ market 
shares for the production and supply of branded tea in Poland, with a distinction by 
type of tea , for 2020, 2019 and 2018:  
Table 2 – Production and supply of branded tea: distinction by type (2020)  
2020 Black tea  Green tea  Fruit and herbal 
infusions  
Value  Volume  Value  Volume  Value  Volume  
Ekaterra  [50-60]% [50-60]% [20-30]% [10-20]% [10-20]% [5-10]% 
Comp. 1  Mokate:  
[10-20]% Mokate:  
[20-30]% Herbapol:  
[30-40]% Herbapol:  
[30-40]% Herbapol:  
[40-50]% Herbapol:  
[40-50]% 
Comp. 2  Dilmah:  
[5-10]% Dilmah:  
[0-5]% US 
Pharmacia:  
[10-20]% US 
Pharmacia:  
[5-10]% Biofluid: 
[10-20]% Biofluid: 
[10-20]% 
Comp. 3  Ahmad:  
[0-5]% Ahmad:  
[0-5]% Malwa:  
[5-10]% Malwa:  
[5-10]% Malwa:  
[5-10]% Malwa:  
[5-10]% 
Source: An nex 22 
 
Table 3 – Production and supply of branded tea: distinction by type (2019)  
2019 Black tea  Green tea  Fruit and herbal 
infusions  
Value  Volume  Value  Volume  Value  Volume  
Ekaterra  [50-60]% [50-60]% [20-30]% [10-20]% [10-20]% [5-10]% 
Comp. 1  Mokate:  
[10-20]%  Mokate:  
[20-30]%  Herbapol:  
[30-40]% Herbapol:  
[30-40]% Herbapol:  
[30-40]% Herbapol:  
[30-40]% 
Comp. 2  Dilmah:  
[5-10]% Dilmah:  
[0-5]% US 
Pharmacia:  
[10-20]% US 
Pharmacia:  
[5-10]% Biofluid: 
[10-20]% Biofluid: 
[10-20]% 
Comp. 3  Ahmad:  
[0-5]% Ahmad:  
[0-5]% Malwa:  
[5-10]% Malwa:  
[5-10]% Malwa:  
[5-10]% Malwa:  
[5-10]% 
Source: Annex 22 
11 Table 4 – Production and supply of branded tea: distinction by type (2018)  
2018 Black tea  Green tea  Fruit and herbal 
infusions  
Value  Volume  Value  Volume  Value  Volume  
Ekaterra  [60-70]% [50-60]% [20-30]% [10-20]% [10-20]% [10-20]% 
Comp. 1  Mokate:  
[10-20]%  Mokate:  
[10-20]%  Herbapol:  
[30-40]% Herbapol:  
[30-40]% Herbapol:  
[30-40]% Herbapol:  
[30-40]% 
Comp. 2  Dilmah:  
[5-10]% Dilmah:  
[0-5]% US 
Pharmacia:  
[5-10]% US 
Pharmacia:  
[0-5]% Biofluid: 
[10-20]% Biofluid: 
[10-20]% 
Comp. 3  Ahmad:  
[0-5]% Ahmad:  
[0-5]% Malwa:  
[5-10]% Malwa:  
[5-10]% Malwa:  
[5-10]% Malwa:  
[5-10]% 
Source: Annex 22 
(50) These table s show that e katerra is the market leader in branded black tea in Poland 
whilst it has a smaller market position in green or herbal branded tea (where 
Herbapol is the leader).  
(51) The table s below provide ekaterra’s  and its main competitors’ market shares for the 
production and supply of branded tea in Poland, with a distinction by format, for 
2020, 2019 and 2018:  
Table  5 - Production and supply of branded tea: distinction by format (2020)  
2020 Tea bags  Loose -Leaf  
Value  Volume  Value  Volume  
Ekaterra  [40-50]% [40-50]% [10-20]% [20-30]% 
Comp. 1  Herbapol:  
[10-20]% Herbapol:  
[10-20]% Herbapol:  
[10-20]% Herbapol:  
[10-20]% 
Comp. 2  Mokate:  
[5-10]% Mokate:  
[10-20]% Mokate:  
[10-20]% Mokate:  
[10-20]% 
Comp. 3  Dilmah:  
[0-5]% Dilmah:  
[0-5]% Dilmah:  
[5-10]% Dilmah:  
[0-5]% 
Source: Annex 22 
Table 6  - Production and supply of branded tea: distinction by format (2019)  
2019 Tea bags  Loose -Leaf  
Value  Volume  Value  Volume  
Ekaterra  [40-50]% [40-50]% [10-20]% [10-20]% 
Comp. 1  Herbapol:  
[10-20]% Herbapol:  
[10-20]% Herbapol:  
[10-20]% Herbapol:  
[10-20]% 
Comp. 2  Mokate:  
[5-10]% Mokate:  
[10-20]% Mokate:  
[5-10]% Mokate:  
[10-20]% 
Comp. 3  Dilmah:  
[0-5]% Dilmah:  
[0-5]% Dilmah:  
[5-10]% Dilmah:  
[0-5]% 
Source: Annex 22 
12 Table 7 - Production and supply of branded tea: distinction by format (2018)  
2018 Tea bags  Loose -Leaf  
Value  Volume  Value  Volume  
Ekaterra  [40-50]% [40-50]% [10-20]% [20-30]% 
Comp. 1  Herbapol:  
[10-20]% Herbapol:  
[10-20]% Herbapol:  
[10-20]% Herbapol:  
[10-20]% 
Comp. 2  Mokate:  
[5-10]% Mokate:  
[10-20]% Mokate:  
[5-10]% Mokate:  
[10-20]% 
Comp. 3  Dilmah:  
[0-5]% Dilmah:  
[0-5]% Dilmah:  
[5-10]% Dilmah:  
[0-5]% 
Source: Annex 22 
(52) These table s show that ekaterra is the market leader in branded tea bags in Poland 
whilst it has a significantly smaller position in loose tea. These market shares have 
remained  stable in the last three years.  
5.2.2. Input foreclosure  
5.2.2.1. Ability  
(53) The results of the market investigation indicate  that CVC may  have the ability to 
foreclose Zabka’s  competitors post -Transaction.  
(54) First, ekaterra’s market share s for the supply of branded black tea ([50-60]%) and 
branded tea bags ([40-50]%) in Poland suggest that ekaterra has a significant 
degree of market power on the se segment s.42 This is consistent with the responses 
received from retailers who explained that ‘e katerra is strong in black tea’.43 
(55) Second, the results of the market investigation confirm that black tea is an 
important category for Polish modern trade retailers.44 This is confirmed by the 
penetration rate of the tea category in Poland which is close to 100%, which means 
that almost all consumers purchase tea in Poland.45 As for black tea, one retailer 
explained that : ‘Polish consumers  […] have a particular taste for tea and black tea 
in particular. Despite the growing market shares of herbal  and fruit tea in Poland, 
black tea remains the main category. Tea is very popular in Poland and therefore it is an important product category ’.
46  
(56) Third, some of ekaterra’s brands appear to be  must -have brands.47 All retailers  
interrogated indicate d that ekaterra  holds one or several must -stock brands in 
Poland.48 Among the brands listed, Lipton is the most cited brand.49  
                                                 
42  Non-horizontal guidelines, para. 35. 
43  Questionnaire to retailers, non -confidential response to question 10.  
44  Non-horizontal guidelines, para. 34. 
45  Non-confidential minutes of a conference call with a retailer held on 24 March 2022.  
46  Non-confidential minutes of a conference call with a retailer held on 7 April 2022.  
47  Non-Horizonta l Guidelines, para.  34. 
48  Questionnaire to retailers, non -confidential response to question 11.  
49  Questionnaire to retailers, non -confidential response to question 11.1.  
13 (57) In this respect, one retailer explained that ‘Lipton (Yellow Label) is the preferred 
tea brand of Polish consumers ’.50 Another retailer indicated that ‘Lipton and Saga 
are the strongest and the most important brands for tea in Poland’.51 In the same 
vein, according to a third retailer: ‘Lipton is a must -have brand […] as this is the 
leader in the category ’. 52 One other retailer cited Lipton as a must -have brand for 
black tea  in the tea bag category.53 
(58) Fourth, c ompeting brands do not appear to constitute credible alternatives  for 
retailers .54 By way of illustration, one retailer explained that it sells brands from 
competitors of ekaterra but explained that ‘[these brands ] are not as important as 
Lipton and Saga, which are must -have brands. The absence of these brands in 
[Confidential] stores in Poland would in practice be difficult to accept by 
consumers and would most likely cause their irritation’.55 Accordingly , ‘if ekaterra 
were to stop supplying Lipton products  […] this would be harmful as [this retailer] 
would not have credible alternatives  to which it may turn, especially for black 
tea’.56 
(59) In view of the above , the Commission considers that the merged entity may have 
the ability  to foreclose Zabka’s competitors post -Transaction in the plausible 
market for the supply of branded black tea to modern trade retailers  and on the 
plausible market for the supply of tea  bags to modern trade retailers .  
(60) However, a s explained in further detail below, the Commission considers that the 
merged entity will lack the incentive to foreclose these downstream competitors. 
5.2.2.2. Incentive s 
(61) The Commission investigated the incentive s that t he merged entity may have to 
restrict the access of Zabka’s competitors to ekaterra’s brands by cutting their 
supplies or increasing the price charged to these downstream competitors. In this respect, t he market investigation revealed that an input foreclosure strategy is 
unlikely to be profitable for the merged entity because the downstream profits that 
the merged entity would get are unlikely to compensate  the upstream losses that it  
would likely have to incur.
57  
(62) First, the downstream gains for Zabka woul d be limited because only a limited 
number of customers would likely switch to Zabka’s stores . In the first place , the 
market investigation revealed that customers of other convenience stores (e.g. 
Eurocash, Dino and Carrefour) are unlikely to switch to Zabka’s stores  if they no 
longer find ekaterra’s brands in their convenience stores or if the retail price of 
ekaterra’s products in these stores increase s. This is because the category of 
convenience stores targets young customers and impulse purchases such as alcohol, 
                                                 
50  Non-confidential minutes of a conference call with a retailer held on 7 April 202 2. 
51  Non-confidential minutes of a conference call with a retailer held on 24 March 2022.  
52  Non-confidential minutes of a conference call with a retailer held on 30 March 2022.  
53  Questionnaire to retailers, non -confidential response to question 11.1.  
54  Non-horizontal guidelines, para. 36. 
55  Non-confidential minutes of a conference call with a retailer held on 24 March 2022.  
56  Non-confidential minutes of a conference call with a retailer held on 24 March 2022.  
57  Non-horizontal guidelines, para. 40. 
14 cigarettes and snacks.58 As a result, tea does not appear to be a significant driver of 
customer traffic for convenience stores .  
(63) This is also confirmed by data related to tea consumption in convenience stores in 
Poland. Convenience stores only account for 10-25% of the retail sales of tea in 
Poland compared to 30-50% for discounters.59 This is also consistent with the fact 
that Zabka represents only a small portion of ekaterra’s sales in Poland ([0-5]%).60 
(64) As a result, tea does not appear to be  a key  input for convenience stores, which 
means that an input foreclosure strategy with respect to branded tea products is 
unlikely to make customers of other convenience stores switch to Zabka’s stores. 
(65) In the second place , ekaterra’s brands may constitute an  important input for other 
types of stores (i.e. discounters, supermarkets, hypermarkets) and this may be the 
reason why these retailers have expressed some degree of concerns regarding 
access to ekaterra’s products during the market investigation.61 However, these 
other types of stores are not close competitors of Zabka. In this respect, the 
information provided by the Parties in the course of the investigation shows that  
convenience stores are in general smaller than other types of stores  and have  wider 
opening hours  and narrower product ranges .62  
(66) This is also confirmed by the results of the market investigation. One retailer 
explained for instance ‘[r]egarding the assortment of tea products, as Zabka 
operates convenience stores only and such store s do not have a lot of shelf s pace, it 
does not have the same  range of SKUs as its competitors ’.63 
(67) This more limited competition between large retailers and convenience stores with 
regards to the sale of tea is  also consistent with t he data collected in the  course of 
the investigation, which  confirms that the price of branded tea products sold in 
convenience stores is  usually  higher than in discount stores , supermarkets and 
hypermarkets.64 This is further confirmed by the data of Zabka’s and its 
competitors’ promotional activities which show that for a similar percentage 
discount of around [10-20]%, the sales of black branded tea in a discount store 
almost double whereas the sales in a convenience store increase by only  
[10-20]%.65 This shows that customers purchasing tea in convenience stores are 
less price sensitive than customers purchasing tea in discount stores. 
(68) Accordingly, if ekaterra were to foreclose discounters, supermarkets or 
hypermarkets , only a limited number of customers would likely switch to Zabka’s 
stores, which limits the incentive of the merged entity to engage in such strategy.  
This is all the more so in view of Zabka’s limited market share ([5-10]%) for the 
                                                 
58  Non-confidential minutes of a conference call with a retailer held on 7 April 2022.  
59  Questionnaire to retailers, non -confidential response to question 9.  
60  Form CO, para. 193.  
61  Non-confidential minutes of a conference call with a retailer held on 24 March 2022 and 
Questionnaire to retailers, non -confidential response to question 23.1.  
62  Form CO, Annex 29.  
63  Non-confidential minutes of a conference call with a retailer held on 7 April 2022.  
64  Form CO, Annex 34.  
65  Non-confidential minutes of a conference call with a retailer held on 7 April 2022 and response to 
the Commission’s request for information dated 1 April 2022, question 4.  
15 overall retail distribution of consumer goods, including different types of stores  
(i.e. convenience stores, supermarkets, hypermarkets and discounters).66 
(69) Second, ekaterra would risk incurring  significant upstream losses since ekaterra 
would not be able to isolate and discriminate convenience stores, which are 
Zabka’s closest competitors .67 
(70) In the first place , ekaterra’s ability to discriminate convenience stores is limited for 
customers that operate various types of stores (i.e. convenience st ores and other 
types of stores ) such as Carrefour or Auchan. In this respect, the market 
investi gation confirmed that retailers  operating different types of stores  tend to  
purchase tea products all together for all their stores .68 According to the Parties’ 
data, t hese customers represent approximately [10-20]% of ekaterra’s sales in 
Poland .69 
(71) In the second place , for convenience stores supplied by third-party distributors, 
ekaterra has no control on prices and quantities of products sold by intermediary 
distributors in Poland which account for [20-30]% of its sales (i.e. approximately 
the same amount as discounter Biedronka which is the first customer of ekaterra in 
Poland).70 
(72) Accordingly, if the merged entity intends  to discriminate Zabka’s closest 
competitors (e.g. by cutting their supplies of ekaterra’s brands or increasing the 
price of these product s), ekaterra would have to forgo (or risk losing ) [30-40]% of 
its turnover ([10-20]% of turnover corresponding to retailers operating different 
types of stores and [20-30]% to distributors). For the reasons explained above, such losses are unlikely to be recouped downstream as the number of customers switching to Zabka’s stores is likely to be limited.  
(73) This is consistent with the responses received in the course of the investigation  
since  all of ekaterra’s competitors who participated to the investigation explained 
that it would not be financially profitable for ekaterra to restrict the supplies of 
Zabka’s competitors.
71 By the same token, one retailer indicated  that ‘ if ekaterra 
were to give preferential treatment to Zabka, Lipton sales would significantly drop, which would be risky for the merged entity and thus unlikely ’.
72 
(74) In view of the above , it can be concluded that the merged entity will likely lack the 
incentive to foreclose Zabka’s competitors by restricting or cutting their supplies of ekaterra’s  brands or by giving Zabka access to competitively sensitive information 
on their activities.  
5.2.2.3. Impact  
(75) As for the impact of a potential input foreclosure strategy, it can be noted that the 
only retailers who expressed concerns in connection with the Transac tion are 
                                                 
66  Form CO, Tables 4- 7. 
67  Non-Horizontal G uidelines, para.  43 (fn 4).  
68  Non-confidential minutes of a conference call with a retailer held on 30 March 2022.  
69  Form CO, para. 193.  
70  Form CO, para. 124.  
71  Questionnaire to ekaterra’s competitors, non -confidential response to question 19.  
72  Non-confidential minutes of a conference call with a retailer held on 27 April 2022. 
16 discounters.73 In contrast, Zabka’s closest competitors , i.e. competing convenience 
stores,  did not express  input concerns  in this respect .74 Assuming that the merged 
entity would have the ability and incentive to engage in input foreclosure, the 
market investigation thus suggests that such strategy would not have a material 
impact  on the market.  
(76) In any event, there is no need to consider the overall impact of such a strategy as 
the merged entity will lack the incentive to foreclose Zabka’s competit ors for the 
reasons set out above .  
(77) Consequently, the Commission concludes that the Transaction does not give rise to 
serious doubts in relation to input foreclosure concerns , in particular with respect to 
the supply of black tea and tea bags to competing convenience stores . 
5.2.3. Customer foreclosure  
5.2.3.1. Ability  
(78) With respect to customer foreclosure, the limited market share s of Zabka on the 
procurement market (approx. [5-10]%)75 and on the overall market for the retail 
distribution of daily consumer goods ([5-10]%) suggest that Zabka is not a critical 
customer. The existence of a number of competitors downstream, including on the 
segment for convenience stores (e.g. Eurocash, Livio, Chorten, rabat Detal, Chata 
Polska) further suggests that the access of ekaterra’s competitors to retailers in 
Poland will remain largely unaffected by the Transaction. As a result, the merged 
entity will not be able to foreclose ekaterra’s competitors post -Transaction. This is 
consistent with the fact that no participant to the investigat ion expressed customer 
foreclosure concerns. In view of the above and based on the results of the market 
investigation, the Commission concludes that the merged entity will not be able to 
engage in customer foreclosure.  
5.2.3.2. Incentive  
(79) The incentive of the merge d entity to engage in customer foreclosure will also be 
limited given Zabka’s limited market share downstream and the limited impact that 
such strategy would have on ekaterra’s competitors which would keep sufficient 
economic alternatives downstream.76 
(80) Accordingly, the Commission finds that the merged entity will likely lack the 
ability and incentive to engage in customer foreclosure so there is no need to 
consider the impact of any such strategy on the market.  
5.2.4. Conclusion on vertical non- coordinated effe cts 
(81) In light of the considerations above and based on the results of the investigation, 
the Commission concludes that the Transaction does not give rise to serious doubts 
                                                 
73  Non-confidential minutes of a conference call with a retailer held on 24 March 2022 and 
questionnaire to retailers, non -confidential response to question 23.1.  
74  Non-confidential minutes of a conference call with a retailer held on 27 April  2022 and 
questionnaire to retailers, non -confidential response to question 23.1.  
75 Form CO, para. 141 (fn 71).  
76  See section 5.2.3.1. above. 
17 as to its compatibility with the internal market and the EEA agreement with respect 
to vertical non-c oordinated effects between:  
(a) the upstream market s for the production and supply of tea, and in particular 
branded black tea  and tea bags to modern trade retailers in Poland;  
(b) the downstream market for the retail distribution of daily consume r goods , 
and in particular in small format retail stores in Poland.  
6. CONCLUSION  
(82) 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 Agreement .  
For the Commission  
 
 (Signed)  
Margrethe VESTAGER  
Executive Vice -President