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, 28.1.2020  
C(2020 ) 580 final   
PUBLIC VERSION  
 
Compass Group PLC  
2, Guildford Street,  
KT16 9BQ  – Chertsey  
United Kingdom  
Subject : Case M. 9455  – Compass /Fazer Food Services  
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 December 2019 , the European Commission received notification of a pro-
posed concentrat ion pursuant to Article 4 of the Merger Regulation by which Com-
pass Group PLC  (“Compass”)  acquires within the meaning of Article 3(1)(b) of the 
Merger Regulation control of the whole of “Fazer FS” , which is comprised of the 
target companies Fazer Food Serv ices AB, Fazer Food Services OY , Fazer Food 
Services AS, Fazer Food Services A/S and Fazer Food OÜ , by way of purchase of 
                                                 
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 througho ut this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
In the published version of this decision, 
some information has been omitted pursu-
ant 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 infor-
mation omitted has been replaced by ranges 
of figures or a general description.  
 
 
2 shares (the “Transaction”).3 Compass is  designated hereinafter as the “Notifying Par-
ty”, whereas Compass  and Fazer FS  are collectively referred to as the “Parties”.  The 
undertaking that would result from the Transaction is referred  to as “the merged enti-
ty”. 
1. THE PARTIES  
(2) Compass , incorporated in the United Kingdom ( the UK), provid es outsourced food-
services to customers in  the business & industry, healthcare and seniors, education, 
and defence, offshore and remote sectors. It also provides certain support services 
such as facility management and cleaning services, in addition to foodservices and 
concession foodservices in t he sports and leisure sector. Compass is active in around 
45 jurisdictions across the world, in particular in the United States and Europe, 
which account for approximately 55% and 25% of Compass’ total revenue respec-
tively.  Compass  operates the following  brands in the Nordics : Eurest, ESS Support 
Services Worldwide, Chartwells, Medirest, Medirest Signature and Levy.  
(3) Fazer FS is the target business comprised of the following subsidiaries of Fazer 
Food  AB, namely  Fazer Food Services AB  (incorporated  in Sweden ), Fazer Food 
Services OY  (incorporated in Finland) , Fazer Food Services AS  (incorporated in 
Norway) , Fazer Food Services A/S  (incorporated in Denmark)  and Fazer Food OÜ  
(incorporated in Eston ia). Fazer Food AB  (“Fazer Food”) is a subsidiary of the Finn-
ish family -owned company Oy Karl Fazer Ab.  
(4) Fazer FS  provides  catering, restaurant and foodservices in Finland, Sweden, Den-
mark, Norway, and Estonia.  Fazer FS operates the following primary brands and 
product names: Fazer Food & Co, Amica, Tastory, Bistro A, Ateriapalvelut, Hav a 
Java, Wicked Rabbit, and Försvarsrestauranger.  
(5) Fazer Food owns  the target business Fazer FS. Fazer Food currently operates more 
than 1  000 restaurants and employs approximately 7  000 people  across the countries 
it operates in.  
2. THE CON CENTRATION  
(6) On 10 June 2019, Compass and Fazer Food concluded a sale and purchase a gree-
ment pursuant to which Compass , through  its subsidiaries ,4 agreed to acquire all of 
the shares of each of the target companies within Fazer FS . 
(7) At closing, the target companies comprising Fazer FS will become wholly -owned 
subsidiaries of Compass. The Transaction will also include certain IP rights that are 
currently owned by Oy Karl Fazer Ab and Fazer Food.  
(8) In light of the above, the Transaction w ill result in Compass’ acquisition of sole con-
trol over Fazer FS within the meaning of Article 3(1)(b) of the EU Merger Regula-
tion. 
                                                 
3  Publication in the Official Journal of the European Union No C 431, 23.12. 2019 , p. 18. 
4  Compass Group International B.V., Compass Group Sweden AB, Compass Group  Danmark AS and 
Compass Holding Norge AS . 
 
 
3 3. EU DIMENSION  
(9) The Parties  have a combined aggregate world -wide turnover of more than EUR 5 
000 million5 [Compass: EUR 26  264.7 million, Fazer FS: EUR 593.2 million].  Each 
of them has an EU -wide turnover in excess of EUR 250 million  [Compass: EUR 
6 142.9 million, Fazer FS: […] million] . Neither of the Parties achieve s more than 
two-thirds of their aggregate EU -wide turnover withi n one and the same Member 
State. The notified Transaction  therefore has an EU dimension  within the meaning of 
Article 1( 2) of the Merger Regulation .  
4. OVERVIEW  OF THE CONTRACT FOODSERVICES INDUSTRY  
(10) Contract foodservices activities include the supply of ser vices consist ing in  the prep-
aration and/or serving of meals at the premises of business customers . This involves 
purchasing, preparing, cooking and serving food and drink to private and public 
business customers operating in various fields, for whom that service is not the pri-
mary reason for the customer’s presence on the premises  (companies, education in-
stitutions, hospitals, municipalities, etc .).6 
(11) Contract foodservices are typically provided on the customer’s premises, using the 
customer’s equipment, al ong with existing staff.7 Canteen staff are typically trans-
ferred to new foodservices suppliers under EU labour rules, more specifically Di-
rective 2001/23/EC, which regulates the issue of the protection of workers’ rights 
when a workplace is transferred fr om one employer to another.8 Suppliers typically 
have training and development programmes in place in order to ensure that new and 
existing canteen staff, including managers, chefs and servicing staff, are continually 
trained to a high standard.9 
(12) In order to provide contract foodservices, the supplier must purchase food products 
as well as other related non -food products such as tableware, cookware, cleaning 
supplies, uniforms, etc.10 The on -site kitchen facility services are , however , generally 
provided by the customer on their premises, which the new contract foodservices 
supplier takes over from  the previous contract foodservices supplier.11  
(13) The supplier typically p resent s a menu to the customer, which is often done by 
employing a small central culinary te am at national level, which typically consists of 
trained chefs, nutritionists and other food professionals to assist in the developing of 
recipes that can be made available to chefs operating in the individual units. These 
                                                 
5  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
6  Form CO, para. 116.  
7  Form CO, para. 1054.  
8  Form CO, para. 1070; Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws 
of the Mem ber States relating to the safeguarding of employees’ rights in the event of transfers of under-
takings, businesses or parts of undertakings or businesses, OJ L 82, 22.3.2001, p.16 -20. The United King-
dom has implemented the European Union Transfer of Undert akings Directive 2001/23/EC in UK law 
through The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246), col-
loquially known as “TUPE”.  
9  Form CO, para. 929.  
10  Form CO, para. 904.  
11  Form CO, para. 1054.  
 
 
4 staff members are then responsib le for the development of menus and recipes, food 
concepts and also the training of staff at the premises.12  
(14) In the foodservices business, foodservices are sometimes provided together with 
other facilities maintenance services, such as cleaning, reception and maintenance 
services, facility management and other support services, in a multi -service contract. 
Such multi -service providers enable the customer to engage with one sole supplier, 
which can prove to be more convenient. Furthermore, the customer can “ mix and 
match” the services to cater their specific needs.13 The Notifying Party argues that  
customers are increasingly focusing on and demanding  for high-quality foodservices 
over multi -service propositions , and choosing smaller providers whose focus is ex-
clusively on the provision of foodservices.14 As such, this enables local competitors 
who are often recognised for their high -quality foodservices to differentiate them-
selves from the multinational and multi -service providing companies, thereby win-
ning bids as the preferred provider of foodservices.  Indeed, the results of the Com-
mission’s market investigation show a tendency  towards customers prioritising high -
quality, local and/or organic food over low -cost food offering as well as over multi -
service solutions, where food is provided together with ot her services such as clean-
ing.15  
(15) Most of the contract foodservices are procured through calls for tender, both by pub-
lic bodies and private companies. The market for contract foodservices is a bidding 
marketplace, where competitors are invited to bid for t enders in order to win a con-
tract with a customer.16 The majority of customers procure contract foodservices 
through tenders either as a food -only contract or as part of a multi -service contract.17 
Tenders are structured according to the wishes and requireme nts of the customer 
tendering.18 While some contract renewals are done on a bilateral basis, the customer 
would almost always have the possibility to open a foodservice s contract for re-
tendering if unsatisfied with the terms offered by the existing supplier .19  
(16) Contract foodservices contracts in all segments in Sweden, Finland, Norway and 
Denmark typically have an average term of three to five years.20 Some contracts in-
clude specific provisions for the possibility of extension for an additional period by 
agree ment.21 Public tender contracts for contract foodservices are subject to a maxi-
mum term under the EU public procurement rules.  
(17) The contract foodservices market is characterised by the presence of a large number 
of multi -national, national and local rival s uppliers and the market is thus featured by 
                                                 
12  Form CO, para. 909.  
13  Form CO, para. 1036.  
14  Form CO, para. 121. 
15  Replies to  Q1 – Questionnaire to Competitors in Sweden, questions 22, 27, 32, 37 and 40; Replies to Q2 – 
Questionnaire to Competitors in Finland, question 20; Replies to Q3 – Questionnaire to Competitors i n 
Norway, question 20; Replies to Q4 – Questionnaire to Competitors in Denmark, questions 21, 26 and 31.  
16  Form CO, para. 283.  
17  Form CO, para. 949.  
18  Form CO, para. 950.  
19  Form CO, para. 949. 
20  Form CO, para. 281; Notifying Party’s reply to RFI 17 of 24 January 2020.  
21  Form CO, para. 919.  
 
 
5 both small and large players.22 The contract  foodservices business in Sweden, Den-
mark, Norway and Finland is highly diverse and includes over 35 competitors with a 
variety of different supply models and customer s egments.23  
5. THE PARTIES ’ BUSINESS MODEL  
5.1. Compass  
(18) Compass is a multinational, global company with strong food and support service 
credentials. Compass offers services in the Nordic countries , its largest market  being  
Norway, followed by Denmark.24 
(19) Compass is a multi -service s provider . In addition to foodservices,  Compass  also of-
fers services , such as cleaning, facility management and other support services ca-
tered to the individual customer’s needs. This includes, for example, cleaning in 
hospitals, reception and maintenance services at corporate headquarters and manag-
ing remote camps, grounds and facilities services in schools and universities.25 Such 
services are compl ementary to contract foodservices, in the sense that some custom-
ers tender out their needs fo r contract foodservices together with other services.  
(20) According to the Notifying Party,  [Notifying Party’s internal business strategy] , con-
trary to Fazer FS.26 Therefore, Compass submits that the  Transaction will enable it to 
enhance its Nordic business an d profile in the region, which is less well -established 
than in other European countries.27 Compass also explained that it expects that the 
Transaction will enable it to strengthen its core foodservices offering and [Notifying 
Party’s internal business stra tegy] .28 The Notifying Party believes that the combina-
tion of Compass and Fazer FS will enable them to offer customers in the Nordic re-
gion a wider  and more innovative choice of products and services at attractive pric-
es.29  
5.2. Fazer F S  
(21) Fazer FS started in 1891  as a restaurant business in Helsinki and built its name in the 
confectionary business, producing some of the most well -known sweets and choco-
lates from Finland. In the contract foodservices market, Fazer FS has a reputation for 
“its focus on food exce llence ”.30 Fazer FS’ largest market is Finland, followed by 
Sweden.31  
(22) Contrary to Compass, Fazer FS is not a multi -service provider and typically does not 
provide additional services , such as cleaning or facility management. Fazer FS only 
                                                 
22  Form CO, para. 35.  
23  Form CO, para. 33.  
24  Form CO, section 4.  
25  Form CO, para. 1036.  
26  Form CO, para. 9.  
27  Form CO, para. 7.  
28  Form CO, para. 11.  
29  Form CO, para. 9.  
30  Form CO, para. 1039.  
31  Form CO,  section 4. 
 
 
6 occasionally compe tes for multi -service contracts with a partner, as its focus is on 
the provision of foodservices.32  
6. MARKET DEFINITION   
6.1. Introduction  
(23) Both Compass and Fazer FS provide contract foodservices to customers in Sweden, 
Finland, Norway and Denmark.33 
(24) As shown in Table 1, the Parties ’ activities overlap in  the provision of (i)  contract 
foodservices to customers active in the business & industry, education, healthcare & 
welfare , and defence sectors  in Sweden; (ii)  contract foodservices only to customers 
active in the business & industry sector  in Finland and Norway ; (iii)  contract food-
services to customers active in the business & industry and education sectors  in 
Denmark . 
Table 1. The Parties’ activities per segment in each relevant country  
 Segment  
Country  Business & in-
dustry  Education  Healthcare & 
welfare  Defence  
Sweden  ✓ ✓ ✓ ✓ 
Finland  ✓ no overlap  
(only Fazer FS 
active)  no overlap  
(only Fazer FS 
active)  no overlap  
(only Fazer FS 
active)  
Norway34 ✓ no overlap  
(only Compass 
active)  no overlap  
(only Compass 
active)  no overlap  
(only Compass 
active)  
Denmark  ✓ ✓ none of the Par-
ties are active  no overlap  
(only Compass 
active)  
Source: Form CO and the Parties’ submission “Introduction to Contract Foodservices” of 19 No-
vember 2019, slide 19.  
6.2. Relevant market: c ontract foodservices  
(25) In this Section, and for the purpose of this Decision, the relevant markets for contract 
foodservices are defined.  
                                                 
32  Form CO, para. 520.  
33  Fazer FS comprises also Fazer Food OÜ , incorporated in Estoni a. The Parties do not have overlapping 
activities in Estonia.  
34  For completeness, Fazer FS has only de minimis  activities in Nor wegian healthcare & welfare, and educa-
tion. 
 
 
7 6.2.1.  Product  market definition  
6.2.1.1.  Distinction between contract foodservices and concession foodservices  
(26) The Parties are both active in the foodservices industry. In addition to contract food-
services  supplied  to customers that are active in various sectors, both of the Pa rties 
are also active, to a more limited extent, in concession foodservices  for various re-
tail-related locations and sports venues.35 
The Commission’s past practice  
(27) In its prior decisional practice, the Commission has defined a separate market for 
contract foodservices, which consists of the provision of foodservice s outside the 
home performed by third parties, typically on the premises of public or private sector 
customers  and involving the supply of food and drink to customers for whom that 
service is not the primary reason for their presence on the premises .36 This is in con-
trast to concession foodservices, which concern the provision of foodservices to the 
public in travel locations such as airports, railway stations,  ferries, roadsides as well 
as retail related locations such as department stores, sports stadia and leisure ven-
ues.37  
The Notifying Party’s view  
(28) The Notifying Party  does not dispute the market definitions provided in the Com-
mission’s precedents and consid ers that the precise market definition s for contract 
foodservices and concession foodservices  can be left open .38  
The Commission’s assessment  
(29) The market investigation has not produced evidence indicating that the Commission 
should depart from its prior dec isional practice defining separate markets for contract 
foodservices and concession foodservices.  
Conclusion  
(30) In line with the Commission’s precedents  and in light of the results of the market 
investigation , the Commission concludes that,  for the purpose of this Decision, con-
tract foodservices and concession foodservices should be  defined  as separate product 
market s. 
(31) Considering that the Parties’ activities in the market for concession foodservices do 
not give rise to any affected market s, this market will not be discussed any further in 
this Decision.39 
                                                 
35  Form CO, paras. 227 -230. 
36  Case M.2977 – Compass/Onama SpA , paras. 13 -15; Case M.2373 – Compass/Selecta , para. 12. See also 
Case  M.4202 – Charterhouse/Elior , para. 9.  
37  Case M.2977 – Compass/Onama  SpA, para.  12; Case  M.4202 – Charterhouse/Elior , para. 10.  
38  Form CO, paras. 117, 139 and 227. 
39  Based on the Notifying Party’s submission, the Parties’ activities in concession foodservices only overlap 
in Sweden with a combined share of [0 -5]% in terms of number s of sites and [0 -5]% in terms of annual 
visitors. See Form CO, para. 226 et seq . 
 
 
8 6.2.1.2.  Segmentation by customer industry  
(32) Contract foodservices are typically provided to customers that are active in a variety 
of sectors, such as in general business industry (e.g. office or fact ory canteens), 
healthcare (e.g. patient meals), education (canteens at schools, universities and other 
tertiary education institutions), defence (e.g. canteens for military establishments) 
and other sectors.  
The Notifying Party’s view  
(33) In the view of the No tifying Party, any segmentation of the market for contract  food-
services  by customer ’s industry  is not appropriate for the following reasons. First, 
there would be  a high level of supply -side substitutability between the supply of con-
tract foodservices to customers in all types of sectors, including business & industry, 
education, healthcare  & welfare , and defen ce. Second,  customers in different indus-
tries would predominantly share the same demand requirements, that is to say  an op-
erator to cook and serve m eals in their canteens.40 Third, there would be  no signifi-
cant contractual characteristics that differ depending on the characteristics of cus-
tomers ( that is to say  whether it is a customer active in the business & industry sector 
or the education  sector ) and no particular contractual form which is specific to a type 
of customer.41  
(34) The Notifying Party however concedes that there exist certain “differentiating fac-
tors” between th ose segments , which are reflected in each of the Parties’ decision to 
be present in some segments , but not in others.42  
(35) Even though  the Notifying Party considers that  it is not necessary for the Commis-
sion to reach a conclusion on the precise relevant product market definition in this 
case, as the Transaction will not raise serious doubts as to its compatibility with the 
internal market  under any plausible segment ation ,43 it, nonetheless, provided the 
Commission with the necessary information to assess the effects of the Trans action 
on the basis of customer ’s sector.  
The Commission’s past practice  
(36) In previous decisions, the Commission considered whether the market for contract 
foodservices should be further segmented according to the sectors in which the cus-
tomers of contract foodservices are active , namely  into (i) business & industry  (staff 
canteens in both public and private sector s), (ii) healthcare (hospitals, nursing 
homes), and (iii) education (schools, universities), and (iv) defence and  other.44  
(37) More particularly, in Granada/Compass , the Commission noted that certain demand -
side differences existed between the relevant sector s in terms of  the margins earned, 
growth projections and penetration rates.45 In Avenance Italy/Gemeaz Cusin , the 
                                                 
40  From CO, paras. 145 -146 and 153.  
41  From CO, paras. 146 and 150.  
42  Form CO, paras. 155 et seq . and 179.  
43  Form CO, paras. 117 and 139.  
44  Case M.7232 – Charterhouse/Nuova Castelli , para. 17; Case M.6513 – Avenance Italy/Gemeaz Cusin , 
paras. 9 -11; Case M.1972 – Granada/Compass , paras. 9 -10.  
45  Case M.1972 – Granada/Compass , para. 10.  
 
 
9 Commission’s market investigation showed that s egmentation  on the basis of the 
customer’s activities  could be relevan t since each type of customer had its own spec-
ificities , meaning  that foodservices provided in a nursing home are not the same as 
those provided to the military.46  
(38) However, the Commission has not reach ed in the past  a definite co nclusion on the 
possibility to segment the contract foodservices on the basis of customer’s sector  and 
ultimately left the question open.47 
The Commission’s  assessment  
(39) The market investigation in the present case  delivered  mixed results. In some in-
stances, it was confirmed that segmentation on the basis of customer’s activities 
might be  relevant. For example, s ome of the competitors having responded  to the 
market investigation explain ed that supply of contract foodservices to customers in 
one sector cannot always  be “easily replicated for customers in another sector ”48 
and gave examples of customers in the healthcare and education  sectors which re-
quire “ a different menu including nutrition -value calculations ” that typically are not 
required by customers active in the business & industry segment.49 Moreover, some 
of the competitors also note d that “commercial models differ a lot from segment to 
segment ”,50 including “ different levels of profit ability ”.51 For example, business & 
industry contracts would be dominated by ‘cost -plus’ model52 and to a lesser degree 
‘fixed -cost’ model,53 whereas other sectors would often operate “ on dramatically dif-
ferent terms .”54 For this reason, contract foodservices suppliers wishing to enter a 
new product segment might face entry barriers in relation to  different regulatory re-
quirements, production resources, need for differently trained personnel and other 
know -how and competences.55  
(40) Some of the customers also expre ssed their view that due to the particular needs of 
dietary restrictions of the end customers, “ a high knowledge of dietary recommenda-
tions is required (sic) ” for customers active in the healthcare sector.56 Another cus-
tomer active in the education sector explain ed that “ it requires a lot of expertise to 
                                                 
46  Case M.6513 – Avenance Italy/Gemeaz Cusin , para. 10.  
47  Case M.7232 – Charterhouse/Nuova Castelli , para. 20; Case M.6513 – Avenance Italy/Gemeaz Cusin , 
para. 12; Case M.1972 – Granada/Compass , para. 11.  
48  Replies to Q4  – Questio nnaire to Competitors in Denmark, question 8.1.  
49  Replies to Q1  – Questio nnaire to Competitors in Sweden, questions 8.1 and 9.  
50  Replies to Q4  – Questio nnaire to Competitors in Denmark, question 8.1.  
51  Replies to Q2  – Questio nnaire to Competitors in Finland, question 8.1.  
52  In a cost -plus contract, the supplier provides an estimated budget and operates the service according to it. 
The customer pays any excess and benefits from any savings. The supplier is remunerated on a fee basis 
(i.e. on top of the input costs the customer  pays). The customer typically specifies the type of pricing 
model in the tender process. See the Notifying Party’s explanation provided in Form CO, para. 916.  
53  In a fixed -cost (also known as ‘fixed -price’) contract, the supplier prepares an annual budge t including all 
known variables, from which a fixed weekly or monthly subsidy is derived. The supplier is responsible for 
any excess and as a result the margin is higher to reflect the additional risk the supplier undertakes. The 
customer typically specifi es the type of pricing model in the tender process. See the Notifying Party’s ex-
planation provided in Form CO, para. 916.  
54  Replies to Q4  – Questio nnaire to Competitors in Denmark, question 8.1.  
55  Replies to Q3  – Questio nnaire to Competitors in Norway, q uestions 8.1 and 9; Replies to Q2  – Questio n-
naire to Competitors in Finland, question 8.1.  
56  Replies to Q5 – Questionnaire to Customers in Sweden, question 9.1.  
 
 
10 handle foodservices at a university with all the different services require d and the 
different segment of customers, meetings and events ”.57 
(41) On the other hand, a large  number of  customers  and, to a smaller e xtent, competitors , 
noted that the provision of contract foodservices requires “ pretty much the same 
types of resources and delivery regardless of [the] sector. The same standards and 
HSE58 requirements within all sectors ”.59 Indeed, the majority of customer s were of 
the view that the supply of contract foodservices to customers in different sectors in 
terms of price, quality and services does not differ materially.60 Certain  competitors 
also responded that , in their view, the supply of contract foodservices t o customers 
active in different sectors is interchangeable.61 
Conclusion  
(42) In line with the Commission’s precedents  and considering that the results of the 
Commission’s market investigation were  mixed , the Commission concludes that, for 
the purpose of this Decision, the  question whether the market for contract foodser-
vices should be segmented  on the basis of customer’s sector can in principle be left 
open.  
(43) However , considering that the Parties only overlap  in specific sectors , in the compet-
itive assessment in Section 7 the Commission will assess the likely effects of the 
Transaction on the narrowest plausible relevant product market  segments , that is to 
say on each identifi able relevant  sector , namely the sectors in which customers oper-
ate, including (i) business & industry  (staff canteens in both private and public  sec-
tors), (ii) education, (iii) healthcare  & welfare, and (iv) defence.  
6.2.1.3.  Distinction between contract foodservices and other food-related services  
(44) Depending on the nature of the customer’s busin ess, the provision of contract food-
services on customer premises in many instances include s not only food served at 
the canteen (for example, breakfast and/or lunch), but also other  food-related ser-
vices such as, for example, catering for business meetings , kiosk and café services, 
snacks, fruit baskets, etc.  
The Notifying Party’s view  
(45) The Notifying Party  submits that , based on its  experience, kiosks,  cafés and catering 
for business meetings /hospitality  in almost all relevant product market segments  as 
defined above  are typically  tendered together with the primary foodservices contract 
and that the provision of such services typically does not require different expertise, 
                                                 
57  Replies to Q8 – Questionnaire to Customers in Denmark, question 9.1.  
58  HSE refers to healt h/hygiene and safety requirements.  
59  Replies to Q3  – Questio nnaire to Competitors in Norway, question 9. See also Replies to Q1  – Questio n-
naire to Competitors in Sweden, question 8.1 noting that “ processes are very similar ” and that in essence 
food is “ manufactured from the same materials ” and Replies to Q4  – Questio nnaire to Competitors in 
Denmark, question 9, explaining that “ there [is] no particular variety of needs from sector to sector ”. 
60  Replies to Q5 – Questionnaire to Customers in Sweden, question 9; Replies to Q6 – Questionnaire to 
Customers in Finland, question 8; Replies to Q7 – Questionnaire to Customers in Norway, question 8; 
Replies to Q8 – Questionnaire to Customers in Denmark, question 9.  
61  Replies to Q3  – Questio nnaire to Competitors in Norway, question 8; Replies to Q1  – Questio nnaire to 
Competitors in Sweden, question 8; Replies to Q2  – Questio nnaire to Competitors in Finland, question 8.  
 
 
11 staff or facilities .62 According to the Notifying Party, w ith some exceptions,63 cus-
tomers would overwhelmingly choose to tender their contract foodservices and busi-
ness meeting catering together  and suppliers of such services would mainly be the 
same companies that also offer contract foodservices.64  
(46) The Notifying Party further submi ts that  the Parties do not account for business 
meeting catering separately in terms of restaurant/unit profitability.65 The same is 
true for the Parties’ revenues from kiosk and café services.66 Therefore, the Commis-
sion should assess the putative market fo r contract foodservices, which comprises  
canteen services and the related food services , including catering for business meet-
ings, kiosk and café services.67 
The Commission’s past practice   
(47) In previous decisions, the Commission did not specifically address the question of 
what type of food -related services should be included in the scope of the contract 
foodservices.68  
The Commission’s asse ssment  
(48) The results of the market investigation, to a large extent, confirm ed the submission 
of the Notifying Party. The majority of customers having responded  to the market 
investigation confirmed  that they demand catering for business meetings , and kiosk 
and café services in combination with contract foodservices (i.e. canteens) as op-
posed to stand alone or separate se rvice.69 One customer stated  that it “[m]akes 
commercially sense to include [business meeting catering  and café/kiosk services ] in 
the same agreement ”70, and another explained  that the combination of services al-
lows for an easier administration of the contrac t.71 However, the Commission’s mar-
ket investigation also suggests that on the demand side, the final decision on whether 
the contract is entered for all food service -related needs or only for canteen services 
depends on negotiations and how favourable is th e price offered by the contract 
foodservices supplier.72 
                                                 
62  Form CO, paras. 177, 191, 193 and 195 -204. Fo r completeness, the Notifying Party submits that the Par-
ties are aware of customers that do not tender food -related services with contract foodservices, however, 
these are exceptions to this general rule. See Form CO, para. 191.  
63  See, for example, Form C O, para. 192.  
64 Form CO, para. 177. See also Form CO, footnote 143.  
  Form CO, paras. 177, 184 and 192 -193. 
65  Form CO, paras. 177 and 207.  
66  Form CO, paras. 207 -209. In addition, according to the Notifying Party,  both Parties focus on contracts 
where kio sk and café services form part of a broader foodservices offering. See Form CO, para. 204.  
67  Form CO, paras. 179 and 207.  
68  See, for example, Case M.6513 – Avenance Italy/Gemeaz Cusin , para. 9; Case M.2373 – Com-
pass/Select a, para. 10. These decisions only mention that as part of contract foodservices, the food is often 
sold to end customer s at subsidised prices . 
69  Replies to Q8  – Questio nnaire to Customers in Denmark, questions 7, 7.1 and 7.3; Replies to Q5  – Ques-
tionnaire t o Customers in Sweden, questions 7.1, 7.3, 8 and 8.1.  
70  Replies to Q8  – Questio nnaire to Competitors in Denmark, questions 7.1.1 and 7.3.1.  
71  Replies to Q8  – Questio nnaire to Competitors in Denmark, questions 7.1.1 and 7.3.1.  
72  Replies to Q8  – Questio nnaire to Competitors in Denmark, questions 7.1.1 and 7.3.1.  
 
 
12 (49) A majority of competitors having respond ed to the market investigation indicated 
that they do not offer kiosk and café services as a separate, stand -alone service (i.e. 
without a contract foodservices  contract).73 The same is true in the case of catering 
for business meetings, as most of competitors indicated  that they typically provide 
hospitality/catering for meetings as part of a wider contract foodservices offering.74 
Conclusion  
(50) For the reasons set o ut in this Section, including in light of the results of the market 
investigation  and of all the evidence available to it , the Commission concludes that, 
for the purpose of this Decision, the relevant market is the market for  contract food-
services  includin g catering for business meetings as well as kiosk and café services.  
6.2.1.4.  Distinction between contract foodservices and vending services  
(51) Vending services are the sale of products and services at an unattended point of sale 
using some form of payment system. V ending machines can be used to provide a 
large range of products, such as drinks, food, snacks and other.  
The Notifying Party’s view  
(52) The Notifying Party  submits that the Parties offer only limited vending services in 
the countries in which they are both ac tive and that vending services are almost ex-
clusively provided as part of the Parties’ foodservices offering rather than as a sepa-
rate stand -alone service.75 Moreover, in practice, the Parties often sub -contract vend-
ing services as part of their contract fo odservices offering to third parties rather than 
carry out such services themselves. The Notifying Party  further submits that in some 
instances, the Parties book any vending -related revenue as contract foodservices or 
catering revenue.76  
(53) In the view of the  Notifying Party, vending services do not constitute a separate 
product market.77 The Notifying Party considers that it is not necessary for the 
Commission to reach a conclusion on the precise relevant product market defini-
tion.78 However, a ccording to the N otifying Party, if the provision of vending ser-
vices were to be assessed as a separate product market, the Transaction would not 
give rise to an affected market as the combined market share of the Parties would be 
well below the 20% threshold in each of Sw eden, Finland, Norway and Denmark.79  
                                                 
73  Replies to Q4 – Questionnaire to Competitors in Denmark, question 6.3; Replies to Q2 – Questionnaire to 
Competitors in Finland, question 6.3; Replies to Q1 – Questionnaire to Competitors in Swed en, question 
6.3. 
74  Replies to Q4 – Questionnaire to Competitors in Denmark, question 6.1; Replies to Q2 – Questionnaire to 
Competitors in Finland, question 6.1; Replies to Q3 – Questionnaire to Competitors in Norway, question 
6.1. 
75  For completeness, Compass and Fazer FS provide stand -alone vending services in Finland and Sweden, 
respectively. However, the provision of any stand -alone vending services are negligible, with less than  
[0-5]% market share for Compass in Finland, and less  than [5 -10]% for Fazer FS in Sweden. See Form 
CO, para s. 238  and 241 -242. 
76  Form CO, paras. 238 and 242.  
77  Notifying Party’s reply to RFI 3 of 1 8 December  2019, question 1 . 
78  Form CO, paras. 117 and 139.  
79  Form CO, paras. 244 and 247.  
 
 
13 The Commission’s past practice   
(54) In a previous case, the Commission held that vending services and contract foodser-
vices constituted separate markets.80 In other decisions, the Commission considered 
whether vending servic es offered by companies that specialise in such services and 
vending services that are offered by foodservices providers as an extension of their 
core services constitute one product market. However, in that case the Commission 
eventually  left the question  open.81  
The Commission’s asse ssment  
(55) The results of the market investigation in the present case show that the majority of 
competitors and customers support the view that vending services are mostly ac-
quired and/or provided as an integrated part of the foodservices contract.82 As indi-
cated by some customers, it is “ the most convenient way ” and “ makes more sense for 
business, and administration ” to have a supplier as a “ one-stop-shop ”.83 Other cus-
tomers explain ed that vending services are provided “ always t ogether with other 
services ”.84 In a similar vein, the responses received from the Parties’ competitors 
point to the similar direction. For example, some competitors explain ed that “vend-
ing machine services are always connected with some other service ”,85 and that they 
“do not offer vending machines as a stand -alone service”.86 Furthermore, one com-
petitor state d that “offering vending machines as a separate standalone service is not 
in line with [the company’s] global strategy”.87  
(56) This is supported by some of the responses received from contract foodservices bro-
kers.88 For example, a broker note d that “ vending machines are often a very small 
and almost non -significant  part of the contract. ”89  
(57) Given this, on balance, the Commission is of the view that vending services are, in 
the majority of cases, provided as part of a package offered in connection with con-
tract foodservices.  
Conclusion  
(58) In light of the above, the Commission concludes that, for the purpose of this Deci-
sion, the market for contract foodservices  include s the supply of  vending services , 
                                                 
80  Case M.2373 – Compass/Select a, para. 23.  
81  Case M.4202 – Charterhouse/Elior, para. 16 ; Case M.8454  – KKR/Pelican Rouge, para. 16. 
82  Replies to Q1 – Questionnaire to Competitors  in Sweden, question 6.2.1; Replies to Q2 – Questionnaire to 
Competitors in Finland, question 6.2.1; Replies to Q3 – Questionnaire to Competitors in Norway, question 
6.2.1; Replies to Q4 – Questionnaire to Competitors in Denmark, question 6.2.1; Replies to Qu estionnaire 
Q5 – Questionnaire to Customers in Sweden, question 7.2.1; Replies to Q6 – Questionnaire to Customers 
in Finland, question 6.2.1; Replies to Q8 – Questionnaire to Customers in Denmark, question 7.2.1.  
83  Replies to Q6 – Questionnaire to Custome rs in Finland, question 6.2.1; Replies to Q8 – Questionnaire to 
Customers in Denmark, question 7.2.1.  
84  Replies to Q8 – Questionnaire to Cust omers in Denmark, question 7.2.1.  
85  Replies to Q2 – Questionnaire to Competitors in Finland, question 6.2.1.  
86  Replies to Q3 – Questionnaire to Competitors in Norway, question 6.2.1.  
87  Replies to Q4 – Questionnaire to Competitors in Denmark, question 6.2.1.  
88  Brokers typically are independent third party/business consultants that assist customers of contract food-
services during all stages of their contract foodservices tender process.  See Replies to Q9 – Questionnaire 
to Brokers , question 1.  
89  Replies to Q9 – Questionnaire to Brokers , question 9.  
 
 
14 because the latter are typically acquired/provided as part of the contract for contract 
foodservices  and accordingly do not constitute a separate product market . 
6.2.1.5.  Distinction between contract foodservices and non-food related other services  
(59) In certain instances, customers that outsource contract foodservices also require oth-
er support service s, or “soft service s”, that are directly used by employees and can 
make the workplace more secure  or pleasant , such as cleaning, reception, plant 
maintenance , handyman, pest control and other.  
The Notifying Party’s view  
(60) The Notifying Party submits  that Fazer FS concentrates solely on foodservices and 
accompanying expertise, while Compass provides foodservices both  by themselves  
and in conjunction with other support  services.90 Consequently, the only overlaps be-
tween the Parties are in the provision of foodservices and not in the multi -service 
agreements (i.e. food and soft service).  For this reason, the Notifying Pa rty’s sub-
mission on the competitive effects of the Transaction covers solely the Parties’ activ-
ities in the provision of contract  foodservices.91 
(61) According to the Notifying Party, the Transaction would not give rise to an affected 
market in a potential mark et for support services (or any potential segment thereof, 
such as cleaning, reception, etc.) as the market share of each Party would be far be-
low 10% in each of Sweden, Finland, Norway and Denmark.   
The Commission’s past practice   
(62) In previous  decisions, t he Commission did not specifically address the question of 
whether non -food related  services (i.e. other support services , such as cleaning, re-
ception  and facility management ) should be assessed as a separate product market  or 
included in the market for contract foodservices . 
 
The Commission’s assessment  
(63) The results of the market investigation  confirm that non -food related other services 
should not be included in the market for contract foodservices. Indeed, the Commis-
sion’s  market investigation shows that a large majority of customers typically tender 
contract foodservices separately from other services.92 As explained by one custom-
er, their experience show s that “ best food is made from suppliers only focusing on 
food.”93  
(64) In light of the results  of the market investigation and of all the evidence available to 
it, the Commission considers  that, even in cases where a contract foodservices sup-
                                                 
90  Form CO, para. 331.  
91  Form CO, para. 32 and footnote 39.  
92  Replies to Q4 – Questionnaire to Customers in Sweden, question 100; Replies to Q8 – Questionnaire to 
Customers in Denmark, questions 62 and 64; Replies to Q6  – Questionnaire to Customers in Finland, 
question 34.  
93  Replies to Q8 – Questionnaire to Customers in Denmark, question 62.1.  
 
 
15 plier has the capability to supply food and other service s, a larger part of their con-
tracts are food -only contracts.94  
Conclusion  
(65) In light of the above, for the purpose of this Decision, the Commission considers that 
the relevant product market includes the food -only foodservices contracts excluding  
non-food related  other services (or other support services) . 
6.2.2.  Geographic market definition  
(66) In previous decision s, the Commission found that the relevant geographic market for 
contract foodservices is national  due to the differences in legislat ion and national 
preferences in terms of quality and pri cing.95  
(67) The Notifying Party does not dispute the Commission’s prior decisional practice .96 
However, it submits that there are instances where contract foodservices suppliers 
active in one Nordic country have been able to launch a new service in another Nor-
dic country.97 
(68) The market investigation in the present case confirms the Commission’s previous 
decisions. It appears that , despite the fact that the Parties and some of their competi-
tors are active in all  or most countries of the Nordic region, competition in the mar-
ket for contract foodservices takes place  at a national level. Indeed, the large majori-
ty of customers and competitors respond ed that tenders for contract foodservices as 
well as supply arrangement s for ingredients are typically entered into at na tional lev-
el.98 The market investigation also confirmed that from the supply side, the competi-
tive conditions of providing contract foodservices to customers in each of Sweden, 
Denmark, Norway and Finland differ significantly.99 Indeed, a competitor active in 
several countries relevant for this investigation explain ed that there are  “different 
cultures, tax, subsidy policy and legislation ”.100 For example, “ the Swedish custom-
ers tend to focus more on organic products and ‘green ’ offerings, w here Norway is a 
bit more conservative […] [in] Denmark [there] is more focus on a more interna-
                                                 
94  Replies to Q1 – Questionnaire to Competitors in Sweden, questions 90 and 96;  Replies to Q2 – Question-
naire to Competitors in Finland, question 41; Replies to Q9 – Questionnaire to Brokers, question 24. It 
should be a lso noted, however, that the market investigation shows that multi -service contracts are more 
typical for larger companies, whereas small and medium -sized companies tend to tender only contract 
foodservices ; see Replies to Q4 – Questionnaire to Competitors  in Denmark, question 62.1 . One competi-
tor explained “[l]arge international companies are clustering food with other services […] [n]ational 
companies are not doing this very frequently ”, see Replies to Q2 – Questionnaire to Competitors in Fin-
land, questio n 41.1. See also Replies to Q9 – Questionnaire to Brokers, question 24.1.  
95  Case M. 2373 – Compass/Selecta , para. 25; Case M.1972 – Granada/Compass , para. 20.  
96  Form CO, paras. 248 and 254.  
97  Form CO, para. 248.  
98  See, for example, Replies to Q2  – Ques tionnaire to C ompetitors in Finland, questions 13 and 14; Replies 
to Q4  – Questionnaire to C ompetitors in Denmark, questions 14 and 15; Replies to Q8  – Questionnaire to 
Customers in Denmark, question 13.  
99  Replies to Q1  – Questionnaire to C ompetitors in Sweden, question 18; Replies to Q2 – Questionnaire to 
Competitors in Finland, question 16; Replies to Q3  – Questionnaire to C ompetitors in Norway, questions 
15 and 16; Replies to Q4  – Questionnaire to C ompetitors in Denmark, question 16.  
100  Replies to Q4  – Questionnaire to C ompetitors in Denmark, question 16.1; Replies to Q1  – Questionnaire 
to Competitors in Sweden, questions 18 and 18.1.  
 
 
16 tional food offering. ”101 A majority of competitors indicate d that  competitive condi-
tions are different from one country to another due to the differences in tax s ystems 
and subsid ies that employers pay towards employees’ lunches.102 Many c ompetitors 
also observe a “different foodculture (sic) ” which requires them to adapt meals to na-
tional preferences.103 
(69) In light of the above and in line with the Commission’s preceden ts, the Commission 
concludes that, for the purpose of this Decision, the geographic market for contract 
foodservices is national  in scope . 
7. COMPETITIVE ASSESSMEN T 
(70) In this section, the Commission assess es the likely effects of the Transaction with 
respect to  the relevant markets or market segments concerned . More specifically, t he 
Commission assess es the likely non -coordinated  effects of the Transaction in the rel-
evant markets or segments in which the Parties’ activities overlap  as to  the provision 
of food co ntractservices (Section 7.1) , as well as the  likely  conglomerate effects of 
the Transaction due to Compass’ diversified activities in other support services  mar-
kets or segments where the Parties ’ activities do not overlap  (Section 7.2).  
7.1. Horizontal assessm ent 
7.1.1.  Legal framework for the competitive assessment  
(71) Effective competition brings benefits to consumers, such as low prices, high quality 
products, a wide selection of goods and services, and innovation. Through its control 
of mergers, the Commission prevent s mergers that would be likely to deprive cus-
tomers of those benefits by significantly increasing the market power of firms.104 
(72) Under Article 2(2) and (3) of the Merger Regulation, the Commission must assess 
whether a proposed concentration would significant ly impede effective competition  
in the internal market or in a substantial part of it, in particular as a result of the crea-
tion or strengthening of a dominant position. The notion of "significant impediment 
to effective competition" must be interpreted as  extending, beyond the concept of 
dominance, to the anticompetitive effects of a concentration resulting from the non -
coordinat ed behaviour s of undertakings which do not have a dominant position on 
the market concerned.105 
(73) As regards its non-coordinated effe cts, a merger presenting  horizontal overlaps  may 
significantly impede effective competition in a market, even if it does not result in 
                                                 
101  Replies to Q1  – Questionnaire to C ompetitors in Sweden, questions 18 and 18.1  
102  See, for example, Replies to Q2 – Questionnaire to Competitors in Finland, question 16.1 and Replies to 
Q3 – Questionnaire to C ompetitors in Norway, questions 16.1.  
103  Replies to Q4  – Questionnaire to C ompetitors in Denmark, questions 19 and 19.1.  
104  Commission Guidelines on the assessment o f horizontal mergers under the Council Regulation on the 
control of concentrations between undertakings (the "Horizontal Merger Guidelines"), OJ C 31, 5.2.2004, 
p. 5, paragraph 8.  
105  Recital 25 of the Merger Regulation.  
 
 
17 the creation or strengthening of a dominant position, by removing important compet-
itive constraints and influencing param eters of competition.106 
(74) The Horizontal Merger Guidelines list a number of factors which may influence 
whether or not significant non -coordinated effects are likely to result from a merger, 
such as the large market shares of the merging firms, the fact that merging firms are 
close competitors, the limited possibilities for customers to access to the services 
provided by the parties and their competitors and the fact that the merger would 
eliminate an important competitive force.  
(75) It is in light of the principl es set out above that the Commission must analyse wheth-
er and to what extent the Transaction may raise serious doubts as to its compatibility 
with the internal market due to its horizontal effects.  
7.1.2.  Overview of the reportable markets  
(76) Table 1 shows that  the Transaction would result in several horizontal overlaps  be-
tween Compass and Fazer FS’s activities in the following countries and segments:  
(a) Sweden: business & industry, education, healthcare & welfare , and defence.  
(b) Denmark: business & industry, and education.  
(c) Norway: business & industry.  
(d) Finland: business & industry.  
(77) The Parties submit that following the Transaction, the merged entity will be con-
strained by a l arge number of multi -national, regional and local players  as showed in 
Figure 1 . 
Figure 1. Significant competition in contract foodservices in the Nordics  
 
Source:  The Parties’ submission “Introduction to Contract Foodservices” of  19 November 2019,  slide 22.  
* Based on the Parties’ tender data of known competitors. These competitors are in addition to the Parties.  
** Based on the Parties’ tender data.  
                                                 
106  Horizontal Merger Guidelines, par agraph 8.  

 
 
18 (78) ISS is a Danish company and is a globally active provider of facilities management 
services, also providing foodservices. In 2018, ISS had a revenue of EUR 9,566 m il-
lion and employed almost 500  000 employees globally .107   
(79) Sodexo is a French company and is also a global provider of facilities management, 
including contract foods ervices. In 2018, Sodexo had a revenue of EUR 20.4 billion 
worldwide and of EUR 659 million in the Nordics. Sodexo employed over 450 000 
employees globally and more than 11  000 employees in the Nordics.108 
(80) Coor is a Swedish company, also providing facilities  management including food-
services. In 2018, Coor generated a revenue of EUR 900 million and employed more 
than 9  000 employees. Sweden is C oor’s largest mark et, where it generated around 
50% of its turnover in 2018.109 
(81) In addition to these large multination al companies acting across all four Nordic 
countries, there are, in each of them, national players. Some of them serve also large 
customers. In addition, smaller regional companies are offering contract foodservices 
in each of the four Nordic countries. Ma rkets are therefore characterised by large, 
medium -sized and many small contract foodservice s providers.  
(82) In Denmark , there are for example Gruppo Camst, Jespers Torvekøkken, Forenede 
Service  and Meyers Kantiner  active. In Sweden, Nordrest and Sabis are act ive in 
providing contract foodservices. In Finland, Antell -Catering and Palmia are active, 
and in Norway, Toma Gruppen and 4Service.  
7.1.3.  Market data  
(83) As already  explained in Section 4, both private and public c ustomers of contract 
foodservices generally tender  out their contracts. For that reason, t he Parties submit 
that market shares would not be an accurate indicator of the competitive conditions 
in the contract foodservices industry, because in bidding markets static market shares 
would only reflect the outc ome of the tenders and would not be very insightful about 
the competitive process itself.  According to the Parties, t he market shares would on-
ly reflect previous wins of contracts, but not the Parties’ nor their competitors’ actual 
strengths or future succ ess rate.110 The Parties therefore consider that it would be 
more important to determine whether a sufficient number of credible bidders will 
remain post -Transaction.111 In addition, the Parties explain ed that, due to the lack of 
any reliable third -party data source, they could not submit market shares with any 
degree of accuracy.112 
(84) The Parties have provided their best estimate of the total number of tenders in each 
segment in 2018, which is shown in Table 2. However, the Parties explain that they 
                                                 
107  Form CO, para. 633. 
108  Form CO, para. 633.  
109  Form CO, para. 633.  
110  Form CO, para. 294  et seq. 
111  Form CO, para. 297.  
112  Form CO, para. 284 et seq . 
 
 
19 only have knowledge of the tenders in which they participated and would not be able 
to estimate how much of the respective market they are unaware of.113   
Table 2. The Parties’ estimate of the total number of tenders in 2016 -2018  
Country  Segment  2016  2017  2018  
Sweden  business & in-
dustry  [50-100] [50-100] [50-100] 
 education  [0-50] [0-50] [0-50] 
 healthcare & 
welfare  [0-50] [0-50] [0-50] 
 defence  1 tender in 2016 (new tender in 2020)  
Denmark  business & in-
dustry  [0-50] [0-50] [0-50] 
 education  [0-50] [0-50] [0-50] 
Finland  business & in-
dustry  [50-100] [50-100] [50-100] 
Norway  business & in-
dustry  [50-100] [100-150] [100-150] 
 Source: Form CO, para. 287 . 
(85) In previous cases in which the Commission assessed transactions in the contract 
foodservices industry, the Commission considered market shares in its analysis.114  
(86) In the present case, the Commission observes that in the Swedish defence sector, the 
Swedish Ministry of Defence tendered out the contract foodservices, split in five 
lots, in 2016. Fazer FS holds four of these five lots.115 The next tender is planned for 
2020.116 The Commission  considers that for the  analys is of the market  for contract 
foodservices to the Swedish defence sector, market shares do not  fully  capture the 
competitive conditions in the market. For the purpose of this Decision, t he Commis-
sion will therefore take account of  the tender data provided by the Parties  in Section 
7.1.4.5  below . 
(87) Concerning the other market segments, the Commission  notes that the Parties’ are 
not certain of how much of the market is not capture d by the information provided  in 
Table 2. The Commission considers that  the total number of tenders  mentioned 
above might be understated and that, therefore, the total number of tenders might be 
higher than stated in the table above.  
                                                 
113  Form CO, para. 287. 
114  See for example Case M.6513 – Avenance Italy/Gemeaz Cusin , paras. 18 et seq.  
115  Form CO, para. 816.  
116  Form CO, paras. 825 and 830 et seq .  
 
 
20 (88) In the case at hand, regarding contract foodservices to business & industry, educa-
tion, healthcare & welfare customers, the Commission considers that, because  of the 
high number of tenders per year, the se contract foodservices market segments  are not 
characterised by infrequent tenders and infrequent demand.  
(89) In light of the above, t he Commission  considers that the Parties’ combined market 
shares by calendar year constitute an appropriate starting point for the Commission’s 
analysis of the markets for contract foodservices to business & industry, education 
and healthcare & welfare customers . 
(90) The Parties provided the Commission with market shares based on the GIRA report , 
a report commissioned by  Fazer FS in 2016  from GIRA Foodservices f or the pur-
pose of exploring  a [information on Fazer FS’s business strategy] (“the GIRA re-
port”) . However, t he Parties claim that the Commission should disregard the market 
shares in the GIRA report. It was argued that the GIRA report has methodological 
issues, in particular because of the “bottom -up” approach of the GIRA report that 
only took into account a small number of larger competitors and excluded smaller 
competitors.117   
(91) In any case, since the market shares in the GIRA report are from  2015  and upon r e-
quest of the Commission , the Parties provide d an estimate of their market shares 
from 2016 to 2018. These market shares are based on the Parties’ turnover in each 
market segment. For the total market size, the Parties have built up on previous work 
by [third party consultant] . The Notifying Party had commissioned [third party con-
sultant]  to estimate the sizes of the contract foodservices markets in the countries in 
which the Notifying Party operates. In the course of the pre-notification  stage , the 
Notifyi ng Party asked [third party consultant]  to focus on Sweden, Denmark, Fin-
land and Norway.118  
(92) [Third party consultant]  estimated the total size of the contract foodservices markets 
by multiplying the estimated number of sold meals with the average price of a meal 
in each market segment and country, using public sources as inputs.119 [Third party 
consultant]  estimated the total market size for 2017. The Parties then applied their 
best estimate of the growth rate for 2016 and 2018 to provide the Commission with 
the total market size in 2016 and 2018.120 Based on the [third party consultant]  da-
taset, which includes canteen services during lunch only, the Parties have provided 
market share data also for all contract foodservices, including ancillary vending.121 
In addition, the Parties sought to verify the assumption s used by [third party consult-
ant].122 The Commission, i n its following assessment, will first present the Parties’ 
market shares based on a market total as estimated by [third party consultant]  for 
each affected market  as the first set of market share data .  
(93) In addition, upon request of the Commission, the Parties provided an estimate of 
their as well their competitors’ market shares in 2018 . This market share estimate is  
based on the Parties’ turnover  in each market segment and their estimate of their 
                                                 
117  See Notifying Party’s r eply to RFI 12 of 14 January 2020, question 7 and Form CO, Annex 7A -002. 
118  Form CO, para. 298. 
119  Form CO, Annex 7A -008. 
120  Form CO, Annex 7A -015. 
121  Form CO, paras. 298 et seq .  
122  Form CO, Annex 7A -007. 
 
 
21 competitors’ turnover based on public sources, such as annual reports. The Parties 
provided these market share estimates calculated with two market totals, based on 
(1) the [third party consultant]  market  total and (2) the market total as determined by 
the total of the Parties’ turnover and their competitors’ turnover.123 The [third party 
consultant]  market total is higher than the market total determined by the total of the 
Parties’ turnover and their know n competitor turnover. In the following assessment, 
to apply a conservative approach, the Commission uses the estimates of the Parties’ 
and their competitors’ market shares calculated based on the total market as deter-
mined by the total of the Parties ’ and their competitors’ turnover  in each market 
segment . These market share estimates are presented as the second set of market 
share data in the analysis of each individual market segment .  
(94) The Commission has verified the reliability of the market share  estimates  provided 
by the Parties  in the course of the market investigation. The result s of th at verifica-
tion will be addressed in the assessment of each individual market segment.  
7.1.4.  Sweden  
7.1.4.1.  Overview o f the contract foodservices  industry  in Sweden  
(95) In addit ion to the multi -national companies ISS, Sodexo and Coor  referred to in par-
agraph (78) and following  above , several national companies are active in one or 
more mark et segments  for the provision of contract foodservices in Sweden, for in-
stance , the larger national suppliers Nordrest and Sabis.  
(96) Nordrest is a Swedish company founded in 2013. It provides contract foodservices in 
the business & industry, education and hea lthcare & welfare segments. It employs 
around 500 employees with an annual turnover of around EUR 74.5 million.124  
(97) Sabis is a Stockholm -based, family -owned company, providing contract foodser-
vices as well as operating more than 20 restaurants and a number o f cafés, hotels and 
food stores. 125 
7.1.4.2.  Contract foodservices to business & industry customers in Sweden  
(98) Table 3  presents the Parties’ estimate of their market shares in 2018 , 2017, 2016  in 
the supply of contract foodservices to business & industry customers in Sweden 
based on the Parties’ turnover and the estimation of the total market size by [third 
party consultant]  as explained above.  
 
 
 
                                                 
123  See Notifying Party’s reply to RFI 12 of 14 January 2020 and Notifying Party’s reply to RFI 13 of 20 
January 2020.  
124  Form CO, para s. 633, 651, 670, 701, 716, 758, 779, 791, and  805. 
125  Form CO, par a. 670. 
 
 
22 Table 3. The Parties’ market shares in supply of contract foodservices to b usiness & 
industry customers in Sweden in 2018 , 2017 and 2016  ([third party consultant] ) 
 
 2018  2017  2016  
 Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  
Compass  […] [5-10]% […] [5-10]% […] [5-10]% 
Fazer FS  […] [10-20]% […] [10-20]% […] [10-20]% 
Combined  […] [10-20]% […] [10-20]% […] [20-30]% 
Total 
market  […] 100%  […] 100%  […] 100%  
 Source: Form CO, para. 620 . 
(99) The Parties verified the assumptions used in the [third party consultant]  model and 
concluded that the average price per meal might be overstated. When using the Par-
ties’ price data instead of the [third party consultant]  estimates, the Parties ’ com-
bined market  share  would increase to [20-30]%.126  
(100)  Table 4  present s the Parties’ estimate of their market shares in 2018 in the supply of 
contract foodservices to business & industry customers in Sweden based on (i) the 
Parties’ turnover, (ii) the Parties’ estimate of their know n competitors’ turnover 
based on public sour ces and (iii) the total market size calculated as the total of the 
Parties’ own turnover  and the estimated know n competitors ’ turnover.127 
Table 4. The Parties’ market shares in supply of contract foodservices to business & 
industry c ustomers in Sweden in 2018  (estimated competitor turnover)  
 
 Market shares estimated in 2018  
Compass  [20-30]% 
Fazer  [20-30]% 
Parties combined  [40-50]% 
Sodexo  [20-30]% 
ISS [5-10]% 
Coor  [5-10]% 
Nordrest  [10-20]% 
Sabis  [5-10]% 
12 other competitors with an estimated 
market share of up to 2% each  [5-10]% 
Source: Notifying Party’s reply to RFI 12 of 14 January 2020 . 
                                                 
126  Form CO, Annex 7A -007, Table 1.  
127  See Notifying Party’s reply  to RFI 12 of 14 January 2020.  
 
 
23 (101)  The total market  size used to estimate these market shares was around EUR […] 
million, whereas the total market siz e as estimate d by the [third party consultant]  
model was around EUR […] million. T he Commission therefore acknowledges that 
the market share estimates provided by the Parties based on competitors ’ revenues  
might be overstated .  
(102)  In the course of the market investigation, the Commission has verified the market 
share estimates of the Parties. To do this, the Commission has contacted the majority 
of significant  competitors who won tenders in which  one of the Parties  participated . 
The verification  confirms the broader picture of the Parties’ position as the market 
leader with a clear differenc e over the next in line competitor s.128  
(103)  The Notifying Party submits  that following  the Transaction, the merged entity will 
continue to be constrai ned by a number of significant competitors, including  Sodexo, 
ISS, Coor, Nordrest and Sabis . Moreover, according to the Notifying Party, the 
merged entity will continue to face competition from  a large number of smaller, lo-
cal competitors.129 In addition, ba rriers to entry and expansion would be low and 
there would be strong constraints on the merged entity through buyer power as well 
as out -of-market constraints, such as restaurants.130 
(104)  Despite the somewhat high combined market shares of the Parties post -Trans action, 
and the clear lead over the next in lin e competitors, the Commission considers that 
the Transaction is unlikely to raise serious doubts as to its compatibility with the in-
ternal market due to the following reasons.  
(105)  First, as shown by the market investigation and demonstrated in Table 4 above, the 
Swedish market for contract foodservices to business & industry customers is fea-
tured not only by large multi -national players such as Coor, ISS, Sodexo, but also by 
nationa l foodservice s suppliers like Nordrest and Sabis Invest AB as well as a num-
ber of smaller or local players like Heat.131 Demonstrative of this point is the fact 
that the Parties’ tender data includes over [10-20] competitors, [information on the 
Parties’ bid ding data ].132 The large number of smaller suppliers is also capable of 
serving larger customers. For example , in 2017 and 2018 , local competitor s won [in-
formation on the Parties’ bidding results ],133 [information on the Parties’ bidding re-
sults].134 As demonstr ated by the Parties’ tender data, these tenders are substantial ly 
based on the value of the tender. For example, the average value of a tender lost by 
the Notifying Party  between 2014 and 2018 was around EUR [information on the 
Parties’ bidding results ].135  
                                                 
128  Replies to Q1 – Questionnaire to Com petitors in Sweden, question 21.  
129  Form CO, p aras. 666 et seq.  
130  Form CO, paras. 676 et seq . 
131  Heat entered the market for contract foodservices in 2008 and has recently expanded, for example, it won 
the tender by the Swedish Police Authority in 2019, see Form CO, para. 681. 
132  Form CO, paras. 650 et seq.  
133  Form CO, para. 674.  
134  Form CO, para . 673. 
135  Own calculation based on Form CO, paras. 651 et seq . The average value of a tender lost by the Notifying 
Party between 2014 and 2018 was around [information on the Parties’ bidding results ] EUR if [infor-
mation on the Parties’ bidding results ], see Form CO, para.653.  
 
 
24 (106)  Furthermore, evidence collected during the market investigation shows that in select-
ing their contract foodservice s providers via tender processes, Swedish business & 
industry customers  do not give preference to the historical relationship with the con-
tract foodservice s supplier. Customers  give preference to  quality of the food, the 
price of the food and efficient day -to-day operations.136 Contract foodservice s sup-
pliers try to differentiate from each other to win tenders on these parameters.137 
Moreover , the result s of the market investigation show that both competitors and 
customers see as the most important trends in the contract foodservices in Sweden in 
the next three years the following: (i) customers prefer high -quality food over low -
cost food offe ring; (ii) customer s prefer high -quality food over multi -service solu-
tions where food is provided together with other services , such as cleaning; (iii) cus-
tomers demand healthy food with local ingredients and sustainable services; and (iv) 
customers see th eir canteen as a possibility to attract and retain employees.138 A 
trend towards customers favouring smaller or independent suppliers was also con-
firmed to some extent.139 One of the brokers active in Sweden summarised as fol-
lows: “ Most clients are interested in high quality, entrepreneurial spirit and their 
own driving force. Likewise, locally produced food and a high sustainability factor. 
Many are willing to pay higher prices for better quality. Today, the client does not 
want larger meal companies but small er companies that can strengthen their brand. 
The trend is towards smaller meal companies. ”140  
(107)  Customers in the business & industry segment will therefore continue to benefit 
from the ability to choose from an extensive list of credible alternative bidders,  
which ranges from multi -national and national firms, to smaller local rivals. The 
Commission therefore considers that post -Transaction, the Parties will continue to 
face significant competition from the other companies active in the business & in-
dustry se gment in Sweden.  
(108)  Second , barriers to entry into the market for contract foodservices to business & in-
dustry  customers  are low, especially for the companies already operating in the food 
sector in Sweden. A new market entry requires limited resources given that staff is 
typically transferred to the winner of the tender, whereas kitchen facilities typically 
belong to the customer. One competitor explained , for example , that  the assets and 
investments needed t o start offering contract foodservices in another market segment 
than the one he is currently active in are as follows “ The entry barriers  (sic) is low 
as it comes to monetary investment, may need to hire specialists i.e . dietists etc. 
Normally the outsour cer owns all fixed assets, i.e. kitchen equipment .”141 This is 
supported by the results of the market investigation, which show that the most im-
portant criteria for a new market entry in Sweden are (i) the existence of manage-
ment staff with experience in the  contract foodservices industry  and (ii)  the 
knowledge of the contract foodservices industry and how to organise day -to-day op-
                                                 
136  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 22; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 17.  
137  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 23; Replies to Q5 – Questionna ire to 
Customers in Sweden, question 18.  
138  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 26; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 21.  
139  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 26; Repl ies to Q5 – Questionnaire to 
Customers in Sweden, question 21.  
140  Replies to Q9 – Questionnaire t o Brokers, question 14.  
141  Replies to Q1 – Questionnaire to Competitors in Sweden, question 9.  
 
 
25 erations.142 In addition, the majority of competitors responding to the market investi-
gation explained that it would be easy for the m to find suitable food suppliers for 
their contract foodservices operations in Sweden.143 The Commission’s findings in 
relation to low entry barriers on the supply side  are al so supported by the fact that a  
majority of the Swedish  competitors responding to the Commission’s market inves-
tigation believe that a company can enter the Swedish  market and start offering con-
tract foodservices with a contract for a single canteen or only one customer.144  
(109)  Third, o n the demand -side, there are no significant barriers to switching between 
contract foodservices suppliers in the business & industry sector in Sweden. The ma-
jority of competitors responding to the market investigation explained that the ma-
jority of business  & industry customers switches their contract foodservices supplier 
after the contract is terminated, when the contract  would be re -tendered and awarded 
to another supplier.145 Nearly half of the customers responding to the market investi-
gation confirmed tha t they had switched their cont ract foodservices supplier in the 
last five years.146 In addition, the majority of customers responding to the market in-
vestigation confirmed that it was (somewhat) easy for them to find a suitable suppli-
er of contract foodservi ces or to switch to a different supplier of contract foodser-
vices.147 This ability to switch strengthens the competitive constraints on the Parties 
post-Transaction and contributes to the dynamic and competitive environment in the 
Swedish  business & industry  segment.  
(110)  Fourth, the market investigation indicated that customers of contract foodservices 
may sponsor new entry or expansion of other, in particular smaller, contract foodser-
vices suppliers . This can be done by determining the contract details as well a s the 
scope of the foodservices contract.  
(111)  The majority of respondents to the market investigation confirmed that the condi-
tions of the foodservice s contracts (i.e. quality of the food, price, termination claus-
es) are determined by the customers in the business & industry  segment in Swe-
den.148 In general, it seems that the larger the customer, the higher the ability to ne-
gotiate the conditions.149   
(112)  As explained, c ustomers also have the possibility to structure their tender in separate 
tenders for contract foodservices for each of their canteens or sites. Furthermore, 
they have the possibility to split their tenders into smaller lots to increase competi-
tion and promote smaller co ntract foodservices suppliers. The market investigation 
                                                 
142  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 83; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 95.  
143  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 84.  
144  Replies to Q1 – Questionnaire to Competitors in Sweden, question 85.  
145  Replies to Q1 – Questionnaire to C ompetitor s in Sweden, question 57.  
146  Replies to Q5 – Questionnaire to C ustomers in Sweden, question 52.  
147  Replies to Q5 – Questionnaire to C ustomers in Sweden, question 50; Replies to Q9 – Questionnaire t o 
Brokers, quest ion 19.  
148  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 55; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 49; Replies to Q9 – Questionnaire t o Brokers, question 16.  
149  Replies to Q1 – Questionnaire to Competitors in Swe den, question 55; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 51; Replies to Q9 – Questionnaire to Brokers, question 18.  
 
 
26 has shown that these possibilities are used by some customers.150 The majority of re-
spondents to the market investigation confirmed that Swedish customers in the busi-
ness & industry sector  use one or mo re of the following tactics to achieve better con-
tract terms: suggestion to take the foodservice s in-house, to terminate the contract 
and re -tender and/ or to split the tender in smaller lots that may be tendered to differ-
ent suppliers.151  
(113)  Fifth , the Commiss ion’s assessment of the effects of the Transaction  has also take n 
into account the fact that other lunch food options are available to the staff in the 
business & industry sector compared to lunch in the on -site canteen. The majority of 
respondents to the market investigation considered that bring ing lunch from home or 
eating lunch at home would be the preferred alternative lunch food option, followed 
by eating lunch at an outside restaurant.152 One competitor explained , for example , 
that “To bring a Lunchbox  is by far the biggest competition .”153 The Commission 
therefore considers that the se out -of-market constraints will have an effect on the 
merged entity’s continued incentive to deliver good quality and price ratio to their 
customers post -Transaction.  
(114)  Final ly, the majority of respondents to the market investigation having expressed a 
view considered that the Transaction would have no effect on competition in the 
business & industry segment in Sweden.154 While the views of competitors as to 
whether there would be sufficient competition in all sectors, including business & 
industry, following the Transactio n were mixed;155 the majority of customers in 
Sweden did not considered that the Transaction would have an impact on their com-
pany.156  
(115)  Taking the above  considerat ions into account, the Commission considers that the 
Parties will face significant competition in the business & industry  segment in Swe-
den post -Transaction  and that the competitive constraints on the Parties in the supply 
of contract foodservices to busin ess & industry customers in Sweden would be suffi-
cient.  
Conclusion  
(116)  In light of the results of the market investigation and considering the evidence avail-
able to it , the Commission concludes  that the Transaction does not raise serious 
doubts as to its compatibility with the internal market  with respect to  the market for 
the supply of contract foodservices to business & industry customers in Sweden .  
                                                 
150  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 54; Replies to Q5 – Questionnaire to 
Customers i n Sweden, question 48; Replies to Q9 – Questionnaire t o Brokers, question 15.  
151  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 56; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 54; Replies to Q9 – Questionnaire t o Broker s, question 20.  
152  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 25; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 20.  
153  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 25.  
154  Replies to Q1 – Questionnaire to Competitors in Sweden, question 109; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 111; Agreed non -confidential minutes of a conference call of 9 January 
2020 with a customer in Sweden, para. 6.  
155  Replies to Q1 – Question naire to Competitors in Sweden, question 108; E -Mail of a competitor of 15 
January 2020.  
156  Replies to Q5 – Questionnaire to Customers in Sweden, question 110; Agreed non -confidential minutes of 
a conference call of 9 January 2020 with a customer in Sweden , para. 13.  
 
 
27 7.1.4.3.  Contract foodservices to  education  customer s in Sweden  
(117)  Table 5 presents the Parties’ estimate of their market shares in 2018 , 2017 and 2016  
in the supply of contract foodservices to education customers in Sweden based on 
the Parties’ turnover and the estimation of the total market size  by [third pa rty con-
sultant] as explained above .  
Table 5. The Parties’ market shares in supply of contract foodservices to education 
customers in Sweden in 2018 , 2017 and 2016  ([third party consultant] ) 
 2018  2017  2016  
 Revenue   
(€ millions)  Share  Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  
Compass  […] [5-10]% […] [5-10]% […] [0-5]% 
Fazer FS  […] [0-5]% […] [5-10]% […] [5-10]% 
Combined  […] [10-20]% […] [10-20]% […] [5-10]% 
Total 
market  […] 100%  […] 100%  […] 100%  
 Source: Form CO, para. 621 . 
(118)  The Parties verified the assumptions used in the [third party consultant]  model .157 
(119)  Table 6 present s the Parties’ estimate of their market shares in 2018 in the supply of 
contract foodservices to education  customers in Sweden based on (i) the Part ies’ 
turnover, (ii) the Parties’ estimate of their know n competitors’ turnover based on 
public sources and (iii) the total market size calculated as the total of the Parties’ 
own turnover and the estimated known competitors’ turnover .158 
Table 6. The Parties’ market shares in supply of contract foodservices to education 
customers in Sweden in 2018  (estimated competitor turnover)  
 Market shares estimated in 2018  
Compass  [10-20]% 
Fazer  [10-20]% 
Parties combined  [20-30]% 
Sodexo  [30-40]% 
ISS [10-20]% 
Hörs/Nordrest159 [10-20]% 
ACKlein  [5-10]% 
Skolfood i Göteborg  [5-10]% 
Fraiche Catering  [0-5]% 
5 other competitors with an estimated 
market share of up to 2% each  [5-10]% 
Source: Notifying Party’s reply to RFI 1 3 of 20 January 2020 . 
                                                 
157  Form CO, Annex 7A -007, Table 1.  
158  See Notifying Party’s reply  to RFI 12 of 14 January 2020  and the Notifying Party’s reply to RFI 13 of 20 
January.  
159  Nordrest acquired Hörs in 2019, see Form CO, para. 716.  
 
 
28 (120)  The total market size  used to estimate these market shares was around EUR […] 
million, whereas the total market size as estimate d by the [third party consultant]  
model was  around EUR […] million. The Commission therefore acknowledges that 
the market share es timates provided by the Parties  based on competitors ’ revenues 
might be overstated. However, i n the course of the market investigation, the Com-
mission has verified the market share estimates of the Parties. To do this, the Com-
mission has  contacted the majority of significant  competitors who won tenders in 
which one of the Parties participated . While the verification confirms the broader 
picture, namely the presence of sizable competitors, the Parties’ position seems to be 
stronger than th e estimate provided in the table above.160  
(121)  The Notifying Party  submits  that following  the Transaction, the merged entity will 
continue to be constrained by a number of significant competitors, including  Sodexo, 
ISS, Nordrest , and several education foodser vices specialists like AC Klein and 
Fraiche Catering.161 In addition, barriers to entry and expansion would be low and 
there would be strong constraints on the merged entity through buyer power.162 
(122)  The Commission considers that the Transaction is unlikely to raise serious doubts as 
to its compatibility with the internal market for  the following reasons.   
(123)  First, this market is featured not only by the presence of large mul ti-national players 
such as S odexo and ISS, but also by national foodservices suppliers  like Nordrest, 
AC Klein, or Fraiche Catering. Demonstrative of this point is the fact that the Par-
ties’ tender data includes over [0-10] competitors.163 This is also evidenced by the 
Notifying Party’ s own analysis  of the supply of foodservices to lower education in-
stitutions : [Notifying Party’s internal document] .164  
(124)  Furthermore, evidence collected during the market investigation shows that in select-
ing their contract foodservice s providers via tender processes, Swedish education 
customers do not give preference to the historical relationship. Customers give pref-
erence to the quality of the food , local, fresh and/or organic ingredients/food, nutri-
tional value of the food, price of the food as well as  reputation and track -record of 
the supplier.165 Contract foodservice s suppliers try to differentiate from each other to 
win tenders on these parameters  and by offering efficient day -to-day operations .166 
Moreover, the result s of the market investigation show that both competitors and 
customers see as the most important trends in the contract foodservices in Sweden in 
the next three years the following: customers prefer high -quality food over low -cost 
food offering and customer s demand healthy food with local ingredients and sustain-
                                                 
160  Replies to Q1 – Questionnaire to Competitors in Sweden, question 21.  
161  Form CO, paras. 737 et seq .  
162  Form CO, paras. 719 et seq . and 741 et seq . 
163  Form CO, paras. 699 et seq . and 727 et seq . 
164 See Form CO, Annex 5.4.A -126, “[…]” , see also Form CO, para.  736. 
165  Replies to Q1 – Questionnaire to Competitors in Sweden, question s 27 and 32; Replies to Q5 – Question-
naire to Customers in Sweden, question s 22 and 27.  
166  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question s 28 and 33; Replies to Q5 – Question-
naire to Custome rs in Sweden, question s 23 and 28 . 
 
 
29 able services.167 A trend towards customers favouring smaller or independent suppli-
ers was also confirmed to some extent.168  
(125)  Customers in the education segment will therefore continue to benefit from the  abil-
ity to choose from an extensive list of credible alternative bidders, which ranges 
from multi -national and national firms to smaller local rivals. The Commission 
therefore considers that post -Transaction, the Parties will continue to face significant 
competition from the other companies active in the education  segment in Sweden.  
(126)  Second , barriers to entry into the market for contract foodservices to education cus-
tomers  in Sweden  are low, especially for the companies already operating in the food 
sector in Sweden. A new market entry requires limited resources given that staff is 
typically transferred to the winner of the tender, whereas kitchen facilities typically 
belong to the customer. One competitor explained , for example , that  the assets and 
investme nts needed to start offering contract foodservices in another market segment 
than the one he is currently active in are as follows “The entry barriers  (sic) is low 
as it comes to monetary investment, may need to hire specialists i.e . dietists etc. 
Normally  the outsourcer owns all fixed assets, i.e. kitchen equipment .”169 This is 
supported by the results of the market investigation, which show that the most im-
portant criteria for a new market entry in Sweden are (i) the existence of manage-
ment staff with experience in the contract foodservices industry  and (ii)  the 
knowledge of the contract foodservices industry and how to organise day -to-day op-
erations.170 In addition, the majority of competitors responding to the market investi-
gation explained that it woul d be easy for them to find suitable food suppliers for 
their contract foodservices operations in Sweden.171 The Commission’s findings in 
relation to low entry barriers on the supply side are also supported by the fact that a 
majority of the Swedish competito rs responding to the Commission’s market inves-
tigation believe that a company can enter the Swedish market and start offering con-
tract foodservices with a contract for a single canteen or only one customer.172 
(127)  Third , on the demand -side, there are no signific ant barriers to switching between 
contract foodservices suppliers in the education sector in Sweden. The majority of 
competitors responding to the market investigation explained that the majority of 
Swedish customers in the education sector switches their suppliers of contract food-
services after the contract is terminated,  when  it would be re -tendered and awarded 
to another supplier.173 The majority of customers responding to the market investiga-
tion confirmed that they had switched their contract foodservice s supplier in the last 
five years.174 In addition, the majority of customers responding to the market inves-
tigation confirmed that it was (somewhat) easy for them to find a suitable supplier of 
contract foodservices or to switch to a different supplier of co ntract foodservices.175 
                                                 
167  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question s 31 and 36; Replies to Q5 – Question-
naire to C ustomers in Sweden, questions 26 and 31 .  
168  Replies to Q1 – Questionnaire to C ompetitors in Sweden, questi ons 31 and 36 ; Replies to Q5 – Question-
naire to C ustomers in Sweden, question s 26 and 31.  
169  Replies to Q1 – Questionnaire to Competitors in Sweden, question 9.  
170  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 83; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 95.  
171  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 84.  
172  Replies to Q1 – Questionnaire to Competitors in Sweden, question 85.  
173  Replies to Q1 – Questionnaire to C ompetitor s in Sweden, qu estion s 62 and 67.  
174  Replies to Q5 – Questionnaire to Competitors in Sweden, questions 60 and 68.  
175  Replies to Q5 – Questionnaire to C ustomers in Sweden, questions 58 and 66.  
 
 
30 This ability to switch strengthens the competitive constraints provided by customers 
and contributes to the dynamic and competitive environment in the Swedish educa-
tion segment.  
(128)  Fourth, the market investigation provided indications t hat customers of contract 
foodservices may sponsor new entry or expansion of other, in particular smaller, 
contract foodservice s suppliers. This can be done by determining the contract details 
as well as the scope of the foodservices contract, for example , by splitting their ten-
ders into smaller lots.  
(129)  The majority of respondents to the market investigation confirmed that the condi-
tions of the foodservice s contracts (i.e. quality of the food, price, termination claus-
es) are determined by the customers in the  education segment in Sweden.176 In gen-
eral, it seems that the larger the customer, the higher the ability to negotiate the con-
ditions .177 
(130)  As explained, c ustomers also have the possibility to structure their tender in separate 
tenders for contract foodservices  for each of their canteens or sites. Furthermore, 
they have the possibility to split their tenders into smaller lots to increase competi-
tion and promote smaller contract foodservice s suppliers. The market investigation 
has show n that these possibilities a re used by some customers.178 The majority of 
customers responding to the market investigation explained that they use the tactic of 
suggest ing the terminat ion of  the contract  to achieve better contract terms .179 While 
competitors responding to the market inve stigation considered that such a threat 
would not be used by customers,180 the general tactic  was, however,  broadly con-
firmed by a competitor who explained that “ Public sector contracts are always re -
tendered or taken in -house following the contract period – this is general knowledge 
thus no threats are necessary. The argument is used however, in case the customer 
consider (sic) the supplier to breach contract. ”181  
(131)  The Commission also notes that the majority of respondents to the market investiga-
tion having ex pressed a view considered that the Transaction would have an effect 
on competition in the market for contract foodservices to education customers in 
Sweden.182 
(132)  Taking the above  considerations into account, the Commission considers that the 
Parties will face significant competition in the education segm ent in Sweden post -
Transaction  and that the competitive constraints on the Parties in the supply of con-
tract foodservices to education customers in Sweden would be sufficient.  
 
                                                 
176  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question s 60 and 65;  Replies to Q5 – Question-
naire to C ustomers in Sweden, questions 57 and 65.  
177  Replies to Q5 – Questionnaire to Customers in Sweden, questions 59 and 67.  
178  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question s 59 and 64; Replies to Q5 – Questi on-
naire to C ustomers in Sweden, questions 56  and 64. 
179  Replies to Q5 – Questionnaire to C ustomers in Sweden, questions 62 and 70.  
180  Replies to Q1 – Questionnaire to Competitors in Sweden, questions 61 and 66.  
181  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 66.  
182  Replies to Q1 – Questionnaire to C ompetitors in Sweden, questions 110 and 111; Replies to Q5 – Ques-
tionnaire to C ustomers in Sweden, questions 112 and 113.  
 
 
31 Conclusion  
(133)  In light of the results of the market investigation and considering the evidence avail-
able to it , the Commission concludes  that the Transaction does not raise serious 
doubts as to its compatibility with the internal market  with respect to  the market for 
the supply of contract foo dservices to education customers in Sweden .  
7.1.4.4.  Contract foodservices to healthcare & welfare customers in Sweden  
(134)  Table 7 presents the Parties’ estimate of their market shares in 2018 , 2017 and 2016  
in the supply of contract foodservices to healthcare & welfa re customers in Sweden 
based on the Parties’ turnover and their estimation of the total market size by [third 
party consultant]  as explained above.  
Table 7. The Parties’ market shares in supply of contract foodservices to healthcar e & 
welfare customers in Sweden in 2018 , 2017 and 2016  ([third party consultant] ) 
 2018  2017  2016  
 Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  Revenue  
(€ mil-
lions)  Share  
Compass  […] [5-10]% […] [5-10]% […] [5-10]% 
Fazer FS  […] [5-10]% […] [5-10]% […] [5-10]% 
Combined  […] [10-20]% […] [10-20]% […] [10-20]% 
Total mar-
ket […] 100%  […] 100%  […] 100%  
 Source: Form CO, para. 622 . 
(135)  The Parties verified the assumptions used in the [third party consultant]  model.183 
(136)  Table 8 present s the Parties’ estimate of their market shares in 2018 in the supply of 
contract foodservices to healthcare & welfare  customers in Sweden based on (i) the 
Parties’ turnover, (ii) the Parties’ estimate of their know n competitors’ turnover 
based on public sou rces and (iii) the total market size calculated as the total of the 
Parties’ own turnover and the estimated known competitors’ turnover .184 
 
  
                                                 
183  Form CO, Annex 7A -007, Table 1.  
184  See Notifying Party’s r eply to RFI 12 of 14 January 2020  and reply to RFI 13 of 20 January 2020 . 
 
 
32  
Table 8. The Parties’ market shares in supply of contract foodservices to healthcare & 
welfare  customers in Sweden in 2018  (estimated competitor turnover)  
 Market shares estimated in 2018  
Compass  [10-20]% 
Fazer  [20-30]% 
Parties combined  [40-50]% 
Sodexo  [20-30]% 
ISS [10-20]% 
Coor  [10-20]% 
Nordrest  [5-10]% 
Förenade Care  [5-10]% 
Source: Notifying Party’s reply to RFI 1 3 of 20 January 2020 . 
(137)  The total market size used to estimate these market shares was around EUR […] 
million, whereas the total market size as estimate d by the [third party consultant]  
model was EUR […] million. The Commission therefore acknowledges that the 
market share es timates provided by the Parties  based on competitors ’ revenues might 
be overstated.   
(138)  In the course of the market investigation, the Commission has verified  the market  
share estimates of the Parties . To do this, the Commission has contacted the majority 
of significant  competitors who won tenders in which one of the Parties participated . 
The verification confirms the broader picture of the Parties’ position as the market 
leader  post-Transaction .185   
(139)  The Notifying Party submits that , following the Transaction, the merged entity will 
continue to be constrained by a number of significant competitors, including Coor, 
Sodexo, ISS  and Nordrest .186 In addition, barriers to entry and expansion would be 
low and th ere would be strong constraints on the merged entity through buyer pow-
er.187   
(140)  The Commission considers that the Transaction is unlikely to raise serious doubts as 
to its compatibility with the internal market for  the following reasons.  
(141)  First, as shown by the market investigation and demonstrated in Table 8 above, the 
Swedish market for contract foodservices to healthcare & welfare customers is fea-
tured not only by large multi -national players such as Coor, ISS and Sodexo, but also 
by national  foodservice s suppliers like Nordrest.  
(142)  Furthermore, e vidence collected during the market investigation shows that in  select-
ing their contract foodservice s providers via tender processes , Swedish healthcare & 
welfare customers do not give preference to the historical rel ationship with the con-
tract foodservice s supplier. Customers give preference to  the quality of the food, the 
nutritional value of the food, price of the food , efficient day -to-day operations , and 
                                                 
185  Replies to Q1 – Questionnaire to Competitors in Sweden, question 21.  
186  Form CO, p aras. 779 and 805 . 
187  Form CO, paras. 780 et seq. , 784 et seq. , 807 et seq. , 812 et seq .  
 
 
33 the reputation and track -record of the supplier .188 Contract f oodservice s suppliers try 
to differentiate from each other to win tenders on these parameters.189 Moreover, the 
result of the market investigation show s that both c ompetitors and customers see as 
the most important trends in the contract foodservices in Swed en in the next three 
years the following: customers prefer high -quality food over low -cost food offering; 
customers demand healthy food with local ingredients and sustainable services; and 
digital solutions .190 Especially for the elderly care,  a competitor a lso mentioned that 
“[t]here is a trend towards pre -packed ready meals in the elderly care sector which 
is more frequently being provided from wholesaler/producer .”191 A trend towards 
customers favouring smaller or independent suppliers was also confirmed to some 
extent.192 
(143)  Customers in the healthcare & welfare  segment will therefore continue to benefit 
from the ability to choose from an extensive list of credible alternative bidders . The 
Commission therefore considers that , post-Transaction, the Parties will co ntinue to 
face significant competition from the other companies active in the healthcare & 
welfare  segment in Sweden.   
(144)  Second , barriers to entry into the mark et for contract foodservices in Sweden in gen-
eral are low, especially  for the companies already op erating in the food sector in 
Sweden. In general , a new market entry requires limited resources given that staff is 
transferred to the winner of the tender, whereas kitchen facilities typically belong to 
the customer. This is supported by the results of th e market investigation, which 
show that the most important criteria for a new market entry in Sweden are (i) the 
existence of management staff with experience in the contract foodservices industry 
and (ii) knowledge of the contract foodservices industry an d how to organise day -to-
day operations.193 In addition, the majority of competitors responding to the market 
investigation explained that it would be easy for them to find suitable food suppliers 
for their contract foodservices operations in Sweden.194 The Co mmission’s findings 
in relation to low entry barriers on the supply side are also supported by the fact that 
a majority of the Swedish competitors responding to the market investigation believe 
that a company can enter the Swedish market and start offering  contract foodservices 
with a contract for a single canteen or only one customer.195 
(145)  However, f or the healthcare & welfare segment  in Sweden , barriers to entry and ex-
pansion appear slightly higher.  As explained by the Parties, an entrant into the 
healthcare segment would need to demonstrate his ability to provide safe pat ient 
food, which would however be possible by taking over the staff with the relevant 
                                                 
188  Repl ies to Q1 – Questionnaire to C ompetitors in Sweden, questions 37 and 40; Replies to Q5 – Question-
naire to C ustomers in Sweden, question s 32 and 35.  
189  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question s 38 and 41; Replies to Q5 – Question-
naire to C ustomers in Sweden, questions 33 and 36.  
190  Replies to Q1 – Questionnaire to C ompetitors in Sweden, questions 39 and 42 ; Replies to Q5 – Question-
naire to C ustomers in Sweden, question s 34 and 37 . 
191  Replies to Q1 – Questionnaire to Compet itors in Sweden, question 42.  
192  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question s 39 and 42 ; Replies to Q5 – Question-
naire to C ustomers in Sweden, question s 34 and 37 . 
193  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 83; Replies to Q5 – Questionnaire to 
Customers in Sweden, question 95.  
194  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 84.  
195  Replies to Q1 – Questionnaire to Competitors in Sweden, question 85.  
 
 
34 know -how after winning a tender.196 This was broadly confirmed by the market in-
vestigation, where one compe titor explained that to provide contract foodservices to 
healthcare customers “You would need to recruit chefs with a different skill set; in-
vest in a nutritional calculation system to aid with menu planning and recruit a die-
tician to manage the system and  menus. […] ”197  
(146)  In addition , some hospitals or care homes do not have a kitchen to produce food, for 
example , the hospitals in the Region Sk åne.198 The Region Skåne has tendered its 
healthcare contracts in 2015 and 2018 divided in five different lots. Current ly, the 
foodservice s contracts in the healthcare sector in the Region Sk åne are tendered out 
to Compass (3 lots) and Fazer (2 lots).199 Compass, however, does not supply its Re-
gion Sk åne contracts from a central kitchen, but [information on the Notifying Par-
ty’s operations] .200 Fazer provides contract foodservices to hospitals in the Region 
Skåne only since 2015. Fazer explained that it […] took over and rebuilt an existing 
kitchen into a hospital production kitchen before the contract started.201 One compet-
itor also explained that to provide contract foodservices to healthcare customers 
“[…] we would also require that the healthcare authority in question would agree to 
provide a kitchen/production facility (which they would normally would agree 
to)”.202 In the Commission’s view , this demonstrate s that a production kitchen does 
not amount to any significant barrier to entry into the market for contract foodser-
vices in the healthcare & welfare segment in Sweden. As a result, the Commission 
concludes tha t barriers to entry into the healthcare & welfare segment in Sweden are 
low. 
(147)  Third, on  the demand -side, there are no significant barriers to switching between 
contract foodservices suppliers in the healthcare & welfare sector in Sweden. The 
majority of competitors responding to the market investigation explained that the 
majority of healthc are & welfare customers switches their contract foodservices sup-
plier after the contract is terminated, when the contract would be re -tendered and 
awarded to another supplier.203   
(148)  Fourth, the market investigation provided indications that customers of contr act 
foodservices may sponsor new entry or expansion of other, in particular smaller, 
contract foodservice s suppliers. This can be done by determining the contract details 
as well as the scope of the foodservices contract, for example by splitting their ten-
ders into smaller lots.  
                                                 
196  Form CO , para. 781.  
197  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 14.6.  
198  Form CO, para. 768.  
199  Form CO, para. 767.  
200  Form CO, para. 772. 
201  Form CO, para. 768. 
202  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 14.6 . 
203  Replies to Q1 – Questionnaire to C ompetito r in Sweden, questions 72 and 77; from the customers’ side 
the market investigation was inclusive as to whether customers in the majority have switched their con-
tract foodservices supplier in the last five years an d if it is (somewhat) easy for them to find a suitable 
supplier of contract foodservices or to switch to a different supplier of contract foodservices , see Replies 
to Q5 – Questionnaire to C ustomers in Sweden, question 50; Replies to Q9 –  Questionnaire t o Brokers, 
question 19 . 
 
 
35 (149)  The majority of respondents to the market investigation confirmed that the condi-
tions of the foodservice s contracts (i.e. quality of the food, price, termination claus-
es) are determined by the customers in the healthcare & welfare s egment in Swe-
den.204 In general, it seems that the larger the customer, the higher the ability to ne-
gotiate the conditions.205  
(150)  As explained, c ustomers also have the possibility to structure their tender in separate 
tenders for contract foodservices for each of their canteens or sites. Furthermore, 
they have the possibility to split their tenders into smaller lots to increase competi-
tion and promote smaller co ntract foodservices suppliers. The market investigation 
has shown that these possibilities are used by some customers .206 The majority of 
customers responding  to the market investigation confirmed that Swedish customers 
in the healthcare & welfare  sector use  one or more of the following tactics to achieve 
better contract terms: suggestion to take the foodservice s in-house, to terminate the 
contract and re -tender and/or to split the tender in smaller lots that may be tendered 
to different suppliers.207 This was also broadly confirmed by a competitor who ex-
plained that “ Public sector contracts are always re -tendered or taken in -house fol-
lowing the contract period – this is general knowledge thus no threats are necessary. 
The argument is used however, in case the c ustomer consider the supplier to breach 
contract. ” Another competitor explained that “ [s]ince public sector and the tender 
follows a strict public tender process, threats are uncommon .”208 
(151)  Fazer FS  also estimates in its internal documents that the margin in the Swedish pub-
lic sectors including healthcare & welfare is expected to […]  [Fazer FS internal  
document ].209 
(152)  The Commission also notes that the market investigation gave mixed results on the 
question if the Transaction would have an effect on competition.210 
(153)  Taking  the above  considerations into account, the Commission considers that the 
Parties will face significant competition in the healthcare & welfare  segment in 
Sweden post -Transaction  and that the competitive constraints on the Parties in the 
supply of c ontract foodservices to healthcare & welfare  customers in Sweden would 
be sufficient.  
Conclusion  
(154)  In light of the results of the market investigation and considering the evidence avail-
able to it , the Commission concludes  that the Transaction does not raise serious 
                                                 
204  Replies to Q1 – Questionnaire to C ompetitors in Sweden, questions 70 and 7 5; Replies to Q5 – Question-
naire to C ustomers in Sweden, question s 73 and 81.  
205  Replies to Q1 – Questionnaire to Competitors in Sweden, questions 70 and 75 ; Replies to Q5 – Question-
naire to Customers in Sweden, questions 75 and 83 . 
206  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question 69 and 74 ; Replies to Q5 – Question-
naire to C ustomers in Sweden, question s 72 and 80.  
207  Replies to Q5 – Questionnaire to C ustomers in Sweden, questions 78 and 86.  
208  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question s 71 and 7 6. 
209  Form CO, Annex 5.4.B -0.49, page 4; Form CO, para. 812.  
210  Replies to Q1 – Questionnaire to C ompetitors in Sweden, questions 112 and 113; Replies to Q5 – Ques-
tionnaire to C ustomers in Sweden, questions 114 and 115; E -mail of a competitor of 15 January 2020; 
Agreed non -confidential minutes of a conference call 9 January 2020 with a customer in Sweden, para. 
13. 
 
 
36 doubts as to its compatibility with the internal market  with respect to  the market for 
the supply of contract foodservices to healthcare & welfare customers in Sweden .  
7.1.4.5.  Contract foodservices to the Swedish defence  
(155)  The Parties’ activities overlap in  the supply of contract foodservices in the defence 
segment in Sweden .211  
(156)  The Försvarets Materielverk  (“FMV ”) is a Swedish government agency responsible 
for the procurement of materiel to the Swedish defence, including contract foodser-
vices. The Swedish defence  (and therefore FMV ) is the only customer of contract 
foodservices in the defence segment in Sweden.212 
(157)  Fazer FS and Compass both participated in the multiservice tender process launched 
in 2016 by the  FMV (the “2016 FMV Tender”). The 2016 FMV  Tender was divided 
into five lots corresponding to the four military regions of Sweden (the fifth lot was 
for the Swedish defence headquarters in Stockholm).213 As a result of the tender pro-
cess, Fazer FS was awarded four lots for the supply of contract foodservice s to the 
Swedish defence. The fifth lot was awarded to Förenade Service AB.214  
(158)  Although Fazer FS currently holds four out of the five lots related to the supply of 
contract foodservices in the defence segment in Sweden  and the results of the market 
investig ation are inconclusive as to whether the Transaction would have an effect on 
competition ,215 the Commission considers that the Transaction is unlikely to raise 
competition concerns  for the following reasons .  
(159)  First, Fazer FS and Compass will continue to face  significant competition in the 
market for contract foodservices in the defence segment in Sweden post -Transaction. 
In the 2016 FMV Tender, besides Fazer FS and Compass, several contract foodser-
vices suppliers made it into the second round of each of the f ive lots, including Coor, 
ISS, and Sodexo.216 The Swedish defence is likely to announce the next tender for 
contract foodservices in the first trimester of 2020 (the “2020 FMV Tender”).217 All 
the participants to the 2016 FMV Tender are viable and credible bid ders for the 2020 
FMV Tender.  
(160)  Second, the Swedish defence currently has and will continue to have post -
Transaction significant power  to constrain competitors . During the market investiga-
tion, the Swedish defence indicated that the conditions of foodservic es contracts (e.g. 
quality of the food, price and termination clauses) are determined by itself rather 
                                                 
211  Form CO, para. 617.  
212  Form CO, para. 836.  
213  Form CO, paras. 816 et seq .  
214  The four lots awarded to Fazer account for approximately 95% of the total value of the 2016 FMV Tender 
(Form CO, Table 126).  
215  The majority of competitors indicated that the Trans action will have an effect on competition but did not 
further substantiate their replies; Replies to Q1 – Questionnaires to Competitors in Sweden, question 114.  
216  Form CO, Table 126.  
217  Form CO, para. 825.  
 
 
37 than the supplier of contract foodservices218 and that it is easy to switch from one 
supplier to another.219  
(161)  Third, Fazer FS and Compass are not each other’ s closest competitors. During the 
market investigation, the Swedish defence stated that Compass and Fazer FS are not 
close competitors in contract foodservices for the Swedish military.220 Fazer FS’ in-
ternal documents show that Fazer FS considers [competitor ’s name] as a close com-
petitor in the defence segment in Sweden.221 By contrast, Fazer FS considers that the 
defence segment in Sweden is one of Compass’ [Fazer FS internal document ].222  
(162)  Fourth, barriers to entry in the market for contract foodservices in Sweden are low, 
as explained in Section 7..1 .4.4 above . More specifically, with respect to the defence 
segment in Sweden , the Swedish defence indicated that prior experience in the mar-
ket for contract foodservices  is not a determining criterion when awarding a con-
tract.223 This is further demonstrated by the fact that the Swedish defence awarded in 
the 2016 FMV Tender a lot to Förenade Service AB, which used to provide only fa-
cility services prior to this tender. In add ition, according to the latest draft of the 
2020 FMV Tender, the revenue thresholds will not exclude any of the bidders that 
were in the second round of the 2016 FMV Tender.224  
(163)  Therefore, taking the above considerations into account, the Commission consider s 
that the Parties will face significant competition in the defence segment in Sweden 
post-Transaction and that the competitive constraints on the Parties in the supply of 
contract foodservices to the Swedish defence would be sufficient.  
Conclusion  
(164)  In ligh t of the results of the market investigation and considering the evidence avail-
able to it , the Commission concludes that the Transaction does not  raise serious 
doubts as to its compatibility with the internal market with respect to the market for 
the suppl y of contract foodservices to the Swedish defence.   
7.1.5.  Denmark  
7.1.5.1.  Overview of the contract foodservices industry in Denmark   
(165)  In addition to the multi -national companies ISS, Sodexo and Coor  referred to in par-
agraph (78) and following above, a number of  national companies are active in one 
or more market segments  in Denmark . 
(166)  Moreover, due to tax -deductibility of subsidies under the Danish tax law, employers , 
regardless of size , are incentivised to provide employees with a subsidised lunch 
scheme.  
                                                 
218  Replies  to Q5 – Questionnaire to Customers in Sweden, question 89.  
219  Replies to Q5 – Questionnaire to Customers in Sweden, question 90.  
220  Replies  to Q5 – Questionnaire to Customers  in Sweden, question 45. 
221  Form CO, Annex 5.4.B -044 “Competitor Intelligence – […]”, page  4.  
222  Form CO, Annex 5.4.B -042 “Competitor Intelligence – […]”, page 4.  
223  Replies  to Q5 – Questionnaire to Customers in Sweden, question 96.  
224  Form CO, para. 831.  
 
 
38 (167)  ISS is a global player with Nordic roots. In terms of the Danish business & industry 
segment, its 2018 annual report noted , in particular , that its organic growth in N orth-
ern Europe in the previous financial year was mainly supported by growth in Den-
mark due  to, for example,  the expansion of the Danish Defence contract . In 2017, 
ISS hired a new director of its Danish contract foodservices business from Tholstrup 
Group ( which owns a portfolio of leading restaurants and retail food and drink busi-
nesses in Denmark).225 
(168)  Sodexo is one of the world’s largest global providers of facility services. In the Dan-
ish business & industry segment, Sodexo serves approximately 12  000 emplo yees in 
several of Denmark’s leading companies. The Notifying Party submits that Sode xo 
operates at least 23 kitchens in Denmark, including for many large and sophisticated 
business & industry customers such as IBM, Tetra Pak , MHI Vestas and Danfoss.226 
(169)  Coor is a leading Nordic facility management provider and provides a range of ser-
vices across a number of sectors. It has many business & industry customers such as 
Fujitsu, Fibertex, Velux, and various sites for the Danish Police and the Danish Tax 
Author ity.227 
(170)  Meyers Kantiner, being part of the vertically integrated Løgismose Meyers Group, is 
one of the Parties’ main competitors in the Danish business & industry segment. Its 
strong customer base in the Danish business & industry segment is also evident fro m 
[…].228 
(171)  Gruppo Camst is a leading European contract foodservices company based in Italy, 
with operations in Italy, Spain, Germany and Denmark. It entered Danish contract 
foodservices in 2018 through its acquisition of controlling stakes in Cheval Blanc 
and Claus Tingstrøm.229 
7.1.5.2.  Contract foodservices to  business &  industry customers in Denmark  
(172)  Table 9  presents the Parties’ estimate of their market shares in  2018, 2017 and 201 6 
in the supply of contract foodservices to business & industry customers in Denmark 
based on the Parties’ turnover and the estimation of the total market size  by [third 
party consultant] , as explained in Section  7.1.3 above.  
 
  
                                                 
225  From CO, para. 397. 
226  From CO, para. 397.  
227  From CO, para. 397.  
228  From CO, para.  397. 
229  Form CO, para. 397.  
 
 
39  
Table 9. The Parties’ market shares in supply of contract foodservices to business & 
industry customers in Denmark  in 2018 , 2017 and 2016  ([third party consultant] ) 
 2018  2017  2016  
 Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  Revenue   
(€ millions)  Share  
Compass  […] [10-20]% […] [10-20]% […] [10-20]% 
Fazer FS  […] [10-20]% […] [10-20]% […] [10-20]% 
Combined  […] [20-30]% […] [20-30]% […] [20-30]% 
Total market  […] 100%  […] 100%  […] 100%  
 Source: Form CO, para. 342.  
(173)  The Parties verified the assumptions used in the [third party consultant]  model and 
concluded the following: if one official source on the share of customers with access 
to a canteen is used, the Parties ’ combined market share would increase from [20-
30]% to [20-30]%. If the Parties’ price data instead of the assumptions by [third par-
ty consultant]  would be used, the combined market share would increase from [20-
30]% to [20-30]%. While alternative sources would exist on the question of canteen 
outsourcing, [third party consultant]  assumption would be conservative.230 
(174)  Table 10 presents the Parties’ estimate of their market shares in 2018 in the supply 
of contract foodservices to the business & industry customers in Denmark based on 
(i) the Parties’ turnover, (ii) the Parties’ estimate of their know n competitors’ turno-
ver based on public sources and (iii) the total market size calculated as the total of 
the Parties’ own turnover and the estimated known competitors’ turnover .231 
Table 10. The  Parties’ market shares in supply of contract foodservices to business & 
industry customers in Denmark in 2018  (estimated competitor turnover)  
 Market shares estimated in 2018  
Compass  [10-20]% 
Fazer  [20-30]% 
Parties combined  [30-40]% 
ISS [10-20]% 
Meyers  [10-20]% 
Coor  [0-5]% 
Sodexo  [0-5]% 
                                                 
230  Form CO, Annex 7A -007, Table 1.  
231  See Notifying Party’s r eply to RFI 12 of 14 January 2020.  
 
 
40  Market shares estimated in 2018  
Able (Frokost.dk)  [5-10]% 
Gruppo Camst  [5-10]% 
Catering Danmark  [0-5]% 
23 other competitors with an estimated 
market share of up to 2% each  [5-10]% 
Source: Notifying Party’s reply to RFI 12 of 14 January 2020 . 
(175)  The total market size used  to estimate these market shares was around EUR […] 
million, whereas the total market size as esti mate d by the [third party consultant]  
model was EUR […] million. The Commission therefore acknowledges that the 
market share e stimates provided by the Parties based on competitors ’ revenues might 
be overstated.  
(176)  In the course of the market investigation, the Commission has verified the market 
share estimates of the Parties. To do this, the Commission has contacted the majority 
of significant  competitors who won tenders in which one of the Parties participated. 
The verification confirms the broader picture of the Parties’ position as the market 
leader post -Transaction  with a clear difference over the next in line competitors .232  
(177)  The Notifying Party submits that , following the Transaction, the merged entity will 
continue to be constrained by a number of significant competitors, including ISS, 
Gruppo Camst, and Coor. Moreover, according to the Notifying Party, the merged 
entity will co ntinue to face competition from a large number of smaller, local com-
petitors.233 In addition, barriers to entry and expansion would be low and there 
would be strong constraints on the merged entity through buyer power as well as 
out-of-market constraints , such as restaurants.234 
(178)  The Commission considers that, d espite the somewhat high combined market shares 
of the Parties following the Transaction, the Transaction is unlikely to raise serious 
doubts as to its compatibility with the internal market  due to the following reasons.  
(179)  First, as shown by the market investigation and demonstrated in Table 10 , the Dan-
ish market for contract foodservices to business & industry customers is featured not 
only by large multinational players such as Coor, ISS, Sod exo, but also by mid-size 
players like Gruppo Camst, Jespers Torvekøkken, and Forenede Service  and a num-
ber of various sizes local suppliers such as Simply Cooking, Meyers Kantiner, Euro-
pa 1989, Københavns Kantine Service, and other rivals.235 Demonstrative of this 
point is the fact that the Parties’ tender data includes over [20-30] different competi-
tors.236 The market is characterised by a large number of smaller suppliers capable of 
                                                 
232  Replies to Q4 – Questionnaire to Competitors  in Denmark, question 20.  
233  Form CO, para. 330.  
234  Form CO, paras. 333 et seq . 
235  Among which are Madkastellet, Able (Frokost.dk), Kai Thor, Allianceplus and a number of others. See 
Notifying Party’s reply to RFI 12 of 14 January 2020, Annex RFI 12 -001. 
236  Form CO, Table 34.  
 
 
41 also serving larger customers. Indeed, as indicated in Fazer FS’ internal do cuments, 
“the lower end of B&I (up to 0.5 M €) have had  many new competitors. [Fazer FS’s 
internal document] .237 The respondents to the Commission’s market investigation al-
so note d that “[t]here are a lot of small companies that only has (sic) one local cus-
tomers. ”238 For example , the foodservice s supplier Madkastellet won a very large 
contract for KLP Ejendomme A/S (a property management company) covering three 
large office buildings and up to 5  000 potential consumers which will start in Febru-
ary 2020. Fazer FS estimates that the contract is worth EUR […].239 On the basis of 
the data submitted by the Notifying Party, it appears that of the [>100] Danish busi-
ness & industry tenders that Compass participated in the past five years,240 Compass 
encountered ISS in […] tenders (or [30-40]%), Meyers Kantiner in […] tenders (or 
[10-20]%), Jespers Torvekøkken in […] tenders (or [10-20]%), Gruppo Camst in 
[…] tenders (or [20-30]%) and Forenede Service in […] tenders (or [10-20]%).241 
(180)  Furthermore, evidence collected during the market investigation shows that in select-
ing their contract foodservices supplier via tenders, Danish business & industry cus-
tomers  do not give preference to the historical relationship with the contract foodser-
vices supplier. Customers give preference to the quality  of the food, the price of the 
food, and the nutritional value of the food.242 Indeed, on the basis of competitors’ re-
sponses, it appears that in order to win tenders, contract foodservices suppliers try to 
differentiate their offering on the basi s of similar parameters.243 Moreover, the re-
sults of the market investigation show that both customers and competitors believe 
that the contract foodservices market in Denmark is shifting towards higher quality 
food preference over lesser quality but cheaper  offering.244 As one customer ex-
plains, “ quality is of essence and with growing focus on sustainability lo-
cal/fresh/organic produce is of growing importance ”.245 A large number of respond-
ents also confirmed that the key trend in the next three years in contrac t foodservices 
in Denmark will be healthy food with local ingredients and sustainable services.246 A 
trend towards customers favouring smaller or independent suppliers was also con-
firmed to some extent.247 
(181)  Customers in the business & industry segment will ther efore continue to benefit 
from the ability to choose from an extensive list of credible alternative bidders, 
which ranges from multi -national and national firms to smaller local rivals. The 
                                                 
237  Form CO, Annex 7B -001, Gold Food Services Denmark Sales Pla n 2017 -2018, dated June 2016, at page 
9. 
238  Replies to Q4 – Questionnaire to Competitors in Denmark, question 58.1.  
239  Notifying Party’s reply to RFI 12 of 14 January 2020.  
240  I.e. between 2014 and 2018.  
241  Form CO, para. 396.  
242  Replies to Q4 – Questionnaire to Competitors in Denmark, question 21; Replies to Q8 – Questionnaire to 
Customers in Denmark, question 16.  
243  Replies to Q4 – Questionnaire to Competitors in Denmark, questions 21 and 22.  
244  See Replies to Q4 – Questionnaire to Competitors i n Denmark, question 25. Some competitors note that in 
general, the demand for high -end food quality is greater in Denmark compared to other Nordic countries. 
See Replies to Q4 – Questionnaire to Competitors in Denmark, question 16.1.  
245  Replies to Q8 – Questionnaire to Customers in Denmark, question 16.1.  
246  Replies to Q4 – Questionnaire to Competitors in Denmark, question 26; Replies to Q8 – Questionnaire to 
Customers in Denmark, question 25.  
247  Replies to Q4 – Questionnaire to Competitors in Denmark, q uestion 26; Replies to Q8 – Questionnaire to 
Customers in Denmark, question 25.  
 
 
42 Commission therefore considers that post -Transaction, the Parties will continue to 
face significant competition from the other companies active in the business & in-
dustry segment in Denmark . 
(182)  Second , barriers to entry into the market for contract foodservices to  business & in-
dustry customers  are low, especially for the companies that have been active in the 
food sector in Denmark. Indeed, the results of the market investigation show that a 
new market entry requires only limited resources given that staff is transferred to the 
winner of the te nder, whereas kitchen facilities typically belong to the customer. The 
majority  of competitors indicate d that “management staff with experience in the con-
tract foodservices industry ” is by far the most important criteri on for a new market 
entry.248 As furthe r explained by one of the Parties’ competitor s, “it is key to have 
knowledge of the industry and know how to organise day -to-day operations. Central 
kitchens are not necessary, and often you will use the customer's kitchen equip-
ment.”249 The Commission’s fin dings in relation to low entry barriers on the supply 
side are also supported by the fact that a majority of the Danish competitors respond-
ing to the market investigation believe that a company can enter the Danish market 
and start offering contract foodse rvices with a contract for a single canteen or only 
one customer.250 Indeed, as already explained above, the Danish market is character-
ised by the existence of  an extensive number of smaller contract foodservices suppli-
ers who only have one local customer. O ne competitor  gave  an example of an entry 
through an existing relationship with a customer where a chef starts her/his own 
business, “[i]t can typically be done due to relations. Eg a chef in a company makes 
his own business and starts as a contractor - often smaller companies .”251  
(183)  Third, on the demand side, there are no significant barriers to switching between 
contract foodservices suppliers in the business & industry sector in Denmark. 
Around half of the customers responding to the market investigation co nfirmed that 
it was (somewhat) easy for them to find a suitable supplier of contract foodservices 
or to switch to a different supplier of contract foodservices.252 Indeed, the Notifying 
Party’s submission includes concrete examples of recent customer switchi ng to other 
contract foodservices providers. For instance, as explained by Compass, between 
March and July 2019 , […] of its customers switched before their contractual end 
date by giving notice to terminate.253 This ability to switch strengthens the competi-
tive constraints on the Parties post -Transaction and contributes to the dynamic and 
competitive environment in the Danish business & industry segment.  
(184)  Fourth, the market  investigation provided indications  that customers of contract 
foodservices may sponsor new entry or expansion  of other, in particular smaller, 
contract foodservice s supplie rs. This can be done by determining the contract details 
as well as the scope of the foodservices contract, for example , by splitting their ten-
ders into smaller lots.  
                                                 
248  Replies to Q4 – Questionnaire to Competitors in Denmark, question 56.  
249  Replies to Q4 – Questionnaire to Competitors in Denmark, question 56.1.  
250  Replies to Q4 – Questionn aire to Competitors in Denmark, question 58.  
251  Replies to Q4 – Questionnaire to Competitors in Denmark, question 58.1.  
252  Replies to Q8 – Questionnaire to Customers in Denmark, question 38. See also Replies to Q9 – Question-
naire to Brokers, question 19.  
253  [Confidential information regarding the Notifying Party’s customers] . See Form CO, para. 414 and foot-
note 362.  
 
 
43 (185)  The majority of respondents to the market investigation confirmed  that in Denmark, 
the conditions of the contracts for foodservices  (e.g. quality of the food, price, ter-
mination clauses) are typically determined by the business & industry customers ra-
ther than by the contract foodservices suppliers.254 One of the local Danish competi-
tors mention ed that “ today the contract is often made by the customer ”.255 In general, 
it seems that the larger the customer, the higher the ability to negotiate the condi-
tions.  
(186)  As explained, c ustomers also have the possibility to structure their tender in separate 
tenders for contract foodservices for each of their canteens or sites. Furthermore, 
they have the possibility to split their tender into smaller lots to increase competit ion 
and promote small er contract foodservices suppliers. The market investigation 
show ed that these possibilities had been used by some customers.256 In addition, 
some of the respondents explain ed that in order to facilitate the tender process, some 
Danish b usiness & industry customers  also hire brokers who typically are capable to 
advise them on how to better structure tenders to extract more favourable terms.257  
(187)  Fifth, the Commission’s assessment of the effects of the Transaction has also take n 
into account the fact that other lunch food options are available to the customer’s 
staff in the business & industry sector compared to lunch in the on -site canteen. The 
majority of respondents to the market investigation consider ed that bringing lunch 
from home or eat ing lunch at home would be the  preferred alternative option to the 
food served at an organisation’s canteen.258 As explained by one of the Parties’ com-
petitors, “ many end customers find it too expensive to buy food in a canteen and 
therefore bring their own lunch from home ”.259 Another important alternative for end 
customers is eating a snack or a sandwich that was not bought at the on -site can-
teen.260 The Commission therefore considers that these out -of-market constraints 
will have an effect on the merged entity ’s continued incentive to deliver good quality 
and price ratio to their customers post -Transaction.  
(188)  Finally, the majority of respondents to the market investigation having expressed 
their view consider ed that the Transaction would have no effect on compet ition in 
the business & industry segment in Denmark.261 While customers active in Denmark 
expressed mixed views, t he majority of competitors were of the view that there 
would be sufficient competition in all sectors, including business & industry, follow-
                                                 
254  Replies to Q8 – Questionnaire to Customers in Denmark, question 37; Replies to Q4 – Questionnaire to 
Competitors in Denmark, question 43.  
255  Replies to Q4 – Questionnaire to Competitors in Denmark, question 43.1.  
256  Replies to Q4 – Questionnaire to Competitors in Denmark, questions 44 and 44.1. Also, as explained by 
Fazer FS, […] of its former customers have switched from outsourced catering t o in-house catering: [c on-
fidential information regarding Fazer FS’s customers] . See Form CO, para. 419. Furthermore, based on 
the submission of the Notifying Party, ISS has recently lost its Dansac (a medical equipment manufactur-
er) contract to the in -hous e bidder in 2019. See Form CO, para. 419.  
257  Replies to Q9 – Questionnaire to Brokers, questions 1 and 14.4.  
258  Replies to Q4 – Questionnaire to Competitors in Denmark, question 24; Replies to Q8 – Questionnaire to 
Customers in Denmark, question 19.  
259  Replies to Q4 – Questionnaire to Competitors in Denmark, question 24.  
260  Replies to Q4 – Questionnaire to Competitors in Denmark, question 24; Replies to Q8 – Questionnaire to 
Customers in Denmark, question 19.  
261  Replies to Q4 – Questionnaire to Competitors in Denmark, question 73; Replies to Q8 – Questionnaire to 
Customers in Denmark, question 69. This view was also supported by a broker active in Denmark, see 
Replies to Q9 – Questionnaire to Brokers, questions 26 and 26.1.  
 
 
44 ing the Transaction.262 Indeed, as noted by one of the competitors, “ there will still be 
adequate number of suppliers in the market ”.263  
(189)  Taking  the above considerations into account , the Commission considers  that the 
Parties will face significant competition in the business & industry segment in Den-
mark post -Transaction  and that the competitive constraints on the Parties in the sup-
ply of contract foodservices to business & industry customers in Denmark would be 
sufficient.  
Conclusion  
(190)  In light of the results of the market investigation and considering the evidence avail-
able to it , the Commission concludes  that the Transaction does not raise serious 
doubts as to its compatibility with the internal market with re spect to the market for 
the supply of contract foodservices to business & industry customers in Denmark.  
7.1.5.3.  Contract foodservices to  education  customers in Denmark  
(191)  In Denmark, both Compass and Fazer FS are active in the provision of contract 
foodservices to e ducation customers, including universities, technical colleges, adult 
education colleges and other tertiary education establishments. These are predomi-
nantly public institutions, which typically tender under the European public pro-
curement rules. While tra ditionally meals have been subsidised, the Notifying Party 
submits that there has been a recent trend towards “zero -subsidy” contracts.264 The 
Parties are only active in the provision of contract foodservices to higher education 
customers and are not active in lower education.265 The Notifying Party submits that 
the lower education segment is almost non -existent in Denmark,266 therefore, there is 
no meaningful distinction between conducting the market share analysis on a whole 
Danish education basis or on a Danis h higher education basis.267 
(192)  The results of the market investigation to some extent confirm that there is no mate-
rial supply -side differences in serving a university canteen or a high school can-
teen,268 therefore, given that the lower education segment is almo st non -existent, the 
Commission will assess the impact of the Transaction in the supply of contract food-
services to Danish customers in the overall education segment.  
                                                 
262  Replies to Q4 – Questionnaire t o Competitors in Denmark, question 72.  
263  Replies to Q4 – Questionnaire to Competitors in Denmark, question 72.1.  
264  Under a “zero -subsidy” contract, the meals are not subsidised by the customer, and the costs of the meals 
are entirely covered by the price  paid by end -consumers, like in a high street restaurant. See Form CO, pa-
ra. 428 and footnote 369. As submitted by the Notifying Party, [information on the Notifying Party’s 
business strategy] , whereas [information on Fazer FS’ business strategy] . See Form  CO, para. 428 and 
footnote 369.  
265  Form CO, paras. 425 and 428.  
266  The Notifying Party submits that the education segment in Denmark is almost entirely comprised of high-
er education contracts. This is due to the cultural norm that most schools do not have  on-site canteens and 
pupils tend to bring their own lunches to school, and the fact that Denmark does not have a state -funded 
lunch programme. See Form CO, para. 344. This is consistent with the Parties’ internal documents. For 
example, Fazer FS notes tha t the lower education segment in Denmark is […]. See Form CO, Annex 
5.4.B -037, page 67.  
267  Form CO, para. 344.  
268  Replies to Q4 – Questionnaire to Competitors in Denmark, questions 13.5, 13.6.2 and 13.6.2.1; Replies to 
Q8 – Questionnaire to Customers in De nmark, question 12.2. See also agreed non -confidential minutes of 
a conference call of 14 January 2020 with a customer in Denmark, para. 9.  
 
 
45 (193)  Table 11  presents the Parties’ estimate of their market shares in 2018 , 2017 and 2016  
in the supply of contract foodservices to education customers in Denmark based on 
the Parties’ turnover and their estimation of the total market size, as explained in 
Section  7.1.3 above.  
 
Table 11. The Parties’ market shares in supply of contract foodservices to education 
customers in Denmark  in 2018 , 2017 and 2016  ([third party consultant] ) 
 2018  2017  2016  
 Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  Revenue   
(€ mil-
lions)  Share  
Compass  […] [10-20]% […] [10-20]% […] [10-20]% 
Fazer FS  […] [5-10]% […] [0-5]% […] [0-5]% 
Combined  […] [10-20]% […] [10-20]% […] [10-20]% 
Total market  […] 100%  […] 100%  […] 100%  
 Source: Form CO, para. 343.  
(194)  Table 12  presents the Parties’ estimate of their market shares in 2018 , 2017 and 2016  
in the supply of contract foodservices (lunch only) to higher education customers in 
Denmark based on the Parties’ turnover and their estimate of the total market size, as 
explained in Section  7.1.3 above.  
Table 12. The Partie s’ market shares in supply of contract foodservices to education 
customers (lunch only) in Denmark  in 2018 , 2017 and 2016  ([third party consultant] ) 
 2018  2017  2016  
 Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  
Compass  […] [10-20]% […] [30-40]% […] [30-40]% 
Fazer FS  […] [20-30]% […] [10-20]% […] [5-10]% 
Combined  […] [40-50]% […] [40-50]% […] [30-40]% 
Total market  […] 100%  […] 100%  […] 100%  
 Source: Form CO, para. 353.  
(195)  Table 13 present s the Parties’ estimate of their market shares in 2018 in the supply 
of contract foodservices to higher education  customers in Denmark based on (i) the 
Parties’ turnover, (ii) the Parties’ estimate of their know n competitors’ turnover 
based on public sources and (iii) the total market size calculated as the total of the 
Parties’ own turnover and the estimated known competitors’ turnover .269 
                                                 
269  See Notifying Party’s r eply to RFI 12 of 14 January 2020.  
 
 
46 Table 13. The Parties’ market shares in supply of co ntract foodservices to higher edu-
cation customers in Denmark in 2018  (estimated competitor turnover)  
 Market shares estimated in 2018  
Compass  [10-20]% 
Fazer  [20-30]% 
Parties combined  [40-50]% 
Sodexo  [5-10]% 
ISS [5-10]% 
Coor  [5-10]% 
Jespers Torvek økken  [10-20]% 
Spisestuerne  [5-10]% 
Studenterhusfonden  [0-5]% 
8 other competitors with an estimated 
market share of up to 2% each  [10-20]%  
Source: Notifying Party’s reply to RFI 12 of 14 January 2020 . 
(196)  The Commission attempted to verify the robustness of the Parties’ submission  in the 
course of the market investigation , however, this was inconclusive and did not deliv-
er credible results.  
(197)  The Notifying Party submits that , following the Transaction, the merged entity will 
continue to be constrained by a number of significant competitors, including ISS, 
Jespers Torvekøkken, Simply Cooking, DinnerdeLuxe, Forenede Services and 
Gruppo Camst.270 In addition, barriers to entry and expansion would be low and 
there would be strong constraints on the merged entity t hrough buyer power as well 
as out -of-market constraints, such as restaurants.271 
(198)  The Commission considers that the Transaction is unlikely to raise serious doubts as 
to its compatibility with the internal market  for the following reasons.  
(199)  First, as shown by  the market investigation and demonstrated in Table 13, the Dan-
ish market for contract foodservices to education customers is feature d not only by 
large multi -national  players such as Coor  and ISS , but also  by mid-size and smaller 
local players like Jesper s Torvekøkken, Meyers Kantiner , Simply Cooking, Gruppo 
Camst, DinnerdeLuxe, and others.272 Demonstrative of this point is the fact that the 
Parties’ tender data includes close to [20-30] competitors in this segment.273 In addi-
tion, the Parties will continue to face strong and intensifying competition from stu-
dent cooperatives that, according to the Notifying Party, enjoy particular advantages 
in the education segment. Not only do they have no profit requirement (and are 
therefore m ore able to compete on price), but they have also proved recently to be 
                                                 
270  Form CO, paras. 439 -440. 
271  Form CO, paras. 465 et seq. 
272  Among which are Europa 1989, De Grønne Kokke, Green Kitchen Kantiner and a few other players. See 
Notifying Party’s reply to RFI 12 of 14 January 2020, Annex RFI 12 -001. See also Form CO, para. 454.  
273  Form CO, para. 434.  
 
 
47 more attuned to the fast changing tastes and preferences of students, who have a 
strong voice in the contract award process. As a result, many of these student coop-
eratives (such as Sp isestuerne, Studenterlauget, Studenterhusfonden, and Association 
of Students and Faculty at the Department of Mathematical Sciences) have been ex-
panding rapidly in recent years.274 Customers in the education segment will therefore 
continue to benefit from th e ability to choose from a number of credible alternative 
bidders, which ranges from multi -national to smaller local rivals. The Commission 
therefore considers that , post-Transaction, the Parties will continue to face signifi-
cant competition from the other  companies active in the education segment in Den-
mark.  
(200)  Second , barriers to entry into the market for contract foodservices to education cus-
tomers are low, especially for the companies already operating in the food sector in 
Denmark. A new market entry requ ires limited resources given that staff is typically 
transferred to the winner of the tender, whereas kitchen facilities typically belong to 
the customer. This is supported by the results of the market investigation, which 
show that the most important crit eria for a new market entry are (i) the existence of 
management staff with experience in the contract foodservices industry and (ii)  
knowledge of the contract foodservices industry and how to organise day -to-day op-
erations.275 One of the Parties’ competitors  explain ed that “ it is key to have 
knowledge of the industry and know how to organise day -to-day operations. Central 
kitchens are not necessary, and often you will use the customer’s kitchen equip-
ment .”276 In addition, the majority of competitors responding to the Commission’s 
market investigation explain ed that it would be easy for them to find suitable food 
suppliers for their contract foodservices operations in Denmark.277 Furthermore, the 
market  investigation has shown  that competitors that currently have a  presence in the 
business & industry segment might also become a credible competitive force in the 
education segment in Denmark in the near future.278 
(201)  Third, on the demand side, there are no significant barriers to switching between 
contract foodservices sup pliers in the education sector in Denmark. On the basis of 
the majority of customers’ responses, it appears to be (somewhat) easy to find a suit-
able supplier of contract foodservices or to switch to a different supplier of contract 
foodservices in the educ ation segment.279 The majority of education customers re-
sponding to the market investigation confirmed that in the past five years, they have 
changed the supplier of contract foodservices.280 This ability to switch strengthens 
                                                 
274  On the basis of their a nnual reports, their 2018 income from contract foodservices in Denmark was in total 
around EUR 10 800 000, which exceeds the revenues of contract foodservices supplier Jespers 
Torvekøkken in the education segment.  See Notifying Party’s reply to RFI 12 of 1 4 January 2020, Annex 
RFI 12 -001.  
275  Replies to Q8 – Questionnaire to Customers in Denmark, question 59; Replies to Q4 – Questionnaire to 
Competitors in Denmark, question 56.  
276  Replies to Q4 – Questionnaire to Competitors in Denmark, question 56.1.  
277  Replies to Q4 – Questionnaire to Competitors in Denmark, question 57. At the same time, competitors 
explain that the economies of scale also matter in acquiring ingredients from suppliers. See Replies to Q4 
– Questionnaire to Competitors in Denmark, question  57.1.  
278  Agreed non -confidential minutes of a conference call of 14 January 2020 with a customer in Denmark, 
para. 14.  
279  Replies to Q8 – Questionnaire to Customers in Denmark, question 46; Agreed non -confidential minutes of 
a conference call of 14 Januar y 2020 with a customer in Denmark, para. 15.  
280  Replies to Q8 – Questionnaire to Customers in Denmark, question 48.  
 
 
48 the competitive constraints on th e Parties  post-Transaction and contributes to the dy-
namic and competitive environment in the Danish education segment.  
(202)  Fourth, the market  investigation provided indications that customers of contract 
foodservices may sponsor new entry or expansion  of other, in particular smaller, 
contract foodservice s suppliers. This can be done by determining the contract details 
as well as the scope of the foodservices contract , for example by splitting their ten-
ders into smaller lots .   
(203)  The majority of respondents t o the market investigation note d that in Denmark, the 
conditions of the contracts for foodservices (e.g. quality of the food, price, termina-
tion clauses) are typically determined by the education segment customers rather 
than by the contract foodservices s uppliers.281 In general, it seems that the larger the 
customer, the higher the ability to negotiate the conditions.  
(204)  As explained, c ustomers also have the possibility to structure their tender in separate 
tenders for contract foodservices for each of their c anteens or sites. Furthermore, 
they have the possibility to split their tenders into smaller lots to increase competi-
tion and promote smaller contract foodservices suppliers. The market investigation 
has show n that Danish education customers typically spli t their tenders into smaller 
lots, e.g. by campus.282 One of the education customers explain ed that in such small-
er-scale  contract s, smaller contract foodservices suppliers can also compete for their 
contracts, “ we con sider  splitting our contracts, to get bi ds from smaller suppli-
ers/less mainstream canteen solutions .”283 In addition, some of the respondents ex-
plain ed that in the majority of the Danish education tenders customers hire brokers 
who typically are capable to advise them on how to better structure te nders to extract 
more favourable terms.284  
(205)  Fifth, the Commission’s assessment of the effects of the Transaction has also taken 
into account the fact that in the higher education segment in Denmark, other lunch 
food options are available to the customers of on-site canteens. The majority of re-
spondents to the market investigation considered that bringing lunch from home or 
eating lunch at home would be the preferred alternative lunch food option.285 A 
competitor explained, “ [i]t is cheaper for the students to b ring lunch from home ”.286 
The Commission therefore considers that these out -of-market constraints will have 
an effect on the merged entity’s continued incentive to deliver good quality and price 
ratio to their customers post -Transaction.  
                                                 
281  Replies to Q8 – Questionnaire to Customers in Denmark, question 45; Replies to Q4 – Questionnaire to 
Competitors in Denmark, questions 4 8 and 48.1.  
282  Replies to Q8 – Questionnaire to Customers in Denmark, question 44; Agreed non -confidential minutes of 
a conference call of 14 January 2020 with a customer in Denmark, paras. 2 -3. 
283  Replies to Q8 – Questionnaire to Customers in Denmark, que stion 46.1.  
284  Replies to Q9 – Questionnaire to Brokers, questions 1 and 14.4; Replies to Q8 – Questionnaire to Cus-
tomers in Denmark, questions 43 and 43.1; Replies to Q4 – Questionnaire to Competitors in Denmark, 
question 46.  
285  Replies to Q8 – Questionna ire to Customers in Denmark, question 24; Replies to Q4 – Questionnaire to 
Competitors in Denmark, question 29.  
286  Reply to Q4 – Questionnaire to Competitors in Denmark, question 29.1.  
 
 
49 (206)  Finally, the views of customers and competitors were  mixed as to whether the 
Transaction will have  an effect on competition.287 While  some of the Danish cus-
tomers identified a concern about one competitor leaving the market,288 at the same 
time, some of them c onfirm ed that there will remain an adequate number of suppli-
ers to maintain sufficient competition in the market post -Transaction.289 Indeed, a 
large education customer explained  that “there would be sufficient suppliers to main-
tain sufficient competition in  the market post -Transaction ” adding that it deem ed 
that “ Forenede Kantiner and ISS [will] make for satisfactory competitors post -
Transaction .”290 Another customer noted that “[i]n this contract period we don't see 
that it will have an impact on our company.  And since we consider smaller contracts 
in the future, we don't see it will have an impact for us .”291  
(207)  Taking  the above considerations into account , the Commission considers  that the 
Parties will face sufficient competition in the education segment in Denm ark post -
Transaction  and that the competitive constraints on the Parties in the supply of con-
tract foodservices to education customers in Denmark would be sufficient.  
Conclusion  
(208)  In light of the results of the market investigation and considering the eviden ce avail-
able to it , the Commission concludes  that the Transaction does not raise serious 
doubts as to its compatibility with the internal market with respect to the market for 
the supply of contract foodservices to education customers in Denmark.  
7.1.6.  Norway  
7.1.6.1.  Overview o f the contract foodservices industry in Norway  
(209)  In addition to the multi -national companies such as ISS, Sodexo and Coor  referred to 
in paragraph (78) and fo llowing above , several national companies are active in the 
provision of  contract foodservices in Norway.  Among the larger national suppliers 
are Toma Gruppen and 4Service.  
(210)  Toma Gruppen is one of Norway’s largest facilities management companies , which 
entered the contract foodservices markets in 200 6 through its acquisition of Alba-
tross Kantine.292  
(211)  4Service was established in 2010 and has expanded through four acquisitions of con-
tract foodservice s providers in the last years. 4Service employs around 2 700 em-
ployees with an annual turnover of NOK 1.6 billion ( EUR 163 million ) in 2018 .293 
                                                 
287  Replies to  Q4 – Questionnaire to Competitors in Denmark, question s 74 and 75.   
288  Replies to Q8 – Questionnaire to Customers in Denmark, question 70.1.  
289 Agreed non -confidential minutes of a conference call of 14 January 2020 with a customer in Denmark, 
para. 13.  
290  Agreed non -confidential minutes of a conference call of 14 January 2020 with a customer in Denmark, 
para. 13.  
291  Replies to Q8 – Questionnaire to Customers in Denmark, question 68.  
292  Form CO, para. 585.  
293  Form CO, para. 585.  
 
 
50 7.1.6.2.  Contract foodservices to business & industry customers in Norway  
(212)  Table 14 presents the Parties’ estimate of their market shares in 2018 , 2017 and 2016  
in the supply of contract foodservices to business & industry customers in Norway  
based on the Parties’ turnover and the estimation of the total market size by [third 
party consulta nt] as explained above  in paragraph (91) and following .  
 
Table 14. The Parties’ market shares in supply of contract foodservices to business & 
industry customers in Norway in 2018 , 2017 and 2016  ([third party consu ltant]) 
 2018  2017  2016  
 Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  
Compass  […] [10-20]% […] [10-20]% […] [10-20]% 
Fazer FS  […] [5-10]% […] [10-20]% […] [10-20]% 
Combined  […] [20-30]% […] [20-30]% […] [20-30]% 
Total mar-
ket […] 100%  […] 100%  […] 100%  
 Source: Form CO, para. 556.  
(213)  The Parties verified the assumptions used in the [third party consulta nt] model and 
concluded that the average price per meal might be overstated. When using the Par-
ties’ price data instead of the [third party consulta nt] estimates, the Parties ’ com-
bined market would increase from [20-30]% to [20-30]%.294  
(214)  Table 15 presents the Parties’ estimate of their market shares in 2018 in the supply 
of contract foodservices to busines s & industry customers in Norway based on (i) the 
Parties’ turnover, (ii) the Parties’ estimate of their known competitors’ turnover 
based on public sources and (iii) the total market size calculated as the  total of the 
Parties’ own turnover and the estima ted known competitors’ turnover .295 
Table 15. The Parties’ market shares in supply of contract foodservices to business & 
industry customers in Norway in 2018  (estimated competitor turnover)  
 Market shares estimated in 2018  
Compass  [10-20]% 
Fazer  [10-20]% 
Parties combined  [20-30]% 
ISS [20-30]% 
Coor  [10-20]% 
                                                 
294  Form CO, Annex 7A -007, Table 1.  
295  See Notifying Party’s reply to RFI 13 of 20 Ja nuary 2020.  
 
 
51  Market shares estimated in 2018  
Sodexo  [10-20]% 
4Service (including the companies it 
acquired in 2019)296 [10-20]% 
Toma Gruppen  [0-5]% 
11 other competitors with an estimated 
market share of up to 2% each  [5-10]% 
Source: Notifying Party’s reply to RFI 1 3 of 20 January 2020 . 
(215)  The total market  size used to estimate these market shares was EUR […] million, 
whereas the total market size as estimate d by the [third party consulta nt] model was 
EUR […] million. The  Commission therefore acknowledges that the market share 
estimates provided by the Parties based on competitors ’ revenues might be overstat-
ed.  
(216)  In the course of the market investigation, the Commission has verified  the market  
share estimates of the Parties . To do this, the Commission has contacted the majority 
of significant  competitors who won tenders  in which one of the Parties  participated. 
While the verification in general confirms the broader picture, the Parties’ position 
seems to be stronger than the  market share estimate provided in the table above.297   
(217)  The Notifying Party submits  that, following  the Transaction, the merged entity will 
continue to be constrained by a number of significant competitors,  including  ISS, 
Coor,  Sodexo,  Toma Gruppen and 4Service , amongst others.298 Moreover, according 
to the Notifying Party, there has been a recent trend of market consolidation in the 
Norwegian business & industry segment, where competitors are strengthening their 
competition positions in contract foodservi ces, and will thereby exert an even 
stronger competitive constraint on the merged entity post -Transaction .299  
(218)  The Commission considers that the Transaction is unlikely to raise serious doubts as 
to its compatibility with the internal market for  the followin g reasons.  
(219)  First, as shown by the market investigation and demonstrated in Table 15 above, the 
Norwegian market for contract foodservices to business & industry customers is fea-
tured not only by large multi -national players such as ISS, Sodexo and Coor, b ut also 
by national  foodservice s suppliers like 4Service and Toma Gruppen as well as a 
number of smaller or local players.  Demonstrative of this point is the fact that the 
Parties’ tender data includes over [10-20] competitors , [information on the Parties’  
bidding data] .300 The large number of smaller suppliers is also capable of serving 
larger customers. For example, smaller competitors won several tenders worth up to 
EUR […] each. Furthermore, one national competitor won tenders worth EUR […] 
between 2014 and 2018.301 As demonstrated by the Parties’ data, these tenders are 
                                                 
296  See Notifying Party’s reply to RFI of 21 January 2020.  
297  Replies to Q3 – Questionnaire to Competitors in Norway, question 19.  
298  Form CO, para. 585.  
299  Form CO, para. 586.  
300  Form CO, paras. 568 et seq.  
301  Form CO, paras. 568 et seq.  
 
 
52 substantial ly based on value of the tender.302 For example, the average value of a 
tender lost by the Notifying Party between 2014  and 2018 was around EUR […].303 
(220)  Furthermore, evidence collected during the market investigation has show n that in 
selecting their contract foodservice s providers via tender processes, Norwegian busi-
ness & industry customers do not give preference to criteria  such as historical rela-
tionship with the cont ract foodservice s supplier. Customers give preference to the 
quality of the food, the price of the food and the nutritional value of the food, but al-
so to reputation and track -record of the supplier and efficient day -to-day opera-
tions.304 Contract foodservic es suppliers try to differentiate themselves from each 
other to win tenders on these parameters.305 Moreover, the results of the market in-
vestigation have show n that both competitors and customers see as the most im-
portant trends in the contract foodservices  in Norway in the next three years the fol-
lowing: customers prefer high -quality food over low -cost food offering; customers 
prefer high -quality food over multi -service solutions where food is provided together 
with other services such as cleaning; customer s demand healthy food with local in-
gredients and sustainable services; and customers see their canteen as a possibility to 
attract and retain employees.306 A trend towards customers favouring smaller or in-
dependent suppliers was also confirmed to some extent .307 
(221)  Customers in the business & industry segment will therefore continue to benefit 
from the ability to choose from an extensive number  of credible alternative bidders, 
which ranges from multi -national and national firms, to smaller local rivals. The 
Commis sion therefore  considers that post-Transaction, the Parties will continue to 
face significant competition from the other companies active in the business & in-
dustry  sector  in Norway . 
(222)  Second , barriers to entry into the market for contract foodservices to business & in-
dustry customers are low, especially for the companies already operating in the food 
sector in Norway . A new market entry requires limited resources  given that staff is 
typically  transferred to the winner of the tender, whereas kitchen facilities typically 
belong to the customer. This is supported by the results of the Commission’s market 
investigation, which show that the most important criteria for a new market entry  are 
(i) the  existence of management staff with experience in the contract foodservices 
industry and  (ii) knowledge of the contract foodservices industry and how to organ-
ise day -to-day operations .308 In addition, the majority of competitors responding to 
the Commission’ s market investigation explained that it would be easy for them to 
find suitable food suppliers for their contract foodservices operations in Norway.309 
                                                 
302  Form CO, paras. 568 et seq.  
303  Own calculation based on Form CO, para. 568.  
304  Replies to Q3 – Questionnaire to Co mpetitors in Norway, question 20; Replies to Q7 – Questionnaire to 
Customers in Norway, question 14.  
305  Replies to Q3 – Questionnaire to Com petitors in Norway, question 21; Replies to Q7 – Questionnaire to 
Customers in Norway, question 15.  
306  Replies to Q3 – Quest ionnaire to Competitors in Norway, question 24; Replies to Q7 – Questionnaire to 
Customers in Norway, question 18.  
307  Replies to Q3 – Questionnaire to Competitors in Norway, question 24; Replies to Q7 – Questionnaire to 
Customers in Norway, question 18.  
308  Replies to Q3 – Questionnaire to Competitors in Norway, question 35; Replies to Q7 – Questionnaire to 
Customers in Norway, question  31.  
309  Replies to Q3 – Questionnaire to Competitors in No rway, question 36.  
 
 
53 The Commission’s findings in relation to low entry barriers on the supply side are 
also supported by the fact that all  of the Norwegian  competitors responding to the 
Commission’s market investigation believe that a company can enter the Norwegian  
market and start offering contract foodservices with a contract for a sing le canteen or 
only one customer.310 
(223)  Third, on the demand side, there are no significant barriers to switching between 
contract foodservices suppliers in the business & industry sector in Norway . The ma-
jority of competitors responding to the market investigation explained that the ma-
jority of  business & industry customers switches their contract foodservices supplier 
after the contract is terminated, when the contract  would be re -tendered and awarded 
to another supplier.311 While  the majority of customers responding to the market in-
vestigation explained  that they had not switched their cont ract foodservices supplier 
in the last five years ,312 it was confirmed that it was easy for them to find a suitable 
supplier of contract foodservices or to switch to a different supplier of contract food-
services.313 This ability to switch strengthens the competitive constraints on the Par-
ties post -Transaction and contributes to the dynamic and competitive environment in 
the Norwegian  business & industry segment.  
(224)  Fourth, the market investigation provided indications that customers of contract 
foodservices may sponsor new entry or expansion of other, in particular smaller, 
contract foodservice s suppliers. This can be done by determining the contract details 
as well as the scope of the foodservices contract, for example , by splitting their ten-
ders into smaller lots.   
(225)  The majority of respondents to the market investigation confirmed that the condi-
tions of the foodservice s contracts (i.e. quality of the food, price, termination claus-
es) are determined by the customers in t he business & industry segment in Nor-
way.314 In general, it seems that the larger the customer, the higher the ability to ne-
gotiate the conditions.315  
(226)  As explained, c ustomers  also have the possibility to structure their tender in separate 
tenders for contract  foodservices for each of their canteens or sites. Furthermore, 
they have the possibility to split their tenders into smaller lots to increase competi-
tion and promote smaller contract foodservices suppliers. The market investigation 
has shown that these po ssibilities are used by some customers .316 The majority of re-
spondents to the market investigation also confirmed that Norwegian customers in 
the business & industry sector use one or more of the following tactics to achieve 
better contract terms: the sugges tion to take the foodservice s in-house, to terminate 
                                                 
310  Replies to Q3  – Questionnaire to Competitors in Norway, question 37.  
311  Replies to Q3 – Questionnaire to Competitors in Norway,  question 34.  
312  Replies to Q 7 – Questionnaire to Customers in Norway, question 28.  
313  Replies to Q 7 – Questionnaire to C ustomers in Norway , question 26. 
314  Replies to Q3 – Questionnaire to Competitors in Norway, question 32; Replies to Q7 – Questionnaire to 
Customers in Norway, question 25.  
315  Replie s to Q3 – Questionnaire to Competitors in Norway, question 32; Replies to Q7 – Questionnaire to 
Customers in Norway, question 27.  
316  Replies to Q3 – Questionnaire to Competitors in Norway, question 31; Replies to Q7 – Questionnaire to 
Customers in Norway, question 24.  
 
 
54 the contract and retender and/or to split the tender into smaller lots which may be 
tendered to different suppliers.317 
(227)  Fifth, the Commission’s assessment of the effects of the Transaction has also take n 
into account the fact that other lunch food options are available to the staff in the 
business & industry sector compared to lunch in the on -site canteen. The majority of 
respondents to the market investigation considered that bringing lunch from home 
would be the preferred alternative lunch food option, followed by eating lunch at an 
outside restaurant or eating a snack or sandwich that was not bought at the on -site 
canteen.318 The Commission therefore considers that these out -of-market constraints 
will hav e an effect on the merged entity’s continued incentive to deliver good quality 
and price ratio to their customers post -Transaction.  
(228)  Finally, the majority of respondents to the market investigation having expressed a 
view considered that the Transaction wo uld have no effect on competition in the 
business & industry segment in Norway.319 The majority of competitors having ex-
pressed a view consider ed that there w ould be sufficient competition in the Norwe-
gian business & industry  sector  following the Transaction .320 This was confirmed by 
the majority of customers responding to the market investigation, who did not con-
sider that the Transaction would have an impact on their company. One customer 
explained that “based on the last tender it held in the fall of 2019, [ the company] 
sees the market as very competitive. As a result, it does not foresee any impact on 
competition as a result of the Transaction.”321 
(229)  Therefore, taking the above  considerations into account, the Commission considers 
that the Parties will face sign ificant competition in the business & industry segment 
in Norway post -Transaction  and that the competitive constraints on the Parties in the 
supply of contract foodservices to business & industry customers in Norway would 
be sufficient.  
Concl usion  
(230)  In light  of the results of the market investigation and considering the evidence avail-
able to it , the Commission concludes  that the Transaction does not raise serious 
doubts as to its compatibility with the internal market with respect to  the market for 
the supply  of contract foodservices to business & industry customers in Norway.  
7.1.7.  Finland  
7.1.7.1.  Overview o f the contract foodservices industry in Finland  
(231)  In addition to the multi -national companies ISS and Sodexo  referred to in paragraph 
(78) and following above , several national companies are active in the provi sion of  
                                                 
317  Replies to Q3 – Questionnaire to Competitors in Norway, question 33; Replies to Q7 – Questionnaire to 
Customers in Norway, question 30.  
318  Replies to Q3 – Questionnaire to Competitors in Norway, question 23; Replies to Q7 – Questionnaire to  
Customers in Norway, question 17.  
319  Replies to Q3 – Questionnaire to Competitors in Norway, question 46; Replies to Q7 – Questionnaire to 
Customers in Norway, question 37.  
320  Replies to Q3 – Questionnaire to Competitors in Norway, question 45.  
321  Replie s to Q7 – Questionnaire to Customers in Norway, question 36.  
 
 
55 contract foodservices  in Finland . Among the larger national suppliers are Antell -
Catering and Palmia.  
(232)  Antell -Catering was founded in Finland in 1880. According to the Notifying Party, it 
is one of most well -known family -owned food brands in Finland. In 2017, Antell -
Catering had a group turnover of EUR 524 million.322  
(233)  Palmia was founded in 2003 and is active  in providing facilities management and 
contract foodservices. It has expanded in 2018 and 2019 and acquired two contract 
foodservices and facilities management providers.323 
7.1.7.2.  Contract foodservices to business & industry customers in Finland  
(234)  Table 16  presents  the Parties’ estimate of their market shares in 2018 , 2017 and 2016  
in the supply of contract foodservices to business & industry customers in Finland  
based on the Parties’ turnover and the estimation of the total market size by [third 
party consulta nt] as explained above.  
Table 16. The Parties’ market shares in supply of contract foodservices to business & 
industry customers in Finland in 2018 , 2017 and 2016  ([third party consultant ]) 
 2018  2017  2016  
 Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  Revenue  
(€ millions)  Share  
Compass  […] [0-5]% […] [5-10]% […] [0-5]% 
Fazer FS  […] [20-30]% […] [20-30]% […] [20-30]% 
Combined  […] [30-40]% […] [30-40]% […] [30-40]% 
Total mar-
ket […] 100%  […] 100%  […] 100%  
Source: Form CO, para. 620.  
(235)  The Parties verified the assumptions used in the [third party consulta nt] model and 
concluded that the average price per meal might be overstated. When using the Par-
ties’ price data instead of the [third party consulta nt] estimates, the Parties ’ com-
bined market would increase  from [30-40]% to [30-40]%.324  
(236)  Table 17 present s the Parties’ estimate of their market shares in 2018 in the supply 
of contract foodservices to business & industry customers in Finland  based on  (i) the 
Parties’ turnover, (ii) the Parties’ estimate of their know n competitors’ turnover 
based on public sources and (iii) the total market size calculated as the total of the 
Parties’ own turnover and the estimated known competitors’ turnover .325 
 
 
                                                 
322  Form CO, para. 522. 
323  Form CO, para. 522. 
324  Form CO, Annex 7A -007, Table 1.  
325  See Notifying Party’s r eply to RFI 12 of 14 January 2020.  
 
 
56 Table 17. The Parties’  market shares in supply of contract foodservices to business & 
industry customers in Finland in 2018  (estimated competitor turnover)  
 Market shares estimated in 2018  
Compass  [5-10]% 
Fazer  [40-50]% 
Parties combined  [40-50]% 
Sodexo  [10-20]% 
Antell -Catering  [10-20]% 
Leijona Catering  [5-10]% 
ISS [5-10]% 
Palmia  [0-5]% 
9 other competitors with an estimated 
market share of up to 2% each  [5-10]% 
Source: Notifying Party’s reply to RFI 13 of 20 January 2020 . 
(237)  According to the Parties, Leijona Catering Oy was founded in 2012 and is 100% 
owned by the Finnish Government. Leijona Catering would hold a number of high 
profile contracts, including all catering contracts for the Finnish Armed Forces and 
the Criminal Sa nctions Agency.326 Since Leijona Catering is 100% owned by the 
Finnish Government, it might be questionable if Leijona Catering is active on a con-
tract foodservices market  providing services to third parties  or rather an in -house 
provider of contract foodser vices . The Commission has therefore recalculated the 
market share estimates provided by the Parties by excluding the estimated turnover 
of Leijona Catering. Without Leijona Catering ’s turnover , the Parties’ combined 
market share amounts to [50-60]%, the bi ggest competitors being Sodexo with an es-
timated market share of [10-20]% and Antell -Catering with an estimated market 
share of [10-20]%. Considering that the market share estimates and therefore the po-
sition of the Parties in the Finnish market for the su pply of contract foodservices to 
business & industry customers does not change significantly, irrespective of whether 
Leijona Catering is included or not, the question whether or not Leijona Catering is a 
competitor of the Parties can be left open.  
(238)  The to tal market size used to estimate these market shares was around EUR [...] mil-
lion, whereas the total market size as estimate d by the [third party consultant]  model 
was EUR […] million. The Commission therefore acknowledges that the market 
share estimates p rovided by the Parties based on competitors ’ revenues might be 
overstated.  
(239)  In the course of the market investigation, the Commission has verified  the market  
share estimates of the Parties . To do this, the Commission has contacted the majority 
                                                 
326  See Notifying Party’s reply to RFI of 21 January 2020.  
 
 
57 of significant  competitors who won tenders in which one of the Parties participated. 
The verification confirms the broader picture of the Parties’ position as the market 
leader with a clear  difference to the next in line competitors.327  
(240)  The Notifying Party submits that, following  the Transaction, the merged entity will 
continue to be constrained by a number of significant competitors, including  Sodexo, 
ISS, Antell -Catering  and Palmia.  Moreover, according to the Notifying Party, the 
merged entity will continue t o face competition from  a large number of smaller, lo-
cal competitors.328 In addition, barriers to entry and expansion would be low and 
there would be strong constraints on the merged entity through buyer power as well 
as out -of-market constraints, such as re staurants.329 
(241)  Despite the somewhat high combined market shares of the Parties post -Transaction 
and the clear lead over the next in lin e competitors, the Commission considers that 
the Transaction is unlikely to raise serious doubts as to its compatibility wit h the in-
ternal market for  the following reasons.  
(242)  First, the increment brought about by the Transaction is moderate. In addition, as 
shown by the market investigation and demonstrated in Table 17 above, the Finnish 
market for contract foodservices to busin ess & industry customers is featured not on-
ly by large multi -national players such as Sodexo  and ISS, but also by national  food-
service s suppliers like Antell -Catering as well as a  number of smaller or local play-
ers like Palmia , Juvenes, and Theron Group. Demonstrative of this point is the fact 
that the Parties’ tender data includes over [10-20] competitors, [information on the 
Parties’ bidding data] .330 The large number of smaller suppliers is also capable of 
serving larger customers. For examp le, smaller competitors won several tenders 
worth more than EUR […] between 2014 and 2018.331 As demonstrated by the Par-
ties’ tender data, these tenders are substantial ly based on value of the tender.332 For 
example, the average value of a tender lost by the N otifying Party between 2014 and 
2018 was around EUR […].333 
(243)  Furthermore, evidence collected during the market investigation shows that in select-
ing their contract foodservice s providers via tender processes, Finnish  business & 
industry customers do not give preference to the historical relationship with the con-
tract foodservice s supplier. Customers give preference to the quality of the food, the 
price of the food and the nutritional value of the food, but also to reputation and 
track -record of the supplier, efficient day -to-day operations  and a contract foodser-
vices package that is adapted to the customer’s specific needs .334 Contract foodser-
vices suppliers try to differentiate from each other to win tenders on these parame-
ters.335 Moreover, the result s of the market investigation have show n that both com-
                                                 
327  Replies to Q2 – Questionnaire to Competitors in Finland, question 19.  
328  Form CO , para. 522 . 
329  Form CO, paras. 528 et seq . 
330  Form CO, paras. 502 et seq.  
331  Form CO, para. 527. 
332  Form CO, para. 502.  
333  Own calculation based on Form CO, para . 502. 
334  Replies to Q2 – Questionnaire to Competitors in Finland, question 20; Replies to Q6 – Questionnaire to 
Customers in Finland, question 14.  
335  Replies to Q2 – Questionnaire to Competitors in Finland, question 21; Replies to Q5 – Questionnaire to 
Customers in Finland, question 15.  
 
 
58 petitors and customers see as the most important trends in the contract foodservices 
in Finland  in the next three years the following: (i) customers prefer high -quality 
food over low -cost food offering; (ii) customers demand healthy food with local in-
gredients and sustainable services; and (iii) customers see their canteen as a possibil-
ity to attract and retain employees.336 A trend towards customers favouring smaller 
or independent suppliers was also confi rmed to some extent.337 One customer ex-
plained  that “[t]he importance of small local service providers is increasing and the 
importance of big once (sic) decreasing .”338 
(244)  Customers in the business & industry segment will therefore continue to benefit 
from the a bility to choose from an extensive number  of credible alternative bidders, 
which ranges from multi -national and national firms, to smaller local rivals. The 
Commission, therefore,  considers that post-Transaction, the Parties will continue to 
face significa nt competition from the other companies active in the business & in-
dustry  segment in Finland . 
(245)  Second , barriers to entry into the market for contract foodservices to business & in-
dustry customers are higher in Finland than in Denmark, Norway and Sweden. In 
Finland, contrary to Sweden, Norway and Denmark, the chefs and staff do not nec-
essarily transfer with the contract. According to the Notifying Party , in Finland, the 
transfer of the contract does not necessarily constitute the transfer of an undertaking 
because assets (including kitchen equipment) are not transferred to the new operator. 
The Parties have , for example , explained that they remove their tills, ovens etc. in 
Finland following  the termination of a contract.339 However, the  barriers to entry into 
the market for contract foodservices to business & industry customers  in Finland  are 
still low, especia lly for the companies already operating in the food sector in Fin-
land.  
(246)  According to the Notifying Party, the recruitment of staff would not be a barrier to 
entry or expansion because there is sufficient time to plan for recruitment between 
the tender anno uncement and the start of the contract, which would be at least 6 to 
20 weeks, depending on the tender. In the Parties’ experience, the usual length of 
time needed for hiring a head chef would be four to eight week s. In addition, there 
would be a wide rang e of low -cost recruitment methods.340 This has been  broadly 
confirmed  by the Commission’s market investigation , which shows  that the most 
important criteria for a new market entry  in Finland are (i) the existence of manage-
ment staff with experience in the co ntract foodservices industry and (ii) knowledge 
of the contract foodservices industry and how to organise day -to-day operations.341 
In addition, the majority of competitors responding to the Commission’s market in-
vestigation explained that it would be easy f or them to find suitable food suppliers 
for their contract foodservices operations in Finland .342 The Commission’s findings 
in relation to low entry barriers on the supply side are al so supported by the fact that 
                                                 
336  Replies to Q2 – Questionnaire to Competitors in Finland, question 24; Replies to Q5 – Questionnaire to 
Customers in Finland, question 18.  
337  Replies to Q2 – Questionnaire to Competitors in Finland, question 24; Replies to  Q5 – Questionnaire to 
Customers in Finland, question 18.  
338  Replies to Q6 – Questionnaire to Customers  in Finland , question 38.  
339  Form CO, para. 1075.  
340  Form CO, para. 1075 et seq.   
341  Replies to Q2 – Questionnaire to Competitors in Finland, question 35 ; Replies to Q6 – Questionnaire to 
Customers in Finland, question 31.  
342  Replies to Q2 – Questionnaire to Competitors in Finland, question 36.  
 
 
59 a majority of the Finnish  competitors responding to the Commission’s market inves-
tigation believe that a company can enter the Finnish  market and start offering con-
tract foodservices with a contract for a single canteen or only one customer.343  
(247)  Third, on  the demand -side, there are no significant barriers to switching between 
contract foodservices suppliers in the business & industry sector in Finland . The ma-
jority of competitors responding to the market investigation explained that the ma-
jority of business & industry customers switc hes their contract foodservices supplier 
after the contract is terminated, when the contract  would be re -tendered and awarded 
to another supplier.344 While  the majority of customers responding to the market in-
vestigation explained  that they had not switched their cont ract foodservices supplier 
in the last five years ,345 they confirmed that it was (somewhat) easy for them to find 
a suitable supplier of contract foodservices or to switch to a different supplier of con-
tract foodservices.346 This ability to switch st rengthens the competitive constraints 
provided by customers  and contributes to the dynamic and competitive environment 
in the Finnish  business & industry segment.  
(248)  Fourth, the market investigation provided indications that customers of contract 
foodservices  may sponsor new entry or expansion of other, in particular smaller, 
contract foodservice s suppliers. This can be done by determining the contract details 
as well as the scope of the foodservices contract, for example by splitting their ten-
ders into smalle r lots.  
(249)  The majority of respondents to the market investigation confirmed that the condi-
tions of the foodservice s contracts (i.e. quality of the food, price, termination claus-
es) are determined by the customers in the business & industry segment in Fin-
land.347 In general, it seems that the larger the customer, the higher the ability to ne-
gotiate the conditions.348  
(250)  As explained, c ustomers also have the possibility to structure their tender in separate 
tenders for contract foodservices for each of their canteens  or sites. Furthermore, 
they have the possibility to split their tenders into smaller lots to increase competi-
tion and promote smaller contract foodservices suppliers. The market investigation 
has shown that these possibilities are used by some customers .349 The majority of re-
spondents to the market investigation confirmed that Finnish  customers in the busi-
ness & industry sector use the tactic of suggest ing the potential  terminat ion of  the 
contract , re-tender ing and award of the contract to other suppliers.350 In addition, 
some of the respondents explain ed that in order to facilitate the tender process, Finn-
                                                 
343  Replies to Q2 – Questionnaire to Competitors in Finland, question 37.  
344  Replies to Q2 – Questionnaire to Comp etitors in Finland, question 34.  
345  Replies to Q6 – Questionnaire to Customers in Finland, question 28.  
346  Replies to Q6 – Questionnaire to Customers in Finland, question 26; Replies to Q9 – Questionnaire to 
Brokers, question 19.  
347  Replies to Q2 – Questio nnaire to Competitors in Finland, question 32; Replies to Q6 – Questionnaire to 
Customers in Finland, question 25; Replies to Q9 – Questionnaire to Brokers, question 16.  
348  Replies to Q2 – Questionnaire to Competitors in Finland, question 32; Replies to Q6  – Questionnaire to 
Customers in Finland, question 27; Replies to Q9 – Questionnaire to Brokers, question 18.  
349  Replies to Q2 – Questionnaire to Competitors in Finland, question 31; Replies to Q6 – Questionnaire to 
Customers in Finland, question 24; Replies to Q9 – Questionnaire to Brokers, question 15.  
350  Replies to Q2 – Questionnaire to Competitors in Finland, question 33; Replies to Q6 – Questionnaire to 
Customers in Finland, question 30; Replies to Q9 – Questionnaire to Brokers, question 20.  
 
 
60 ish business & industry customers  tend to  hire brokers that are capable to advise 
them on how to better structure tenders to extract more favourable terms.351   
(251)  Fifth, the Commission’s assessment of the effects of the Transaction also takes into 
account the fact that other lunch food options than on -site canteen s are available to 
the staff in the business & industry sector. The majority of respondents to the market 
investigation considered that bringing lunch from home would be the preferred alter-
native lunch food option, followed by eating lunch at an outside restaurant  or eating  
a snack or sandwich that was not bought at the on-site canteen .352 The Commission 
therefore considers that these out -of-market constraints will have an effect on the 
merged entity’s continued incentive to deliver good quality and price ratio to their 
customers post -Transaction.  
(252)  Finally, t he majority of respondents to the market investi gation having expressed a 
view considered that the Transaction would have no effect on competition  in the 
business & industry segment in Finland .353 The majority of competitors were also of 
the view that there will be sufficient competition in the Finnish business & industry  
sector  following the Transaction.354 Indeed, as noted by one of the competitors , 
“[t]he transaction does not change the competitive situation in the market signifi-
cantly since Compass is small today .”355 This was confirmed by the majority of cus-
tomers responding to the market investigation who considered that the Transaction 
would have no impact on their company.356 Furthermore, as noted by one respondent 
“I think in Finland there might be more possibilities for the smaller catering compa-
nies to  win more tender processes. Fazer has had a very good name and reputation 
on the market based on the Fazer heritage (mainly chocolate). Compass does not 
have such a good reputation in Finland .”357 
(253)  Therefore, taking the above  considerations into account, the Commission considers 
that the Parties will face significant competition in the business & industry segment 
in Finland  post-Transaction  and that the competitive constraints on the Parties in the 
supply of contract foodservi ces to business & industry customers in Finland  would 
be sufficient.  
Conclusion  
(254)  In light of the results of the market investigation and considering the evidence avail-
able to it , the Commission concludes  that the Transaction does not raise serious 
doubts as  to its compatibility with the internal market with respect to  the market for 
the supply of contract foodservices to business & industry customers in Finland .  
                                                 
351  Replies to Q2 – Questionnaire to Competitors in Finland, question 30; Replies to Q6 – Questionnaire to 
Customers in Finland, question 23.  
352  Replies to Q2 – Questionnaire to Competitors in Finland, question 23; Replies to Q6 – Questionnaire to 
Customers in  Finland, question 17.  
353  Replies to Q2 – Questionnaire to Competitors in Finland, question 46; Replies to Q6 – Questionnaire to 
Customers in Finland, question 37; Replies to Q9 – Questionnaire to Brokers, question 26.  
354  Replies to Q2 – Questionnaire to C ompetitors in Finland, question 45.  
355  Replies to Q2 – Questionnaire to Competitors in Finland, question 45.  
356  Replies to Q6 – Questionnaire to Customers in Finland, question 36.  
357  Replies to Q9 – Questionnaire to Brokers, question 26.  
 
 
61 7.1.8.  The Transaction’s effects on public tenders  
(255)  For Sweden and Denmark, a concern regarding public t enders  was expressed by 
some respondents  in the market investigation . It was claimed that public tenders 
would be awarded based on lowest price. Post-Transaction, t he Parties would be able 
– due to their increased size – to obtain food products at  lower pr ices than their com-
petitors and to offer , ultimately,  lower prices to customers , making it difficult for 
competitors to compete with them on price in the public tenders. Finally, competitors 
would have to leave the market (s).358  
(256)  The market investigation con firmed that it is easy for the providers of contract food-
services to find suitable food suppliers for their contract foodservices operations in 
their respective country359 and that the Parties would not have the ability and/or the 
incentive to restrict their  competitors’ access to food suppliers necessary to provide 
contract foodservices post -Transaction.360  
(257)  The market investigation also confirmed in general that the foodservice s supplier’s 
size is important when acquiring food products from suppliers in their respective 
country.361 One competitor explained the following “Volume drives price up or 
down. Volume is essential in order to obtain best price which, as emphasized above, 
is the greatest competitive edge for suppliers. ” On the other hand, the size of the 
foodservice s supplier is not the only decisive factor when negotiating good price 
conditions from food product suppliers. In that regard, a nother competitor explained 
that volumes are not the only factor to obtain  good prices: “It is easier to negotiate 
good prices if you have a substantial size but it also depends on how good you are at 
negotiating ; -)”.362  
(258)  The Commission considers that the allegation  according to which the me rged entity 
would be able to force competitors out of the market because of their ability to offer 
lower prices in public tenders  is unfounded  for the following reasons .  
(259)  First, out of the Parties’  total revenue in the business & industry sectors in Sweden  
and Denmark, the Parties only achieve around […]% of their total revenue in 2018 
as well as 2017 with contracts following public tenders (public administration and 
public companies).363 It can therefore be concluded, that a very big proportion of the 
busine ss & industry  contract foodservices revenues of the Parties  in Sweden and 
Denmark is made with private companies , which, even if the above -mentioned claim 
were  correct, would be open to competitors .   
                                                 
358  Replies to Q1 – Questionnaire to Competitors in Sweden, question 88; Replies to Q4 – Questionnaire to 
Competitors in Denmark, question 61.  
359  Replies to Q1 – Questionnaire to Competitors in Sweden, question 84; Replies to Q2 – Questionnaire to 
Competitors in Finland, que stion 36; Replies to Q3 – Questionnaire to Competitors in Norway, question 
36; Replies to Q4 – Questionnaire to Competitors in Denmark, question 57.  
360  Replies to Q1 – Questionnaire to Competitors in Sweden, question 88; Replies to Q2 – Questionnaire to 
Competitors in Finland, question 40; Replies to Q3 – Questionnaire to Competitors in Norway, question 
40; Replies to Q4 – Questionnaire to Competitors in Denmark, question 61.  
361  Replies to Q1 – Questionnaire to Competitors in Sweden, question 87; Replies to  Q2 – Questionnaire to 
Competitors in Finland, question 39; Replies to Q3 – Questionnaire to Competitors in Norway, question 
39; Replies to Q4 – Questionnaire to Competitors in Denmark, question 60.  
362  Replies to Q1 - Questionnaire to Competitors in Swede n, question 87;  Replies to Q4 – Questionnaire to 
Competitors in Denmark, question 60 . 
363  Notifying Party’s r eply to RFI 12 of 14 January 2020.  
 
 
62 (260)  Second , as explained above, in selecting their contract  foodservices supplier, cus-
tomer s in general take into account several parameters , of which price is only one .364 
This is further evidenced by the general trend towards high -quality food over low -
cost food offering and healthy food with local ingredients and  sustainable services as 
confirmed in the market investigation.365  
(261)  Third, it is uncertain whether the merged entity will have the ability to obtain lower 
prices on food products and therefore offer lowest prices in public tenders. T he 
Transaction envisage s an annualised purchasing synergy of EUR […] million  in the 
entire Nordic region.366 The Notifying Party explained that this was based on an as-
sumption [Notifying Party’s internal business strategy] .367 However, t he cost base 
for the provision of any foodservic es contract would include  not only the cost of in-
gredients, but also labour cost at the restaurant level and other restaurant level ad-
ministrative costs (for example site -specific IT or rent). Of these cost s, in most cases 
labour costs would be  the highest  cost. The Parties explained that many of their 
competitors would already offer prices […] in public bids.368  
(262)  Fourth, smaller competitors have the possibility to achieve cost savings when buying 
ingredients  by joining purchasing cooperatives . For Denmark, t he Parties explained 
that they are aware of the Samhandel purchasing cooperative, which could be joined 
by paying an enrolment fee of less than EUR 1  500.369 For Sweden, the Parties ex-
plained that they are aware of three large purchasing cooperatives in Swed en that 
foodservice s providers could join: Nores, Svenska Krögare and Krogdirekt. These 
purchasing cooperatives would be easy to join and had thousands of members in-
cluding small restaurants and contract foodservices suppliers. The purchasing coop-
erative N ores would have more than 1  000 members in Sweden, including the food-
service s provider Sodexo. Me mbers of Nores would be  expected to pay a deposit of 
around EUR 2  000 and to have certain annual purchasing volumes through the pur-
chasing cooperative.  Krogdirekt would claim that its members benefit from purchas-
ing savings of up to 30%. To join Krogdirekt, only a small annual fee of less than 
EUR 600 would need to be paid.370   
                                                 
364  Replies to Q1 – Questionnaire to C ompetitors in Sweden, question s 22, 27, 32, 37 and 40 ; Replies to Q5 – 
Quest ionnaire to Customers in Sweden, questions 17, 22, 27, 32 and 35; Replies to Q 4 – Questionnaire to 
Competitors in Denmark, questions 21 and 26; Replies to Q8 – Questionnaire to Customers in Denmark, 
question 16  and 21 . This is further confirmed by the Parties’ analysis of the judging criteria of the total 
public contracts tendered in 2018 in the business & industry segments in Sweden and Denmark and the 
education segment in Denmark as well as the analysis of the tenders  won by one of the Parties in the 
healthcare & welfare segment and the education segment in Sweden. This data shows that in less than 
50% of the respective contracts in the respective segment, the award of the contract was explicitly solely 
based on price or price had the highest weighting (but even in those tenders where price had the highest 
weighting, price was not necessarily the decisive factor), see Notifying Party’s reply to RFI 12 of 14 Janu-
ary 2020, question 2.  
365  Replies to Q1 – Questionnaire to C ompetitors in Sweden, questions 26, 31, 36, 39 and 42; Replies to Q5 – 
Questionnaire to Customers in Sweden, questions 21, 26, 31, 37 and 34; Replies to Q 4 – Questionnaire to 
Competitors in Denmark, question 2 5 and 30 ; Replies to Q8 – Questionnaire to Cust omers in Denmark, 
question 20 and 25. 
366  See Form CO, Annex 5.4.A -002, Compass , [Notifying Party’s internal document]  of 26 May 2019 .  
367  Notifying Party’s reply  to RFI 12 of 14 January, question 3.  
368  Notifying Party’s reply  to RFI 12 of 14 Jan uary, quest ion 4.  
369  Notifying Party’s reply  to RFI 12 of 14 January, question 5.  
370  Notifying Party’s reply to RFI 12 of 14 January, question 5, based on the following public sources: 
https://www nores.se/ , https://krogare.se/ , https://krogdirekt.com/ ,https://www.samhandel.dk/forside.aspx .  
 
 
63 7.2. Conglomerate effects  
(263)  Pursuant to the Non-Horizontal Merger Guidelines,371 in mos t circumstances, con-
glomerate mergers do not lead to any competition problems. However, foreclosure 
effects may arise in conglomerate mergers when the combination of services in re-
lated markets may confer on the merged entity the ability and incentive to l everage a 
strong market position from one market to another by means of tying or bundling or 
other exclusionary practices. Those practices are common and often have no anti-
competitive consequences, as companies may engage in tying and bundling in order 
to provide their customers with better products or offerings in cost -effective ways.372 
However, in certain specific cases, conglomerate effects may harm competition.  
(264)  In the present case, as c ontract foodservices are sometimes tendered out together 
with non-food related services  (i.e. other support services such as cleaning services ), 
the Transaction may have a conglomerate dimension .  Compass supplies  contract 
foodservices  together with other support services  in Sweden, Denmark, Norway and 
Finland . However, Faz er FS does not provide multi -service contracts in Denmark, 
Sweden and Norway and Fazer FS  is only marginally active in multi -service con-
tracts  in Finland .373  
(265)  In order to assess the likelihood of such possible  anticompetitive foreclosure strate-
gies, the Commission will examine whether the merged entity has (i) the ability to 
foreclose and (ii) the incentives to foreclose  competing suppliers from providing 
contract foodservices to customers . Lastly, the Commission will assess whether such 
practices may hav e a significant negative impact on competition  by limiting more 
cost-effective supplie rs, and/or reducing choice for customers .374  
7.2.1.  Ability to foreclose  
(266)  The Commission considers that the Parties  will not gain any ability, post -
Transaction, to engage in a str ategy of tying or bundling its contract foodservices 
with other support  services in Denmark, Finland, Norway or Sweden . First, the 
merged entity will lack the market power  on any of the markets concerned to engage 
in such a strategy. More specifically, in any of Denmark, Finland, Norway or Swe-
den, the Parties’ combined share of supply in support services (or any potential  seg-
ment thereof,  such as cleaning) is below 10% ,375 and although the Parties’ combined 
share is significant in some markets for contract fo odservices, customers will contin-
ue to have the ability to choose from an extensive list of credible contract foodser-
vices suppliers.  Second, there is a small proportion of multi -service contracts in 
Sweden , Denmark, Norway and Finland . The majority of  customers in Denmark, 
Finland, Norway and Sweden indicated that they tender out contract foodservices 
separately  from other support services.376 By way of example, the table below shows 
                                                 
371 Guidelines on the assessment of non -horizontal mergers under  the Council Regulation on the control of 
concentrations between undertakings (‘Non -Horizontal Merger Guidelines’), OJ C 265/6, 18.10.2008 . 
372  Non-Horizontal Merger Guidelines, para . 93.  
373  The support services provided by Fazer in Finland amounted to […] of its annual sales in Finland.   
374  Non-Horizontal Merger Guidelines, para . 94.  
375  See Notifying Party’s reply to RFI 9  of 18 December 2019 , question 2 . 
376  Replies to Q8 – Questi onnaire to Customers in Denmark, question 62; Replies to Q6 – Questionnaire to 
Customers in Finland, question 34; Replies to Q7 – Questionnaire to Customers in Norway, question 34; 
Replies to Q5 – Questionnaire to Customers in Sweden, questions 98, 100, 10 2, 104, 106 and 108.  
 
 
64 the number of foodservice -only contracts and the number of multi -service contracts 
provided by Compass in the fiscal year 2017/2018.  
Table 18 - Compass food -only contracts and multi -service contracts in fiscal  year 
2017/2018  
Segment  Norway  Sweden  Denmark  Finland  
Food -
only 
contracts  Multi -
service 
contracts  Food -
only 
contracts  Multi -
service 
contracts  Food -
only 
contracts  Multi -
service 
contracts  Food -
only 
contracts  Multi -
service 
contracts  
Business & 
industry  […] […] […] […] […] […] […] […] 
Education  […] […] […] […] […] […] […] […] 
Healthcare 
& welfare  […] […] […] […] […] […] […] […] 
Defence  […] […] […] […] […] […] […] […] 
Source: Form CO, Table 127 . 
7.2.2.  Incentive to foreclose  
(267)  The incentive to foreclose rivals through bundling or tying depends on the degree to 
which this strategy is profitable. The Commission considers that the merged entity 
would have no incentive post -Transaction to favour any tied or bundled offer to the 
detriment of foodservices -only contracts  in any of Denmark, Finland, Norway or 
Sweden . Indeed, the value of the support services part of multi -service contracts is 
small relative to the foodservices part  and they are often only provided for the cus-
tomer’s conv enience rather than profitability reasons .377 The Parties have no reason 
to risk losing foodservices -only contracts by trying to link them with support ser-
vices for such a small return. Second, the Parties have no incentive to tie or bundle 
contract foodserv ices with other support services, because  customers have the power 
to design their tenders to achieve the best competitive outcome for them. If the 
merged entity insisted on tying or bundling  support services to contract foodservices, 
in most cases, it wou ld not fulfil  the tender requirements  and the customer would 
likely reject the  merged entity from the tender process  and choose among the large 
number of credible alternatives available .  
7.2.3.  Overall impact on competition  
(268)  The Commission considers that the Transaction is unlikely to have an overall nega-
tive impact on competition in the markets for contract foodservices and other  support 
services, as any bundling or tying strategy is unlikely to reduce the ability and incen-
                                                 
377  Form CO, para. 870.  
 
 
65 tives to compete of the significant competing providers that are active in the EEA. 
Customers will continue to have immediate access to competitive contract foodser-
vices and other  support  services on a standalone basis. For example, there are more 
than 2  000 cleaning service suppliers  in Sweden and 4  000 cleaning companies in 
Finland .378 Even if the customer did accept  the tied or bundl ed products, the merged 
entity would still face competition from other firms with the same  capacity to pro-
vide multi -service co ntracts, such as ISS, Sodexo and Coor. Overall, the Commis-
sion is of the view that the effects of any hypothetical tying or bundling strategy is 
unlikely to have a negative impact on prices and choice  in any of Denmark, Finland, 
Norway or Sweden . 
Conclusio n 
(269)  In light of the above  considerations and taking account of the results of the market 
investigation , the Commi ssion concludes  that the Transaction does not raise serious 
doubts as to its compatibility with the internal market with respect to conglomerate 
effects  in Denmark, Finland, Norway and Sweden  as the merged entity would have 
neither the ability, nor it is likely to have the incentive, to foreclose competitors 
through a bundling/tying strategy . 
8. CONCLUSION  
(270)  For the above reasons, the Commission has dec ided not to oppose the notified opera-
tion and to declare it compatible with the internal  market and with the EEA Agree-
ment. This decision is adopted in application of Article 6(1)(b) of the Merger Regu-
lation and Article 57 of the EEA Agreement .  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President  
 
 
                                                 
378  Form CO, para . 873.