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,  29.8.2019   
C(2019 ) 6359 final  
PUBLIC VERSION   
 
To the notifying parties  
Subject : Case M.9418 — Temasek/RRJ Master  Fund III/Gategroup  
Commission decision pursuant to Article 6(1)(b) of Council Regu lation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 24 July 2019, the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which Temasek 
Holdings (Private) Limited (‘Temasek’) (Singapore) and RRJ Master  Fund III, 
belonging to the group of RRJ Capital  (‘RRJ’)  (Hong Kong) acquire within the 
meaning of Article 3(1)(b) and 3(4) of the Merger Regulation joint control of 
gategroup Holding AG (‘Gategroup’) (Switzerland), currently solely controlled by 
RRJ Capital.3 Temasek and RRJ Master  Fund III are collectively re ferred to as the 
‘Parties .’ 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger R egulation”). 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 T FEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C 257, 31.07.2019, p. 17.  
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and 
other  confidential information. The 
omissions are shown thus […] . Where 
possible the information omitted has been 
replaced by ranges of figures or a general 
description.  
 
 
2 1. THE PARTIES   
(2) Temasek is an investment company headquartered in Singapore. Temasek has 
significant shareholdings in two businesses in related markets to Gategroup: SATS 
and Singapore Airlines. SATS is principally active in ground  handling, cargo 
handling, in -flight catering and the provision of other in -flight services to airlines 
and is primarily active in the Asia Pacific region, it is not active in the EEA. 
Temasek also holds a [50-60]% controlling shareholding in Singapore Air lines. 
Within the EEA, Singapore Airlines offers air transport services, including passenger 
and freight transport, to airports in Belgium, Denmark, France, Germany, Greece, 
Italy, the Netherlands, Spain, Sweden, and the United Kingdom.   
(3) RRJ is an investm ent firm based in Hong Kong and Singapore. RRJ undertakes 
private equity investments in Asia and primarily focuses on growth capital and state -
owned enterprises investments. RRJ’s interest in Gategroup is held indirectly by its 
RRJ Capital Master Fund III.    
(4) Gategroup is headquartered in Switzerland  and operates in around 60 countries  
globally , including in contracting countries  to the EE A Agreement . It provides 
various airport and in -flight food and hospitality solutions . Gategroup’s main 
activities consis t of i n-flight catering  and retail on -board services which it provides 
primarily through its Gate Gourmet , Servair , gateretail , and Dutyfly  brands.4 
2. THE OPERATION   
(5) The notified concentration consists of the acquisition of joint control by Temasek 
and RRJ of Gategroup, which is currently solely controlled by RRJ  (the 
‘Transaction’) .  
(6) More specifically, Temasek intends to acquire 50% of Gategroup’s voting shares 
from RRJ (which currently controls the entire 100% shareholding of Gat egroup) 
through two instrum ents. [Information on the transaction  structure] .5 [Information on 
the transaction  structure] .  
(7) The Transaction will therefore result in Temasek’s acquisition of 50% of 
Gategroup’s voting shares. Post-Transaction, RRJ will continue to own the 
remaining 50%  of Gategroup’s voting shares.  
2.1. Joint control  
(8) Temasek and RRJ have undertaken to enter into a Shareholders’ Agreement that will 
govern  the exercise of their interests in Gategroup. [Information on negotiations 
                                                 
4  In addition, Gategroup is active in in -flight catering equipment, airpo rt lounge services, and to a more 
limited extent in airport retail and contract catering services.  
5  [Information on the transaction  structure]  RRJ acquired 100% of Gategroup’s share capital from HNA on 
April 3, 2019. See Gategroup’s press release on April 3, 2019, available at: 
https://www.gategroup.com/en -gb/media/gategroup -announces -completion -of-change -in-ownersh ip.  
 
 
3 between Temasek and RRJ] .6 Specifically, each of Temasek and RRJ is expect ed to 
have the following rights.  
(9) [Infor mation on the composition  of the Gategroup board ].7 [Infor mation on the 
composition  of the Gategroup board ].8 
(10) Any decision by the Gategroup board involving a “reserved matter” will require the 
affirmative vote of one Temasek director and one RRJ director.9 Reserved matters 
include, inter alia , the approval and amendment of Gategroup’s business plan and 
annual budget .10  
(11) These rights will therefore enable each of Temasek a nd RRJ to veto decisions which 
would be essential for the strategic commercial behaviour of Gategroup, including 
its business plan, budget and the appointment of senior management. Consequently, 
the Transaction would result in Temasek and RRJ obtaining joi nt control over 
Gategroup.  
2.2. Full functionality  
(12) Following the Transaction, Gategroup would perform all the functions of an 
autonomous undertaking on a la sting basis.  
(13) First, Gategroup would have sufficient resources to operate independently. 
Gategroup has it s own dedicated management and employs over 43,000 personnel. It 
has assets in excess of EUR  2 500 million , focused around catering facilities that 
serve airlines at over 200 airports worldwide.  
(14) Second, it has a ctivities beyond one spe cific function for its parent  companie s. 
Gategroup is responsible for all operations, sales, and purchases for its in -flight 
catering, retail on -board, and ancillary activities.  
(15) Finally, Gategroup provides services to customers (especially airlines) that are 
independent of RRJ and Temasek (just c a [0-5]% of Gategroup’s revenues come 
from sales to Singapore Airlines).  
(16) Therefore, the Transaction would result in a concentration within the meaning of 
Articles 3(1)(b) and 3(4) of the Merger Regulation.   
3. EU DIMENSION  
(17) In 2018, t he undertakings concerned have a combined aggregate world -wide 
turnover of more than EUR 5 000 million11 [Temasek: EUR  […] million, RRJ  
(excluding the turnover of Gategroup) : EUR  […] million, Gategroup: 
EUR  4 277 million ]. Each of them has an EU -wide turnov er in excess of 
                                                 
6  See Form CO, Annex 5.1.3 – 3 (the “ Call Option Agreement ”), Article 3.5(a).  
7  Ibid., Schedule 3, Section 3.1 (page 17).  
8  Ibid., Schedule 3, Section 3.2 (page 18).  
9  Ibid., Schedule 3, Section 3.3 (page 18).  
10  Ibid., Schedule 3, Section 3.4(a)  (page 18).  
11  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
 
 
4 EUR  250 million, but they do not achieve more than two -thirds of their aggregate 
EU-wide turnover within one and the same Member State. The notified operation 
therefore has an EU dimension pursuant to Article 1(2) of the Merger Regulation.  
4. MARKET DEFINITION  
(18) Gategroup  mainly  provides in -flight catering and retail on -board services. Temasek, 
through its majority shareholding in Singapore Airlines, is active in the downstream 
market for passenger air transport  services .  
(19) There are , therefore , no horizontal overlaps but vertical links between the activities 
of Singapore Airlines and the services provided by Gategroup to its customers.  
4.1. Upstream market: In -flight catering services  
(20) In-flight catering comprises the provision and delivery of food and  beverage 
solutions to airlines , which will be served to passengers on an aircraft during the 
flight.  
4.1.1.  Relevant product market  
(21) The Parties submit that the relevant product market is in-flight catering as a whole  
and argue that a segmentation between types of flight or meals is not warranted.12 
They also submit that the exact product market definition can be left open for the 
purposes of the Transaction, as no competitive concerns arise under any plausible 
market definition.   
(22) In previous cases , the Commissio n concluded that the relevant product market for in -
flight catering comprises the entire range of meals (economy/business/first class) for 
all types of flights (short -haul/long -haul).13 The Commission left open whether a 
distinction should be made as betwee n “traditional” (i.e., airline catering companies 
that provide the entire range of required meals to meet the different needs of airline 
companies) and “non -traditional” (i.e., catering companies or other food products 
suppliers that formally act as suppli ers to “traditional” caterers, but also negotiate 
directly with airlines on quality and price suppliers)  catering suppliers.14   
(23) In line with the Commission’s past decisional practice, the Commis sion concludes 
that, for the purposes of assessing the Transac tion, the relevant product market for 
in-flight catering comprises the entire range of meals for all types of flights. As 
regards a possible segmentation of in-flight catering by a type of catering supplier , it 
can be left open  whether the market for in-flight catering should be segmented 
between “ traditional” and “non -traditional”  catering suppliers , since the Transaction 
would not raise any serious doubts irrespective of the exact product market 
definition.  
                                                 
12  Form CO, paragraph 6.12.  
13  Case M.8104 - HNA Group/Gategroup , paragraph 17, Case M.8137 – HNA Group/Servair , paragraph 42  
14  Case M.8137 – HNA Group/Servair , para graph 42.  
 
 
5 4.1.2.  Relevant geographic market  
(24) The Parties sub mit tha t the geographic scope of in-flight catering services is likely to 
be limited to the local region around an airport.  They have provided market share 
estimates based on the narrowest plausible geographic market, ( i.e., the level of 
individual airport s). They also submit that the exact geographic market definition 
can be left open for the purposes of the Transaction, as no competitive concerns arise 
under any plausible market definition.  
(25) In its most recent case, the Commission concluded that the geogra phic market for in -
flight catering services  comprised of at most an airport region .15 In that ca se the 
market investigation found that in -flight catering contracts were agreed either on an 
airport -by-airport basis , or a catchment area covering multiple airp orts. Competition 
between in -flight catering service providers was found to take place at airport level .16   
(26) In line with the Commission’s past decisional practice, the geographic market for in -
flight catering comprises at most a relevant  airport  region . Nevertheless, for the 
purposes of the present case , the precise geographic scope of the in -flight catering 
market can be left open, as the Transaction would not raise any serious doubts 
irrespective of the exact geographic  market definition.  
4.2. Upstream marke t: Retail on -board services  
(27) Retail on -board services comprise the provision of shopping services that are made 
available  to passengers during the flight, such as snacks  (food and beverages)  and 
duty free goods.  
4.2.1.  Relevant product market  
(28) The Parties refer t o the Commission’s past decisional practice, noting that the 
Commission had considered a separate product market for the provision of third -
party retail on -board services. They also submit that the exact product market 
definition can be left open for the p urposes of the Transaction, as no competitive 
concerns arise under any plausible market definition.17 The Parties  have however 
provided market share information on the basis of the narrowest plausible product 
market definition, i.e. , retail on -board service s segmented into snacks and duty free 
products.  
(29) In previous cases, the Commission considered whether there was a stand -alone 
market for the provision of third -party retail on -board services, distinct from in -flight 
catering services and excluding airlines’  own in -house sourcing of retail on -board 
products. The Commission, has, however, left open the question whether the market 
may be further segmented into markets for snacks (i.e., the on -board sale of food and 
beverage products) and duty free products (i.e ., the on -board sale of cigarettes, 
alcohol, perfumes, and other items).18  
                                                 
15  Case M.8104 – HNA Group/Gategroup , para. 23, Case M.8137 – HNA Group/Servair , paragraph 50.  
16  Case M.8137 – HNA Group/Servair , paragraphs 46 -50. See also Case M.8104 – HNA Group/Gategroup , 
paragraphs 20 to 22.  
17  Form CO, paragraph 6.16.  
18  Case M.8137 – HNA Group/Servair , paragraph 26.  
 
 
6 (30) In line with the Commission’s past decisional practice, the Commission concludes 
that, for the purpose s of assessing the Transaction,  the market for the provision of 
retail on -board  services is separate from the market for the provision of in -flight 
catering services. As regards a possible segmentation of retail on -board  services  by 
type of product, it can be left open whether the market for retail on -board services 
comprises both sn acking (food and beverage) and duty free products, since the 
Transaction does not raise any serious doubts irrespective of the exact product 
market definition.  
4.2.2.  Relevant geographic market  
(31) The Parties provide market share estimates on an EEA -wide basis as the narrowest 
plausible geographic market.19 They also submit that the exact geographic market 
definition can be left open for the purposes of the Transaction, as no competitive 
concerns arise under any plausible market definition.  
(32) In previous cases, t he Commission has concluded that the geographic market for 
retail on -board services is at least EEA -wide, if not global.20  
(33) In line with the Commission’s past decisional practice,  the geographic market for 
retail on -board services is at least EEA -wide . Neverth eless, for the purposes of the 
present case, the precise geographic scope of the retail on -board market can be left 
open, since  the Transaction does not raise any serious doubts irrespective of the 
exact geographic  market definition.  
4.3. Downstream market: Pas senger air transport services  
4.3.1.  Relevant product market  
(34) The Parties refer to the Commission’s past decisional practice, noting that the 
Commission has defined one overall market for passenger air transport  services , 
when assessing vertical relationships.21 The Parties argue that this reflects the reality 
that an airline’s demand for in -flight catering or retail on -board services  is a function 
of total passenger numbers, irrespective of the time -sensitivity of those passengers 
and their readiness to travel on  indirect flights.  
(35) In previous vertical cases, the Commission considered that there is an overall market 
for passenger air transport  services, but  left open whether th is market for passenger 
air transport services might be further sub -segmented into scheduled and charter 
flights or into “time -sensitive” and “non -time-sensitive” passengers.22 
(36) In line with the Commission’s past decisional practice, the Commission concludes 
that the relevant product marke t for the purpose s of assessing  the Transaction is an 
overall market for passenger air transport  services . As regards a possible 
segmentation of passenger air transport services, it can be left open whether the 
market for pass enger air transport services should be further segmented into 
scheduled and charter flights or “time -sensitive” and “non -time-sensitive” 
                                                 
19  Form CO, paragraph 6.24.  
20  Case M.8137 – HNA Group/Servair , paragraph 33.  
21  Form CO, paragraph 6.9.  
22  Case M.8104 – HNA Group/Gategroup , paragraph 35, Case M.8137 – HNA Group/Servair , paragraph 58.  
 
 
7 passengers, since the Transaction does not raise any serious doubts irrespective of 
the exact product market definition . 
4.3.2.  Relevant geographic market  
(37) The Parties submit that the most appropriate geographic market definition for the 
assessment of the vertical relationship between Singapore Airlines’ passenger air 
transport services and Gategroup’s upstream services is an airp ort-by-airport 
approach.23 The Parties provide  market  share estimates on this basis.  
(38) In previous cases involving  a vertical rela tionship  between  in-flight catering and 
retail on -board services  on the one hand and passenger air transport services on the 
other hand , the Commission found that airlines procure in -flight catering and retail 
on-board services on an airport -by-airport basis and not on a route -by-route basis . 
Therefore,  it was considered  necessary to look at the market share of the particular 
airline into the total demand for in -flight catering services and retail on -board 
services at the relevant airports instead of making a route -by-route assessment .24  
(39) In line with the Commission’s past decisional practice, the  geograp hic market for the 
provision of passenger air transport services in th is case comprises every route 
combination between  a given  point -of-origin  airport  and a point -of-destination  
airport . Nevertheless, for the purposes of the present case, the precise geog raphic 
scope of the passenger air transport  services  market can be left open, since the 
Transaction does  not raise any serious doubts irrespective of the exact geographic  
market definition.  
5. COMPETITIVE ASSESSMEN T 
(40) The Transaction does not lead to any horizontal ly affected markets .25 However , it 
gives rise to a number of vertically affected markets in the EEA. More specifically, 
the Transaction leads to vertically affected markets arising from Gategroup’s  supply 
of in -flight catering upstream and Temasek ’s provision of passenger air transport 
services ( via its portfolio company  Singapore Airlines ) at 11 airports in the EEA.26  
(41) The Transaction also leads to a vertically affected market between Gategroup’s  
provision of retail on -board service s upstream and p assenger air transport services  by 
Temasek downstream (via its portfolio company Singapore Airlines ) in the EEA.27 
                                                 
23  Form CO, paragraph 6.29.  
24  See Case M.8137 – HNA Group/Servair (2018), paragraph 61. See also  Case M.8104 – HNA 
Group/Gategroup (2018), paragraph 35.  
25  To a limited extent, the Parties overlap in the management of airport lounges at London Heathrow  (LHR)  
airport . Given that there are no affected markets with respect to airport lounges ( see footnote 43 of the 
Form CO), this aspect is no longer discussed in this decision.  
26   See section 5.1.1  below.  
27  See section 5.1.2  below.  
 
 
8 5.1. Market shares  
5.1.1.  In-flight catering services   
(42) The Transaction gives rise to vertically affected markets due to Gategroup’s 
significant presence  in the upstream markets for  in-flight catering at a number of 
major European airports, with market shares ranging from [30-40]% (at Munich  
(MUC) ) to [90-100]% and [90-100]% (at Stockholm Arlanda  (ARN)  and 
Copenhagen Kastrup (CHP) respectively), excluding captive sales. However, in all 
of these vertically affected markets, Singapore Airlines’ market share on the 
downstream market for  passenger air  transport services is very low (between [0-5]% 
and [0-5]%).  
(43) More specifically,  on the  basis of the Parties ’ submission,  the Transaction gives rise 
to vertically affected markets for in -flight catering at the following airports  in the 
EEA : 
Table 1. The Parties’ In-Flight Catering and Passenger Air Transport Market Share 
Estimates , 2018  
Country  Airport (IATA 
Code)  Singapore Airlines’ 
Passenger Air 
Transport Share  Gategroup’s In -
flight Catering 
Share28 
Denmark  Copenhagen 
Kastrup (CPH)  [0-5]% [90-100]% 
France  Paris Charles de 
Gaulle (CDG)  [0-5]% [90-100]% 
Germany  
 Berlin Tegel (TXL)  [0-5]% [30-40]% 
Dusseldorf (DUS)  [0-5]% [50-60]% 
Frankfurt (FRA)  [0-5]% [30-40]% 
Munich (MUC)  [0-5]% [30-40]% 
Italy Rome Fiumicino 
(FCO)  [0-5]% [50-60]% 
Netherlands  Amsterdam 
Schiphol (AMS)  [0-5]% [80-90]% 
Spain  Barcelona  (BCN)  [0-5]% [40-50]% 
Sweden  Stockholm Arlanda 
(ARN)  [0-5]% [90-100]% 
UK London Heathrow 
(LHR)  [0-5]% [40-50]%29 
Source: Form CO and Annex 7.1  
                                                 
28  For their estimate of the total market size at each relevant airport , the Parties provided data that excludes 
captive sales from Air Chef to Emirates Airlines; KLM Catering Services (KCS) to KLM; and LSG to 
Lufthansa Group Airlines (Lufthansa, Swiss, and Austrian Airlines) as in -house supply. See Form CO, 
Annex 7.1.  
29  British Airways (the largest airline active at London Heathrow (LHR)) will switch from Gategroup to D O 
& CO in 2020, therefore, according to the Parties, the stated Gategroup’s market share overstates its 
competitive position.  See Form CO, Annex 7.1.  
 
 
9 5.1.2.  Retail on -board services   
(44) The Transaction gives rise to a vertically affected market due to Gategroup’s 
significant  presence on the upstream market for retail on -board services  in the EEA . 
In 2018, Gategroup’s combined  market  share for its gateretail and Dutyfly brands 
accounts  for approximately [60-70]% on the EEA -wide level .30  
(45) On a potential narrower mar ket for retai l on-board services of snacking, Gategroup’s 
market share in 2018 amounts to  [70-80]% in the EEA. Gategroup’s market share on 
a potential narrower market for retail on -board services of duty free services in 2018 
is [50-60]% in the EEA.  
(46) However, as indicated in Table 2 below , in each of the  EEA airports w here the 
Parties’ activities overlap, Singapore Airlines’ market share is very low (between 
[0-5]% and [0-5]%).  
Table 2. The Parties’ Retail On -Board and Passenger Air Transport Market Share 
Estimates, 2018  
Country  Airport (IATA 
Code)  Singapore Airlines’ 
Passenger Air 
Transport Share  Gategroup’s Total 
Retail On -Board 
Share  in the EEA  
Denmark  Copenhagen 
Kastrup (CPH)  [0-5]% [60-70]% 
France  Paris Charles de 
Gaulle (CDG)  [0-5]% [60-70]% 
Germany  
 Berlin Tegel (TXL)  [0-5]% [60-70]% 
Dusseldorf (DUS)  [0-5]% [60-70]% 
Frankfurt (FRA)  [0-5]% [60-70]% 
Munich (MUC)  [0-5]% [60-70]% 
Italy Milan Malpensa  
(MXP)  [0-5]% [60-70]% 
Rome Fiumicino 
(FCO)  [0-5]% [60-70]% 
Netherlands  Amsterdam 
Schiphol (AMS)  [0-5]% [60-70]% 
Spain  Barcelona  (BCN)  [0-5]% [60-70]% 
Sweden  Stockholm Arlanda 
(ARN)  [0-5]% [60-70]% 
UK London Heathrow 
(LHR)  [0-5]% [60-70]% 
Manchester  [0-5]% [60-70]% 
Source: Form CO and Annex 7.2  
                                                 
30   All retail on -board services market shares exclude captive sales. Gategroup based its own retail on -board 
market shares on the actual 2018 revenues and provided estimates for the rest of the market based on its 
market intelligence. See Form CO, Annex 7. 2. 
 
 
10 5.2. The Parties’  arguments   
(47) The Parties submit  that the vertical relationships brought about by the Transaction 
will not  lead to input or customer foreclosure for in -flight catering  and reta il on -
board services in the E EA due to the following reasons.  
(48) First, Gategroup is only jointly -controlled by Temasek (i.e. , the controlling 
shareholder in Singapore Airlines). The other parent  company of Gategroup , RRJ, 
would not benefit f rom any input foreclosure strategy and therefore would be likely 
to block any foreclosure strategy. In addition, given Singapore Airlines’ de minimis  
presence at all affected airports, any putative input foreclosure strategy would 
inevitably result in a si gnificant reduction in sales for Gategroup.  
(49) Second,  there is no commercial rationale for Gategroup to engage in a foreclosure 
strategy.  Gategroup’s business at affected  European airports accounts for a small 
fraction of its overall global business with its  airline customers. Any deterioration in 
price and quality for the European airport contracts  would undermine Gategroup’s 
commercial reputation and  could put at risk the entire global relationship.  
(50) Third , Gategroup will continue to face significant compet ition in the supply of in -
flight catering, retail on -board, and other related services at all affected airports. The 
competitive landscape of the affected markets is driven by a competitive 
procurement process with a number of credible bidders. This will e nsure that all 
future bidding contests remain competitive, while prices under existing contracts 
remain determined by the competitive parameters of previous bidding contests.  
(51) Last, airline customers are sophisticated buyers with significant countervailing 
power. They are likely  to respond to any attempted foreclosure strategy by switching 
to another supplier and/or make use of “return catering” arrangement s, i.e., sourcing 
meals for both legs of a route at a single airport.  
5.3. The Commission’s assessment  
5.3.1.  Input  foreclosure  
(52) According to the Non -Horizontal Merger Guidelines,31 foreclosure occurs when 
actual or potential rivals’ access to suppl ies or markets is restricted , thereby reducing 
those companies’ ability and/or incentive to compete. Such foreclosure may 
discourage entry or expansion of rivals or encourage their exit.32  
(53) In order for input foreclosure to be a concern, three conditions need to be met post -
merger: (i) the merged entity needs to have the ability to foreclose access to inputs;33 
(ii) the merged entity needs to have the incentive to do so;34 and (iii) the foreclosure 
                                                 
31  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings , OJ C 265 , 18.10.2008 , p. 6,  (the “Non -Horizontal Merger 
Guidelines”).  
32  Non-Horizontal Merger Guidelines, para graphs 29 to 30.  
33  Non-Horizontal Guidelines, paragraphs 33 to 39.  
34  Non-Horizontal Merger Guidelines, paragraphs 40 to 46,  
 
 
11 strategy needs to have a likely significant detrimental effect on competition on the 
downstream market.35 
5.3.1.1.  In-flight catering services  
(54) The Commission  assessed the vertic al relationships between the Parties ’ activities  in 
in-flight catering and passenger air transport services and considers that post-
Transaction, Gategroup would not have the ability or incentive to foreclose airlines 
competing wit h Singapore Airlines downs tream  from in -flight catering.  
(55) First, while Gategroup’s upstream market share is high ranging from [30-40]% (at 
Munich  (MUC) ) to [90-100]% (at Paris Charles  de Gaulle  (CDG) ) and [90-100]% 
(at Copenhagen Kastrup  (CPH) ),36 in-flight catering cannot be considered an 
important input for the downstream market  for passenger air transport  services . As 
demonstrated by the Commission’s market investigation, in -flight catering services 
account for a very low prop ortion (on average around 5 %) of the total costs of 
providing passenger air transport services.37 It is also ancillary to the core service of 
providing passenger air transport services.  
(56) Second , the majority of respondents to the Commission’s market investigation were 
of the view that it is not likely tha t Gategroup will  restrict access to or increase 
prices of its in -flight catering services as this would have a detrimental  effect on  its 
position and encourage customer s to switch  to other service providers .38 Indeed, one 
market participant  responding to the Commission’s market investigation noted  that 
due to their global footprint  large  airlines  are able to leverage their  buyer power  and 
negotiate certain discounts.39 
(57) At the same time, the Commission’s market investigat ion showed that an air line’s 
current  in-flight catering provider may have an advantage compared to competing  
players  due to , for example,  its knowledge of the airline’s  service needs  and 
preferences . This may  reduce the airlines ’ willingness to switch  to other  in-flight 
catering providers . Indeed , some respondents considered that potential delays  related 
to getting accustomed with the internal procedures of the airline , staff training, 
logistics costs associated with the change of a supplier  might limit the pos sibilities of 
switching .40 On the other hand, more than half  of the airlines responding to the 
Commission’s market investigation confirmed that they h ad switched their in -flight 
catering provider at least once in the last five years.41 However, as noted by a  market 
respondent, changing in -flight catering suppliers at the hubs  is much more difficult, 
because “ the requirements to tender and change suppliers are higher ”42 and that 
typically the existing supplier is “ the only [one] having enough capacity to fulfil  all 
                                                 
35  Non-Horizontal Merger Guidelines, paragraphs 47 to 57.  
36  Excluding captive sales, see Form CO and Annex 7.1  
37  Replies to Q1 – questionnaire, question 11.  
38  Replies to Q1 – question naire, question s 12 and 12.1.  
39  This, however, applies only to  those airports where more than one in -flight catering providers are active. 
Replies to Q1 – questionnaire, question 5. 
40  Replies to Q1 – questionnaire, questions 9; 9.1  ; 10; and 10.1.  
41  Market respondents noted various reasons for the switch, including lack of capacity , inadequate  service of 
the previous service provider, better commercial conditions, and the fact that there existing in -flight 
services provider had been acquired by a larger  player. Replies to Q1 – questionnaire, questions 7 and 7.1.  
42  Customer/Competitor’s Reply to Q1 – questionnaire, question 7.1.  
 
 
12 needs of the customer without having to build any additional infrastructure  
[whereas] other suppliers […] will have to invest in new buildings, equipment and 
hire hundreds of people ”.43 On balance, the Commission considers that if Gategroup 
restrict ed access to or increase d prices of its in -flight catering services post-
Transaction, customers would have some alternatives for in-flight catering services 
from other competing providers such as LSG Sky Chefs  or smaller players such as 
DO & CO or Newrest (see paragraph (59) below).   
(58) Third , Gategroup will have a limited ability to negatively affect market prices and 
conditions  to customers  post-Transaction due to the bidding type of in-flight catering 
market . Indeed, airlines typically select their suppliers at airports  based on a regular 
competitive tender process in which they invite as many suppliers  as can potentially 
respond .44 The in -flight catering con tracts are typically concluded  on average for a 
period of  2 to 5 years  with extension  and termination  possibilities .45 In order to 
remain competitive, Gategroup will have to maintain competitive price/quality of its 
services. Such market dynamics  also makes  it unlikely for Gategroup to increase 
prices or reduce service quality of in -flight catering services despite its considerable 
shares at a given airport and will constrain Gategroup ’s ability to affect market 
prices and conditions.  
(59) Last, while Gategroup is the largest in -flight catering provider in the EEA having  by 
far the highest  market share in the majority  of the affected airports in the EEA ,46 it 
will continue to face competition  from a number  of in-flight catering providers , in 
particular  from the se cond largest provider LSG Sky Chefs  that is active in  7 out 11 
affected airports  in the EEA47 with a market share estimate ranging from  [5-10]% (at 
Amsterdam Schiphol  (AMS) ) to [40-50]% (at Berlin Tegel  (TXL) ) and [40-50]% (at 
Frankfurt  (FRA) ).48 Other competitors include smaller in -flight catering providers 
such as Newrest  (active in 4 out 11 affected airports in the EEA )49 and DO & CO 
(active  in 5 out of 11 affected airports in  the EEA )50 as well as other  suppliers .  
(60) In terms of new market entry , the Commission’s market investigation showed that 
there exist a number of  barriers to entry  in the market for  in-flight catering related to  
the logistics set up  and required investment in infrastructure  and equipment .51 For 
instance,  one market participant noted that “[t]he in-flight catering services are 
dominated by a few big payers covering […] many airports and only some few minor 
                                                 
43  Customer/Competitor’s Reply to Q1 – questionnaire, question 10.1.  
44  Form CO, paragraph 7.3 and Replies to Q1 – questionnaire, question 5.  
45  Form CO, paragraph 7.3 and Replies to Q1 – questionnaire, question 6.  
46  With the exception of Berlin Tegel  (TXL) , Frankfurt  (FRA) , and Munich  (MUC)  airports where 
Gategroup is the s econd largest in -flight catering provider after LSG Sky Chefs (Lufthansa Group) and 
Barcelona (BCN) where it is a close second in -flight catering provider after Newrest. See market share 
information submitted by the Parties in Annex 7.1 of the Form CO.  
47  Namely, Berlin Tegel  (TXL) , Dusseldorf  (DUS) , Frankfurt  (FRA) , Munich  (MUC) , Rome Fiumicino  
(FCO) , Amsterdam Schiphol  (AMS) , and London Heathrow  (LHR)  airports.  
48  Excluding captive sales. See market share information submitted by the Parties in Annex 7.1 of the Form 
CO. 
49  Namely, Paris Charles de Gaulle  (CDG) , Amsterdam Schiphol  (AMS) , Barcelona  (BCN) , and London 
Heathrow (LHR) airports.  
50  Namely, Berlin Tegel  (TXL) , Dusseldorf  (DUS) , Frankfurt  (FRA) , Munich  (MUC)  and London Heathrow 
(LHR) airports.  
51  Replies to Q1 – questionnaire, questions 8 and 10.1.  
 
 
13 players ”52 adding that “ due to large investments to ent er the market not many new 
entrants are seen ”.53 Nevertheless , in recent years there have been some instances of 
smaller  players expanding their footprint at various airports in the EEA. For 
example, DO & CO has expanded in London Heathrow  (LHR ),54 while Newrest has 
sought to expand to new locations in the EEA .55 Also, Inflight International 
Logistics started operations in 2015 in the Nordic region56 and a new player  has 
started operations at Copenhagen Kastrup recently.57  
(61) The Commission  therefore  considers  that it is unlikely that Gategroup could engage 
in an input foreclosure strategy in in-flight catering post -Transaction .  
5.3.1.2.  Retail on -board services  
(62) Post-Transaction, the Parties will have an EEA -wide combined market share of 
[60-70]% in the upstream market for retail on -board services (a nd [70-80]% on 
a potential market  for snacking only, an d [50-60]% for a potential market  for duty 
free only). The respondents to the Commission’s market investigation noted that 
there were limited providers in this market, noting for example that there were “ only 
3 significant suppliers Gate Retail and Retail  in Motion, which both together have 
more than 70% of the market, and Tourvest .”58 A majority of respondents also 
indicated that switching to other providers was difficult ,59 noting for example that 
“the bus iness model is very integrated into the airlines operation and daily 
business ”60 and while there are “ many suppliers of logistics services  […] last mile 
suppliers within the restricted safety areas in an airport are limited due safety 
issues .”61 However, o n the downstream market, Singapore Airlines’  market  share 
however is very low, ranging from [0-5]% to [0-5]%.  
(63) The Commission considers that Gategroup would not therefore have the ability or 
incentive to foreclose airlines competing with Singapore Airlines d ownstream from 
retail on -board services.  
(64) In particular , while Gategroup’s upstre am market share is high ( [60-70]% and 
[70-80]% for snacking and [50-60]% for duty free) , retail on -board services cannot 
be considered an important input for  the downstream market  for passenger air 
transport  services . For example, retail on -board services accounts for a very low 
                                                 
52  Customer’s Reply to Q1 – questionnaire, question 8.  
53  Ibid. 
54  Customer’s Reply to Q1 – questionnaire, question 8. See also Form CO, paragraph 7.3.  
55  Customer’s Reply to Q1 – questionnaire, question s 8 and 25 . 
56  Competitor’s Reply to Q1 – questionnaire, questions 1 and 8. However, based on the Parties estimates, 
Inflight International Logistics’ market shares have remained very low, namely [0-5]% in Copenhagen 
Kastrup  (CPH)  and [0-5]% in Sto ckholm Arlanda  (ARN) , see Form CO, Annex 7.1.  
57  Customer/Competitor’s Reply to Q1 – questionnaire, question 8.  
58  Competitor’s Reply to Q1 – questionnaire, question 17.1. Gateretail is one of Gategroup’s retail  on-board 
services brands and Retail inMotion  is a Lufthansa Group’s subsidiary. Another respondent also 
mentioned a recent market entrant in on -board retail services, see a Competitor’s Reply to Q1 – 
questionnaire, question 16.  
59  Replies to Q1 – questionnaire, question 17.  
60  Customer/Competitor’s Reply to Q1 – questionnaire, question 17.1.  
61    Customer /Competitor’s Reply to Q1 – questionnaire, question 17.1.  
 
 
14 proportion (less than 5%) of total costs of providing passenger air transport 
services.62 It is also ancillary  to the core service of providing air tr ansport services.  
(65) Furthermore , all market participants who responded to the market investigation  
indicated that , in their view, Gategroup  would not have an incentive to pursue an 
input foreclosure strategy .63 The Commission’s market investigation showed th at 
post-Transaction, any attempt to foreclose competitors downstream would result in 
loss of sales for Gategroup, but that it would not result in a corresponding diversion 
of demand to Singapore Airlines due to the fact that, as noted by a market 
participa nt, “ on-board retail part not decisive ”64 and would not therefore be 
profitable. The same market participant does however go on to note that “ [l]ogistics 
at the airport is [a] bottleneck .”65 
(66) In addition , Gategroup is jointly controlled by Temasek and RRJ. Any input 
foreclosure strategy would entail loss of sales for Gategroup. RRJ, which is not 
active in the down stream passenger air transport services market, would not benefit 
from this strategy and it would be in RRJ’s economic interest  to block it.66 The 
Commission does not therefore consider that it is not likely that the Transaction will 
lead to increased prices in the downstream market  for passenger air transport  
services .67 
(67) The Commission therefore co nsiders that it is unlikely that Gategroup could engage 
in an input foreclosur e strategy in retail on -board services (or in retail on -board 
snacking, or retail on -board duty free)  post-Transaction.  
5.3.2.  Customer foreclosure  
(68) According to the Non -Horizontal Merg er Guidelines, customer foreclosure may 
occur when a supplier integrates with an important customer in the downstream 
market.68  
(69) The Non -Horizontal Merger Guidelines acknowledge that customer foreclosure may 
be of concern  if a vertical merger involves a company that is an important customer 
with a significant degree of market power in the downstream market, as only then 
does an integrated firm have a potential ability to foreclose access to a sufficient 
customer base. No such c oncerns arise, however, where a sufficiently large customer 
base is likely to turn to alternative suppliers, as this would provide upstream 
competitors with sufficient economic alternatives.69 
                                                 
62  Replies to Q1 – questionnaire, question 19.  
63  Replies to Q1 – questionnaire, question 20.  
64  Customer/Competitor’s Reply to Q1 – question naire, question 20.1.  
65  Customer/Competitor’s Reply to Q1 – questionnaire, question 20.1.  
66  As noted in the Non -Horizontal Merger Guidelines, paragraph 45 (footnote), “ in cases where two 
companies have joint control over a firm active in the upstream mar ket, and only one of them is active 
downstream, the company without downstream activities may have little interest in foregoing input sales .” 
67  Non-Horizontal Merger Guidelines, paragraph 47.  
68  Non-Horizontal Merger Guidelines, paragraph 58.  
69  Non-Horiz ontal Merger Guidelines, paragraphs 58 to 74.  
 
 
15 5.3.2.1.  In-flight catering services  
(70) The Commission assessed the vertical relationships between the Parties’ activities in 
in-flight catering and passenger air transport services and considers that Gategroup 
would not have the ability or incentive to foreclose access of Gategroup’s 
competitor s to Singapore Airlines’ demand of in -flight catering services.  
(71) First, while Gategroup’s in -flight catering market  share exceeds 30% at 11 European 
airports (namely, Copenhagen Kastrup  (CPH) , Paris Charles de Gaulle  (CDG) , 
Berlin Tegel  (TXL) , Dusseldorf  (DUS) , Frankfurt  (FRA) , Munich  (MUC) , Rome 
Fiumicino  (FCO) , Amsterdam Schiphol  (AMS) , Barcelona  (BCN) , Stockholm 
Arlanda  (ARN) , and London Heathrow  (LHR) ), Singapore Airlines’ downstream 
share on the market for passenger air transport services at all of the se airports is very 
low, ranging between [0-5]% and [0-5]%. Given the de minimis  market share of 
Singapore Airlines at the affected airports, it cannot be considered an “ important 
customer ” within the meaning of the Commission’s Non -Horizontal Guidelines.70 
Even if Singapore Airlines were to purchase its in -flight catering services 
exclusively from Gategroup, the overwhelming majority of customer demand for in-
flight catering services  at any given airport would remain available to other upstream 
in-flight catering suppliers, providing them with sufficient alternatives to avoid 
being foreclosed.71 
(72) Second, neither the market investigation nor the evidence submitted by the Parties  
provide strong  indication that post-Transaction Gategroup would have th e incentive 
to engage in customer foreclosure . Indeed , any such strategy would be unsuitable  to 
increas e the costs of its upstream competitors . The Commission considers that  
following the Transaction,  the upstream suppliers will  continue to  have economic 
alternatives to avoid being foreclosed.  
(73) The Commission therefore considers that it is unlikely that Gategroup could engage 
in a customer foreclosure strategy in in -flight catering post -Transaction.   
5.3.2.2.  Retail on -board services  
(74) As noted above in Section 5.3.2.1 , based on the Parties’ estimates, Singapore 
Airlines has a very low down stream share on the market for passenger air transport 
services at all of these airports is very low, ranging between [0-5]% and [0-5]%. 
Given the de minimis  market share of Singapore Airlines at the affected airports, it 
cannot be considered an “ important customer ” within the meaning of the 
Commission’s Non -Horizontal Guidelines.72 Even if Singapore Airlines were to 
purchas e its demand of retail on -board services exclusively from Gategroup, the 
overwhelming majority of customer demand for such services at any given airport 
would remain available to other upstream suppliers  of retail on -board services , 
providing them with suf ficient alternatives to avoid being foreclosed.73 
                                                 
70  Non-Horizontal Merger Guidelines, paragraphs 58 and 61.  
71   Non-Horizontal Merger Guidelines , paragraph 61.  
72  Non-Horizontal Merger Guidelines, paragraphs 58 and 61.  
73  Non-Horizontal Merger Guidelines , paragraph 61.  
 
 
 
16 (75) The Commission therefore considers that it is unlikely that Gategroup could engage 
in a customer foreclosure strategy in retail on -board services (or in retail on -board 
snacking, or retail on -board duty free ) post -Transaction.  
5.4. Conclusion on competitive assessment  
(76) In light of the outcome of the market investigation and the evidence submitted  by the 
Parties , the Commission concludes that it is unlikely that the combined entity could 
engage in either an input or customer foreclosure strategy post -Transaction.  
(77) The Commission therefore concludes that the Transaction does not raise serious 
doubts about its compati bility with the internal market or the functioning of the EEA 
Agreemen t as regards its impact on competition for the markets for in -flight catering 
in Copenhagen Kastrup  (CPH) , Paris Charles de Gaulle  (CDG) , Berlin Tegel  (TXL) , 
Dusseldorf  (DUS) , Frankfurt  (FRA) , Munich  (MUC) , Rome Fiumicino  (FCO) , 
Amsterdam Schiphol  (AMS) , Barcelona (BCN) , Stockholm Arlanda  (ARN) , and 
London Heathrow  (LHR)  airports  and on retail on -board services  (and in retail on -
board snacking, or retail on -board duty free)  in the EEA on the basis of vertical 
effects.  
6. CONCLUSION  
(78) For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the  EEA Agreement.   
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission