Commission Decision of 9 February 2000 declaring a concentration to be compatible with the common market (Case No COMP/M.1628 — TotalFina/Elf) Council Regulation (EEC) No 4064/89 (Text with EEA relevance.)(Notified under document number C(2000) 363)
Date: 2000-02-09
Institutions: European Commission
Subjects: European Economic Area, agreement (EU), competition law, economic concentration, merger control, oil industry

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 9 February 2000

declaring a concentration to be compatible with the common market

(Case No COMP/M.1628 — TotalFina/Elf)

Council Regulation (EEC) No 4064/89

(Notified under document number C(2000) 363)

(Only the French text is authentic)

(Text with EEA relevance)

(2001/402/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES

Having regard to the Treaty establishing the European Com-
munity,

Having regard to the Agreement on the European Economic
Area, and in particular Article 57 thereof,

(1) On 24 August 1999 the European Commission was
in accordance with Article 4 of Regulation
notified,
(EEC) No 4064/89, of a planned merger whereby
TotalFina would acquire full control, within the meaning
of Article 3(1)(b) of Council Regulation (EEC)
No 4064/89, of Elf Aquitaine by way of a public
takeover bid announced on 5 July 1999.

Having regard to Council Regulation (EEC) No 4064/89 of
21 December 1989 on the control of concentrations between
undertakings (1),
amended by Regulation (EC)
No 1310/97 (2), and in particular Article 8(2) thereof,

last

as

Having regard to the Commission Decision of 5 October 1999
to initiate proceedings in this case,

Having given the undertakings concerned the opportunity to
make known their views on the objections raised by the
Commission,

Having regard to the opinion of the Advisory Committee on
Concentrations (3),

Whereas:

(1) OJ L 395, 30.12.1989, p. 1 (Corrigenda: OJ L 257, 21.9.1990,

p. 13).

(2) OJ L 180, 9.7.1997, p. 1 (Corrigenda: OJ L 40, 13.2.1998, p. 17).
(3) OJ C 154, 29.5.2001.

(2)

(3)

I. THE PARTIES TO THE TRANSACTION

TotalFina is a public limited company formed under
French law, in business in the production of petroleum
and gas, refining, distribution of petroleum products,
petrochemicals and speciality chemicals. Its business is
worldwide.

Elf Aquitaine is a public limited company formed under
French law, in business in the production of petroleum
and gas, refining, distribution of petroleum products,
petrochemicals, speciality chemicals and health-care. Its
business is worldwide.

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(4)

(5)

II. THE CONCENTRATION

The concentration consists of a public take-over bid by
TotalFina for all the shares in Elf Aquitaine held by the
public. The concentration is accordingly an acquisition
of full control within the meaning of Article 3(1)(b) of
the Regulation.

III. COMMUNITY DIMENSION

The firms concerned have an aggregate worldwide
turnover of more than EUR 5 000 million (4) (Total:
EUR 34 981 million; Elf: EUR 32 251 million). Each of
them has a turnover in the Community of more than
EUR 250 million [...] (*), but neither of them generates
more than two thirds of its turnover in a single Member
State. The transaction accordingly has a Community
dimension.

IV. PROCEDURE

(6) On 15 September 1999, TotalFina filed proposals for
commitments during the first stage of the procedure
under Article 6. The deadline for proceedings was
accordingly extended as provided by the Regulation.
These commitments were found to be neither adequate
nor precise enough to allay all the serious doubts raised
by the notified transaction.

(8)

These commitments were found to be neither precise
enough nor of such a nature as to allay all the serious
doubts raised by the notified transaction.

(9) On 17 September 1999 the French authorities filed a
request for partial referral pursuant to Article 9 of
the Merger Control Regulation. The request concerned
certain markets considered to be local markets for
finished petroleum products storage facilities, fuel sales
via motorway networks and the supply of LPG in
canisters to retailers. The Commission referred to the

(4) Turnover calculated in accordance with Article 5(1) of the Merger
Control Regulation and the Commission notice on the calculation
of turnover (OJ C 66, 2.3.1999, p. 25). Figures for turnover prior
to 1 January 1999 are calculated on the basis of average exchange
rates for the ecu and converted into euro at a one-to-one parity.
(*) Parts of this text have been edited to ensure that confidential
information is not disclosed; those parts are enclosed in square
brackets.

French authorities by decision of 26 November 1999
aspects of the case relating to the provision of hub depot
services in the areas around the northern and southern
Paris region, Lyon and Port-la-Nouvelle.
It has not
proven to be necessary to address the treatment of the
other concerns listed in the referral request as the
Statements of Objections covered more precisely the
storage of petroleum products in the regions of Nantes,
Saint Nazaire and Havre, motor fuel sales on the
motorways and the sale of LPG. The French authorities
have withdrawn their request for referral on 3 February
2000 regarding the elements on which the Commission
had not yet taken position.

(10) On 26 November 1999 a Statement of Objections was
sent to TotalFina, which replied on 13 December 1999.
TotamFina did not request the holding of a hearing.

V. DEFINITION OF RELEVANT MARKETS AND COMPE-
TITION ANALYSIS

1.

INTRODUCTION: REFINING AND SALE OF REFINED PRO-

DUCTS

1.1. Demand

French petroleum consumption (1997) is 48,5 million
m3 per annum for petrol and diesel and 19,5 million m3
per annum for domestic heating oil (DHO) and is rising
at the rate of approximately 4,1 % for fuels, 3,5 % for
DHO and 5,8 % for LPG products.

1.2. Supply channels and the logistical chain

(12) There are currently 13 refineries in France, the most
important of them being regrouped in two ‘refining
centres’, one around E´ tang de Berre (Marseille) and the
other in the lower Seine (Normandy), where the largest
refineries in France are concentrated. The are also a
number of individual refineries in Dunkirk, Donges
(Nantes region), Grandpuits (Paris region), Feyzin (Lyon
region) and Reichstett (Alsace). Elf and TotalFina each
own three refineries (Paris, Lyon and Nantes regions for
Elf; Dunkirk, Seine valley and E´ tang de Berre for
TotalFina). Shell, Esso and BP/Mobil have two each, in
the Seine valley and E´ tang de Berre. There is also the
refinery at Reichstett in Alsace, owned by Shell (65 %),
TotalFina (8 %) and Elf (10 %).

(7) On 18 October 1999 TotalFina filed proposals for

commitments pursuant to Article 8(2). [...].

(11)

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(13)

(14)

France is a petroleum products importer and has infra-
structure capable of
importing and storing greater
volumes than are currently in stock. Imported products
are generally purchased on the North Sea and Mediter-
ranean cargo markets on the basis of quotations such as
Platt’s. France is a net importer of diesel and a net
exporter of petrol.

Imported products are unloaded at
import depots.
Import depots and refineries are the sources of refined
products. These are usually connected to bulk transport
facilities (nearly always pipelines but sometimes trains
and barges) which make it possible to supply refined
products throughout France. Products are then sold
from what are known as hub depots; there are smaller
than import depots and products are transported form
them by lorry to retail outlets (service stations). Import
depots and refineries are also used for local supply
purposes.

(15) There are four pipeline systems in France.

(16) The Trapil pipeline system (held by the company with
the same name) is fed by the four Seine valley refineries
and by the Le Havre import depot
(controlled by
Compagnie Industrielle et Maritime (CIM) and the Rouen
import depot (controlled by Compagnie Parisienne des
Asphaltes (CPA)). Apart from the Basse Seine itself, it
supplies the Paris, Orléans, Tours et Caen regions. Trapil
also supplies refined products to the Donges-Melun-
Metz (DMM) pipeline, which transports them to the east
of France.

(17) The SPMR pipeline is fed by the refineries in the E´ tang
de Berre (Esso, BP/Mobil, Shell and TotalFina), the Feyzin
refinery (Elf, Lyon region) and Depot Pétrolier de Fos
(DP Fos, an import depot). It links these refineries to the
Lyon region, the French Riviera and, through its Alpine
branch, Switzerland.

(19) The ODC pipeline belongs to NATO. It is managed by
Trapil. The ODC pipelines are little used as their
configuration is outdated. It is possible that the part of
the pipeline which feeds Strasbourg may be modernised
in the run-up to the closure of the Reichstett refinery.
To optimise outlets of the Dunkirk and Normandy
refineries, TotalFina has invested in upgrading the part
linking Dunkirk to Cambrai (pump equipment). The
new pumping station is in the TotalFina refinery at
Dunkirk (exclusive user rights).

(20) Refined products, after

transport by pipeline, or
occasionally by barge or train, are stored in what are
known as hub depots, from which they are delivered to
retailers or final consumers.

(21)

‘Logistical chain’ means the succession of distribution
stages from refinery to retailer.

1.3. Sale of refined products by networks and by

other channels

(22) To contain shipping costs, most refined products sold in
France are taken from French refineries. The rest is
exported or imported by large-capacity bulk carriers.
Fuels and other finished products produced by a refinery
are either brought into the producer’s integrated retail
network or sold wholesale (wholesale sales) to retailers,
dealers or major final customers, or even swapped with
other refiners. Wholesalers and retailers prefer to obtain
supplies of refined products locally from a depot or a
refinery.

(18) The DMM pipeline is fed by the Donges refinery
(Elf), the Donges import depot owned by SFDM (itself
controlled by Elf, see recital 134) and the Grandpuits
refinery. DMM is connected to Trapil (Levesville and
Champeaux), but this connection cannot be used to
carry products to the Paris region (the flow of refined
products is from West to East). Arrival points are the
depots at Le Mans or Saint-Gervais, La Ferté Allais
(SFDM), Grandpuits (Elf refinery) and the depots at
Châlons-sur-Marne and Saint Baussant (connection with
the Common Defence Organisation (ODC) pipeline.

(23)

In earlier decisions the Commission has defined various
markets relating to the supply of refined products at the
wholesale and retail stages. In particular it has defined a
market for retail sales of fuels (petrol and diesel) in
general and on motorways in particular and for retail
sales of domestic heating oil. Apart from motorway fuel
sales, the transaction would not directly change the
competitive situation on the retail market on account of
the pressure exerted by supermarkets. Over the years the
supermarkets have accumulated a combined market
share of around 50 %. TotalFina have a combined
market share of [20 % to 30 %].

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(24) However, a durable competitive presence on the retail
market for refined products in general is heavily depen-
dent on the availability of a logistical supply infrastruc-
ture. The supermarkets are thus important competitors
for the retail sale of fuels and have sought to gain access
to the three stages in the logistical chain (import depots,
pipelines and hub depots). They are thus in a position to
choose between two options: 1. obtain local deliveries
from refiners (who, if necessary, then arrange transport
of the product to the hub depots that are closest to their
customers’ service stations; or 2. obtain the product on
the international market (via an import depot) or from a
French refinery. In the latter two cases, they arrange for
their own transport, either by lorry (if the service stations
to be supplied are close to the refinery or import depot),
or through the pipelines and local storage in hub depots.
If the supermarkets have been able to develop and
maintain their presence on the retail fuels market, it is
thanks to this choice and the competition between the
refiners, in particular the two largest, TotalFina and Elf.

(25) The notified transaction would not only end the rivalry
between TotalFina and Elf but would also raise problems
of competition at every stage of the logistical chain
described above.

2. THE WHOLESALE MARKETS FOR PETROL, DIESEL AND
DOMESTIC HEATING OIL

imports by ship)

negotiate bulk purchases (e.g.
for
storage in the import depot. In the latter case access to
infrastructure from the import
large-scale transport
depot or refinery and access to hub depots is vital. What
is a issue here is capacity rental or transit; the refiners
hire their capacity out on an ordinary contract basis at
some of their sites.

(27) The wholesale sale of each of the refined products in
question (leaded and unleaded petrol, diesel fuel and
domestic heating oil) constitutes a separate relevant
market, distinct from the wholesale market for other
products. These products are not substitutable for each
other in terms of demand. And there is no supply
substitutability as that would depend on adjustments at
the refineries which in turn depend on many other
parameters.

(28) There is no need to distinguish between the two
categories of customers to define the relevant markets.
If there was a price differential between major final users
and customers at the retail and wholesale stages, the
latter would take advantage of arbitrage possibilities to
supply major final users. The price difference would not
be profitable as regards the wholesale market.

(29) Wholesale markets are of vital

importance for the
maintenance of competition on the retail market, as the
competitive capacity of non-integrated retailers depends
on their capacity to obtain supplies on the same terms a
s integrated retailers.

2.1. The reference markets

2.1.2. Geographic market

2.1.1. Product markets

(26) The ‘wholesale market’ means the market for the supply
of fuels to retailers (e.g. supermarkets) who are not
integrated upstream and to major final users (transport
firms). Sellers on the wholesale market include refiners
and dealers such as Louis Dreyfus and Cargill. In practice
customers can buy the product ex-(hub) depot. All
refiners have transit contracts with third parties in most
of the depots they own themselves or in which they
have holdings. Customers can also buy the product ex-
refinery or ex-import depot, either to supply their
networks of service stations near these sources (in which
case the refinery and/or the import depot will be used as
no more than a hub depot) or because they wish to

(30) The geographic market for wholesale sales is heavily
dependent on the physical geography of the logistical
chain in France. Given the infrastructure constraints on
the
the transport of refined products by pipeline,
wholesale market could appear as being regional. The
volumes of final products bought ex-refinery or ex-
import depot are commonly either consumed near to
these refineries or depots or transported by the seller by
pipeline or by other means of transport to hub depots,
which supply nearby networks of service stations. Hub
depots are thus mainly supply points for a product for
which sales are negotiated as to 25 % locally and 75 %
regionally or nationally.

(31) The French logistical

infrastructure is such that six
distinct geographical zones must be distinguished for
wholesale markets:

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(i)

(ii)

the southern zone (Provence, Midi-Pyrénées), where
products are supplied up to 90 % by the SPMR
pipeline, itself supplied by the refineries at Berre
and by maritime imports at Fos (5);

the eastern zone, supplied chiefly by the Reichstett
refinery and the TotalFina refineries at Mardyck
(Dunkirk) via the ODC pipeline and the Elf refinery
at Donges via the DMM pipeline, or by barges
navigating the Rhine (6);

(iii)

the northern zone, supplied chiefly by the TotalFina
refinery at Mardyck and the depot at Feluy
(Belgium) connected by private pipeline to the
TotalFina refinery at Antwerp, and by coastal
import depots (7);

(iv) The Normandy zone and the Paris region, supplied
chiefly by the lower Seine refineries (TotalFina,
Shell, Esso and BP) and different import depots via
the Trapil/LHP pipeline, and by the Elf refinery at
Grandpuits (8);

(v)

the western and central zones, supplied by the Elf
refinery at Donges via the DMM pipeline and
maritime imports through Atlantic ports (9).

(vi) The Rhône-Burgundy zone supplied by the Elf
refinery at Feyzin (Lyon) and by the SPMR pipeline
form the E´ tang de Berre refineries (10).

(32) TotalFina considers the geographical dimension of the
wholesale market to be national. It argues that, for one
thing, there is a major flow of refined products from one
region to another, and besides, there is no noticeable
price difference from one zone to the next.

(33) Each supply point, be it a refinery or a depot, is likely to
supply a particular hinterland, the radius of which will
depend on the cost of transporting the product to the
final destination. Several hinterlands can overlap in
terms of demand, with an impact of the uniformity of

(5) The southern region consists of

the following departments:
04/05/06/13/83/84/11/30/34/48/66/09/12/31/32/46/65/81/82/
2A/2B.

(6) The eastern region consists of
08/10/51/52/54/55/57/88/67/68.
(7) The northern region consists of

02/60/80/59/62.

the following departments:

the following departments:

(8) The Normandy-Paris region consists of the following departments:

14/50/61/27/76/75/77/78/91/92/93/94/95.

(9) The west-centre region consists of the following departments:
22/23/24/29/40/47/35/64/19/23/87/56/16/17/79/86/18/28/36/
37/41/45/44/49/53/72/85.

(10) The Rhône/Burgundy region consists of the following depart-
ments: 21/58/71/89/25/39/70/90/01/07/26/38/42/69/73/74/
03/15/43/63.

conditions of competition. The geographic markets to
be considered for the purposes of competition analysis
can cover several intersecting hinterlands.

(34) TotalFina proceeds among other things on the basis of
the existence of flows of products between specified
regions to explain that the relevant markets cannot be
regional. The Reichstett refinery, for example, adjusts its
prices in the light of ex-refinery prices at Dunkirk,
Donges, Feyzin or Fos, factoring in transporting costs.
These flows are due to the existence of pipelines that
cross these regions. This does not make it possible to do
business on the relevant market, as that presupposes
the use of depots. The overlaps between the depots’
hinterlands are apparently geographically limited and do
not suffice to ground a conclusion that a uniform price
increase in a given regional zone would not be profitable
on account of substitutable supplies from neighbouring
regions. It can be seen from an examination of the
geography of the logistics at each of the six regions
there are bunches of depots
identified above that
grouped along the pipelines and concentrated around
the major conurbations. The hinterlands of
these
bunches do not overlap. It appears that the place where
supply and demand should be analysed will generally
be confined to a regional territory according to the
boundaries of the six regions previously defined.

(35) TotalFina also explains that there are only marginal
differences between the wholesale prices charged in each
of the regions identified. But it must be emphasised that
wholesale prices are a combination of Platt’s prices
(quotation for a cargo load) and costs of transport and
storage. The costs are only a fraction of the Platt’s price,
which explains the low differences between regions. Yet
there are two Platt’s prices for refined products: a North
Sea price and a Mediterranean price. Likewise, TotalFina
itself charges internal prices for wholesale sales based on
four regions defined by reference to French refining
centres.

(36) There is therefore considerable evidence to support
the view that the geographic market has a regional
dimension. It is, however, not to be excluded that the
geographical market could have a national scope. The
data gathered by the Commission show that the bulk of
sales on the wholesale market are supplied ex-refinery
or ex-import depot (75 %). The main players on this

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market have a national presence. The supermarkets issue
national invitations to tender for volumes of refined
products to be delivered to specified places. Refiners
regularly submit daily tenders to the supermarkets on
the basis of prices calculated by reference to Platt’s
quotations (quotation for refined products on the inter-
national market) plus transport costs, depending on the
place of delivery, and a margin for the refiner.

(37) The definition of the relevant geographic market can
none the less be left open as it does not modify the
competitive analysis.

2.1.3. Substantial part of the common market

(38) Each of the six zones identified above, given their
geographical dimension and the nature of the relevant
products, partly accounted for by imports, constitutes a
substantial part of the common market.

2.2. Assessment

2.2.1. Current state of competition

(39) As can be seen from the above description of the six
regional zones, TotalFina and Elf occupy symmetrical,
complementary positions on the French market. The
equilibrium in this relationship has been conducive to
rivalry between the two groups which has been the
motive force behind competition on French fuels mar-
kets.

(40) According to TotalFina, TotalFina and Elf

together
account for [45 % to 55 %] of the quantities of petrol
available on the wholesale market for petrol a market
which has traditionally been a net exporter. The com-
bined entity accounts for [45 % to 55 %] of the quantities
of diesel available on the wholesale market, a market
which has traditionally been a net importer. The table
below gives estimated market shares calculated by the
Commission on the basis of information gathered in its
market survey.

National market

TotalFina

Elf

Combined

Refiner A

Refiner B

Refiner C

Other

Wholesale petrol

[30 % to
40 %]

[25 % to
35 %]

[50 % to
60 %]

[10 % to
20 %]

[10 % to
20 %]

[10 % to
20 %]

[< 5 %]

Wholesale diesel

[35 % to
45 %]

[15 % to
25 %]

[45 % to
55 %]

[10 % to
20 %]

[10 % to
20 %]

[10 % to
20 %]

[< 5 %]

Wholesale domestic
heating oil

[25 % to
35 %]

[15 % to
25 %]

[45 % to
55 %]

[10 % to
20 %]

[10 % to
20 %]

[10 % to
20 %]

[< 5 %]

Source: Form CO and replies to Commission questionnaires.

(41) On the demand side, one of the features of the wholesale
fuels markets is the emergence of the supermarkets in
the past fifteen years. But the supermarkets state that
they have only a small presence on the retail market for
domestic heating oil and LPG. One of the reasons given
to the Commission is that Elf and TotalFina have hitherto
supplied the supermarkets with only very limited quan-
tities of the two products. On the demand side other
independent retailers should also be mentioned; they
include Bolloré, Dyneff and Avia (Thévenin-Ducrot and
Picoty). Bolloré is present on all the wholesale and retail
markets for DHO. Dyneff has a network of service
stations in southern France. Avia is a joint logo shared
by a number of independent retailers in Europe.

2.2.2. Effects of the merger

would enable TotalFina/Elf to control each of the stages
in the fuels distribution logistical chain. By eliminating
rivalry between the two refiners, it would make the new
entity into an unavoidable part of life for all other
players on the wholesale market (competitors — refiners
or customers — retailers). The combination of this
refining position and the decisive presence in the
distribution chain would generate bottlenecks that
would make it more difficult or more expensive for non-
integrated operators such as the supermarkets and the
independents to gain access to the product.

Supply

— Control of supply sources

(42) TotalFina’s plan to acquire Elf threatens every one of the
factors that would allow a competitive wholesale market
(and therefore a competitive retail market). The merger

(43)

Following the merger TotalFina/Elf would control [45 %
to 55 %] of French refining capacity.

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Refining capacities in France

TotalFina

Elf

TotalFina/Elf

Shell

Esso

BP/Mobil

Aggregate

[25 % to 35 %]

[15 % to 25 %]

[45 % to 55 %]

[10 % to 20 %]

[10 % to 20 %]

[10 % to 20 %]

100 %

Source: TotalFina.

(44) TotalFina/Elf would also control

[50 % to 60 %]
(in capacity terms) of the import depots. This figure
underestimates TotalFina real control. It presupposes
that the BP-controlled Frontignan depot (with consider-
able capacity on paper) is a depot exerting real competi-
tive pressure on the market. The Commission’s market
survey suggests that this depot might not be so viable.
The French competition authority has established that
Frontignan has a very low throughput rate and is not
regarded as competitive. [...]. If Frontignan is factored
out, the total capacity controlled by TotalFina/Elf would

rise to [55 % to 65 %]. The calculation of
these
percentages includes the capacities of depots over which
TotalFina/Elf would be able to exert total or joint control.

(45) The figures below measure the capacities controlled by
TotalFina/Elf in terms of supply sources (refineries and
import depots) by region. The percentages indicated
here represent TotalFina/Elf’s share in each of the supply
sources and the total capacities of refineries are given
for each region.

North

Normandy/
Paris region

West/centre

East

South

Rhône/
Burgundy

Lower Seine refineries

Etang de Berre refineries

Donges

Mardyck

Reichstett

Grandpuits

Feyzin

Refineries

Import depots

Source: Form CO.

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(46) Of the 20 import depots in France, only seven would be
controlled by outsiders — CPA Dunkirk (north), Rouen
(Normandy/Paris region), CPA StockBrest (west/centre),
Picoty La Pallice (west/centre), Shell Pauillac (west/cen-
tre), EPG Ambès (west/centre) and Mobil Frontignan
(south).

(47)

It must be pointed out, however, that TotalFina/Elf
would hold a blocking minority of 38 % in CPA and
rights of first refusal over storage capacities. Moreover,

Shell Pauillac is a ship unloading and intermediate
storage terminal without any lorry loading facilities.
Products are sent to DPA Ambès (a depot controlled by
TotalFina/Elf) where the lorry loading operations are
carried out. EPG Ambès suffers from structural problems
(the depot is too small to satisfy demand and badly
located). In the Alsace region, the import depots basically
perform the function of regional ‘coastal’ or hub depots.
Their reception capacity is confined to small barges
depend on the fluctuating Rhine trade. The Picoty La

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Pallice depot is the only one that could exert fully
independent competitive pressure on imports of refined
products. Recently, however, TotalFina concluded a
rental agreement [...] in this depot [...].

(53)

Finally, assuming that the market would be regional, it
has to be underlined that these figures are merely
averages for the whole of the French territory and that
the situation is different from one region to another.

(48) Because of environmental rules and regulations, and also
of economic constraints, the construction of new import
depot is virtually impossible. The extension of an import
depot is possible in order to adapt its capacity to the
needs of the area. But this does not remedy the problem
of the saturation of import depots, the effective capacity
of which is dependent on how much use is made of the
unloading quay (an import depot is considered to be
saturated when its unloading quay used more than 50 %
of the time). Consequently, the current situation is likely
to remain much the same for the future.

(49) Each of TotalFina/Elf’s competitors owns a fairly small
import depots. This is due to their
proportion of
presence as minority shareholders in a number of import
depots.

(50)

In is reply to the Statement of Objections, TotalFina
explains that there would remain, either through the
other refiners present in France or through the capacities
of the import depots operating independently of the
new group, very substantial amounts of products avail-
able which would make it possible to cover all the needs
of non-network-market customers. This would make
the exercise of market power on the part of TotalFina/Elf
unprofitable.

(51) The Commission would point out

that TotalFina’s
calculations show three important flaws in the analysis.
First of all, the calculations performed by Total overesti-
mate the import capacity of refined products as they are
based on an assessment of a theoretical product flow
that is beyond the physical
limits of those import
terminals. The Commission contests that the rotation
ratio of those import terminals could reach the theoreti-
levels (rotation ratio of 10) as indicated by the
cal
In fact, most of the import terminals have
parties.
rotation levels of between [...]
times a year (with
exception to the terminals of Strasbourg/Mulhouse that
have rotation levels close to [...] and as such they could
not increase their capacity by more than [...] (in fact, a
number of terminals [...] are considered as already close
to being saturated). On the basis of this,
it can be
concluded that the rotation levels cannot reach the
theoretical
levels on which TotalFina has based its
calculations.

(52) Secondly, these are averages for the whole of France and
for all products (unleaded 95, unleaded 98, diesel and
domestic heating oil) sold on the wholesale markets. The
French market is, however, structurally an importing
market for diesel and domestic heating oil (together
known as distillates). On the other hand, the French
market is structurally an exporter of petrol.

(54) Quite apart from the above, it is difficult to see in what
way the availability of such import volumes might
prevent TotalFina/Elf from acting independently on the
market. Even if an import terminal could receive four
the
times the amount of products that at present,
question remains which region that depot could supply.
If the terminal is not connected to a pipeline or other
means of bulk transport, the region supplied would be
limited to a radius of at most 150 km.

(55) After having adjusted the effective capacity figures for
the import terminals, the coverage of French demand on
the wholesale markets by competing refiners and by
independent import depots falls to 50 % to 60 %. Thus,
TotalFina/Elf would be an unavoidable source of supply
for 40 % to 50 % of the French market, whereas it
currently supplies approximately 50 % to 55 %. If
TotalFina/Elf were to increase its prices, it would risk
losing a fifth of its wholesale sales (the loss of turnover
might be offset by an increase in margins), but the rivals
not integrated at the retail market level would necessarily
see their supply cost increase, which would lead to a
more competitive position of the refiners at the retail
level.

— Control of the logistical chain

P i p e l i n e s

(56) TotalFina/Elf would control the management of three
major pipelines serving France (Trapil, DMM and SPMR).
It would also be the chief user of the northern ODC
pipeline linking the north to the eastern region of France,
on which it has its own privately-operated pumping
installations and controls access by import depots to
this pipeline (Total refinery at Dunkirk). The merged
entity would also control the only depot situated in
Strasbourg with direct access to the southern ODC
pipeline (Mediterranean to Strasbourg) (11)

(11) The connection of the other Strasbourg depots to the southern
ODC pipeline seems technically possible but would be dependent
on TotalFina granting a right of way over land which it owns.

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Official Journal of the European Communities

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(57) Control of pipelines makes it possible to indirectly
control all the storage facilities fed by the pipelines in
terms of both quality of service (quotas, management of
priorities, transport of specific products) and confiden-
tiality of business dealings. It also gives access to sensitive
information about competitors’ business (traffic) on
wholesale markets.

(58) The scales of charges for some of these pipelines gives
large-scale users a privileged position through bulk
discount arrangements. And when a pipeline is saturated,
quantities are allocated in the light of past use rates,
which merely strengthens the status quo.

(59) TotalFinal explains that its major holdings in the three
main French pipelines are not such as to give it market
power. Given the rules governing the French pipelines,
ownership of capital does not guarantee privileged
access. Scales of charges are in the public domain; they
are transparent and are not discriminatory. Moreover,
their operators are subject to review by Government
Commissioners who sit on the boards of the three
pipeline companies.

(60) The existence of national rules and regulations to ensure
that infrastructure of strategic importance is used in the
public interest does not release the Commission from its
Community-law obligation to avert he emergence of a
dominant position. This is especially true where the rules
and regulations apply generally and are not designed to
enforce the competition rules.

decisions taken by the companies managing the pipe-
lines that might affect the wholesale market or the
pipeline transport market for refined products are not
necessarily taken at board level.

(62) Here, reference can be made to the opinion given by the
French Competition Council (12) on the action brought
by Trapil against the appointment of SFDM as manager
of DMM. The Competition Council took neither the
relevant rules and regulations nor the presence of the
Government Commissioners as a basis for excluding the
risk that a competitive problem might emerge. The
Commission considers that it likewise cannot take the
mere presence of Government Commissioners as a basis
for excluding the risk that a dominant position might be
crated or reinforced.

(63) According to third parties consulted by the Commission,
the rules and regulations governing the business of
pipeline managers do not offer adequate assurances as
to the setting of prices and capacity utilisation. In each
of the pipeline systems TotalFina/Elf would be at one
and the same time the controlling shareholder and by
far the largest customer. Some customers say that
TotalFinal/Elf could use the pipelines as a business
weapon to destabilise their retail business. This destabil-
isation could easily take the form of a decision to raise
prices for wholesale customers without customers being
able to oppose them.

H u b d e p o t s

(61) These considerations apply to the French Government
Commissioners’s review. Their review is not focused on
competition law and does not extend to straight control
over prices and quantities. It might thus leave pipeline
operators with sufficient margin of manœeuvre to
exercise market power. And potentially anti-competitive

(64) Regarding storage logistics, TotalFina/Elf would have
significant holdings in most of the French import depots
and most of the key depots supplying the country. The
merged entity would also control a large proportion of
the inland hub depots [45 % to 55 %] and coastal depots
[40 % to 50 %].

North

Normandy/
Paris region

West/centre

East

South

Rhône/
Burgundy

Hub and coastal depots

[70 % to
80 %]

[35 % to
45 %]

[45 % to
55 %]

[45 % to
55 %]

[45 % to
55 %]

[35 % to
45 %]

Trapil

ODC

SPMR

DMM

—

—

—

—

Control

Control

Control

—

—

—

—

Largest user

—

Control

Control

—

—

—

—

Control

Control

Control

—

—

(12) Delivered on 28 September 1993.

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Official Journal of the European Communities

29.5.2001

(65) The calculation of shares in the capacity of the hub
depots controlled by TotalFina/Elf includes the inland
hub depots, the coastal depots and the import depots
which are not linked to bulk transport facilities. Depots
that have no more than a buffer function to regulate the
flow of a pipeline, such as the Vienne depots, have been
left out of the equation.

(66)

(67)

In the north, Total,
in the course of the TotalFina
procedure, undertook to divest itself of its holdings in
two depots (DPC St Pol and EP Valenciennes) corres-
ponding to Fina’s business in the region. The addition of
Elf, which is the remaining shareholder in EP Valencien-
nes, would cancel out
the remedies
accepted by the Commission at the time of the Total/
PetroFina case. The new entity would also control the
Feluy depot in Belgium, which has a pipeline link to
the TotalFina refinery at Antwerp. The result of the
Commission’s investigation and the information given
in the notification show that the parties would control
around [70 % to 80 %] of the storage capcities under
direct control.

the effects of

In the geographical subset consisting of Le Havre, the
Seine valley and the Paris region, TotalFina and Elf would
hold shares in ten depots in the Paris region, where there
are fifteen or so. The largest depots are the Fina depot at
Nanterre and the Elf Antar depot at Gennevilliers to the
north of Paris and the CIM depot at Grigny (controlled
by Elf) to the south. The clientele of these depots consists
of large supermarkets’ own brands and domestic heating
oil distributors. The depots have balanced storage
capacities for petrol, diesel and heating oil, which means
that
independent distributors can use multiproduct
lorries. There is currently no possibility of hiring space
in a depot in which TotalFina/Elf do not have a majority
holding. Such depots as do not belong to TotalFina and
Elf do not allow third-party access or else they do not
have the requisite flexibility as they simply do not have
available volume of capacity. The new entity would
account for about [35 % to 45 %] of the hub storage
capacities under direct control in the Normandy/Paris
region.

(68)

In the west/centre region (Brittany, Nantes, Tours,
Orléans), the new entity would control the Vern depot.
This extension of the Donges refinery enables Elf to
enjoy heavy influence over the Nantes region and central
Brittany. Shipments by sea enable Elf to supply the
depots at Brest, La Rochelle and Bordeaux. The Le Mans
and Lorient areas are liable to be under a monopoly after
the merger. At Orléans, TotalFina/Elf would control one
depot (EPS) and have a holding (with Shell and Esso) in
a second depot. At Tours, the new entity would enjoy a
strong presence in two of the three depots at St Pierre
des Corps, the third (CCMP) being saturated. The new
entity would control about [45 % to 55 %] of hub
storage capacities.

(69)

(70)

In the south and south-west (Midi-Pyrénées), the new
entity would control the majority of hub depots, includ-
ing two of the three at Toulouse. Depots in the south
and south-west are often highly saturated by their
shareholders’ business (e.g. EPPA Puget sur Argens) or
regularly out of stock on account of SPMR’s business
worries. The new entity would have about [45 % to
55 %] of hub storage capacities under direct control in
the southern region.

In the Lyon region, the new entity would control the
largest depot in Lyon (EPL). This depot has the advantage
of being the only depot with riverside loading facilities
accessible to barges from Elf Feyzin. This depot, in which
Elf is the major shareholder, is the one that makes the
largest capacity available to third parties in the region,
with the Saint-Priest depot. If TotalFina were to become
the majority shareholder in EPL, it can reasonably be
expected that the depot would be far less open, given
the policy followed hitherto by TotalFina of closing its
depots to third parties. The Saint-Priest depot (CPA), in
which TotalFina/Elf would have a significant holding, is
the depot facing the greatest demand in the region and
can be regarded as saturated despite the extension of its
capacity (it has the highest throughput rate in France) in
view of the limits on the access and lorry-loading
infrastructure. The four depots at Vienne (Shell, Esso,
TotalFina and SPMR) are not substitutable for EPL or
Saint-Priest as there are no lorry-loading facilities. These
depots are in fact SPMR supply terminals. Other depots
(such as BP Clermont) are too small to meet rising
demand or else deal only with a single product, so that
independent distributors cannot use multiproduct lorries
to supply their sales outlets. Given its position in EPL
(the only depot having any sizeable capacity that has
capacity available), TotalFina/Elf could be able to capture
the future growth of the wholesale market in Lyon, [...].
The new entity would have about [35 % to 45 %] of
hub storage capacities under direct control
in the
Rhône/Burgundy region.

(71)

In the Strasbourg region, the combined entity would
control one of the three import depots (GPS) and have
holdings in one of the other two (SES). A bottleneck
already exists in the form of the SES connection to the
ODC pipeline, which is possible only via the GPS
depot, controlled by TotalFina/Elf. The new entity would
control [45 % to 55 %] of storage capacity in the eastern
region.

(72) With one or two exceptions, it is a feature of the oil
industry in France that there are few logistical facilities
that are not controlled by integrated oil firms (and new
depots are unlikely to be built in the future on account
of environmental constraints and urban sprawl, which
are more likely to prompt
the closure of existing
facilities, notably in the Paris region).

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Official Journal of the European Communities

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(73)

Unlike in other Community countries (such as Germany
and the United Kingdom), specialised storage companies
are rare in France. Operators such as Oiltanking or Van
Ommeren-Pakhoed,
for example, have only modest
market shares. VTG has already withdrawn from the
market. The only storage company expanding for the
moment is CPA; after the merger 38,8 % of its capital
would be under the control of TotalFina/Elf, which
would thus have the power to restrict any further
development.
[...] CPA thus has limited room for
manœuvre.

(74) To sum up, TotalFina/Elf would have substantial control
over imports and transport and consequently over the
availability of refined products throughout France.

— Competing refiners would also be logistically dependent

on TotalFina/Elf

(75) The market positions of the firms concerned (13) post-
merger would be as follows, based on their distribution
throughout the six regions identified above:

Position — non-network sales by product and region

1998

TFE

Competitor A

Competitor B

Competitor C

Others

[30 % to 40 %]

20 % to 30 %

10 % to 15 %

20 % to 30 %

5 % to 10 %

[25 % to 35 %]

15 % to 20 %

10 % to 15 %

30 % to 40 %

10 % to 15 %

[25 % to 35 %]

20 % to 30 %

5 % to 10 %

20 % to 30 %

5 % to 10 %

South

Petrol

Diesel

DHO

West/centre

Petrol

Diesel

DHO

Normandy/Paris region

Petrol

Diesel

DHO

North

Petrol

Diesel

DHO

East/Alsace/Lorraine

[75 % to 85 %]

5 % to 10 %

10 % to 15 %

[70 % to 80 %]

10 % to 15 %

10 % to 15 %

< 5 %

< 5 %

[40 % to 50 %]

20 % to 30 %

15 % to 20 %

5 % to 10 %

[40 % to 50 %]

15 % to 20 %

15 % to 20 %

20 % to 30 %

[40 % to 50 %]

10 % to 15 %

15 % to 20 %

20 % to 30 %

[30 % to 40 %]

20 % to 30 %

15 % to 20 %

20 % to 30 %

[85 % to 95 %]

[80 % to 90 %]

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

5 % to 10 %

[70 % to 80 %]

5 % to 10 %

< 5 %

10 % to 15 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

Petrol

Diesel

DHO

[40 % to 50 %]

< 5 %

30 % to 40 %

10 % to 15 %

[40 % to 50 %]

5 % to 10 %

30 % to 40 %

10 % to 15 %

[50 % to 60 %]

15 % to 20 %

15 % to 20 %

5 % to 10 %

(13) NB: TotalFina/Elf’s market shares for DHO are underestimated as
they do not include the percentage sold by Elf its subsidiaries.

L 143/12

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Official Journal of the European Communities

29.5.2001

1998

TFE

Competitor A

Competitor B

Competitor C

Others

Rhône/Auvergne/Burgundy

Petrol

Diesel

DHO

[70 % to 80 %]

5 % to 10 %

10 % to 15 %

[70 % to 80 %]

15 % to 20 %

10 % to 15 %

[40 % to 50 %]

30 % to 40 %

15 % to 20 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

< 5 %

Source: replies to Commission questionnaire.

(76) Competing refiners would not have the potential to
benefit from shifts in demand in response to price rises
on the wholesale market initiated by TotalFina/Elf. They
do not own sufficient hub depots to supply the whole
country. Moreover, to distribute their production, they
have to use the Trapil, DMM and SPMR pipelines, which
would be controlled by TotalFina/Elf.

(77) TotalFina has drawn the Commission’s attention to the
fact that the proportion of products obtained from its
competitors’ refineries in France and sold on the retail
market by the same competitors is higher than the
proportion of products refined by TotalFina and Elf for
their own networks of service stations. The other refiners
mainly reserve the limited number of depots that they
control for their own use; these depots have only limited
capacities that can be made available to other users.

(78) The competing refiners state that, if TotalFina/Elf raised
its prices, they could supply additional volumes in
certain regions where they have excess resources, notably
as from the lower Seine and Berre/Marseille regions.
Elsewhere, they are short of one or more categories of
product (petrol and distillates) and cannot therefore offer
resources unless they buy from competing refiners or
on the cargo market (in north-western Europe and the
Mediterranean).

(79) The capacity to import additional volumes depends on
infrastructure for receiving deliveries, and on this point
the competing refiners state that storage capacities
would be lower except in the depots where they operate
together with TotalFina and Elf. Since the competing
refiners have only minority holdings, they are by no
means sure of access to additional capacities. Given that
Exxon, for example, jointly owns 23 of its 25 depots in
France with TotalFina and Elf, Exxon’s response might

be different it TotalFina and Elf decided on a large-scale
rationalisation.

(80) TotalFina explains that it spearheaded the movement to
open up logistical capacities to non-refiner retailers.
Even accepting that this is the case, the ending of
the rivalry between TotalFina and Elf will remove all
incentives to keep logistical systems open. In many
cases, depots are jointly owned by several refiners
(‘common’ depots),
including TotalFina and/or Elf,
whose approval is therefore required if access is to be
opened up to outsiders. As long as the two operators
are in competition with each other, it is in their interests
to agree to give outsiders (particularly the supermarkets)
access to the depots that they both share with other
refiners. If access to a depot in which TotalFina has a
holding is refused, a supermarket can turn to a compet-
it can supply
ing Elf depot, so that
its network of service stations. This incentive would
disappear if TotalFina/Elf were not faced with sufficiently
substantial competition from other depots. TotalFina
and Elf are the only operators with an aggregate surplus
capacity in the storage networks. In any event, the
depots controlled by TotalFina are not very open to
third parties.

in any event

(81)

In its reply to the Statement of Objections. Elf states that
the Commission has not taken account of the degree of
openness of
the import depots held by competing
refiners. Although these refiners have transit agreements
with third parties in the majority of their depots, what is
involved here in most cases is capacity rented to the
companies buying their product and this does not have
any impact on the degree of competition in the wholesale
market.

(82) Opening depots is a meaningful exercise only if the
pipelines that supply them are also accessible at market
conditions, which would not necessarily be the case
since TotalFina/Elf would control all these pipelines after
the merger.

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(83)

It follows that competing refiners’ interests would not
be served by sparking off a confrontation with TotalFina/
Elf by not following price rises. They might well tend to
follow the same policy as TotalFina/Elf regarding price
rises on the wholesale market and the exclusion of non-
integrated retailers.

Conversely, TotalFina/Elf, given its nationwide logistical
facilities, would be capable of selling the products it
previously swapped with other refiners in regions where
the new entity was no longer seeking swaps, notably
along the southern Atlantic seaboard or in the western
part of the Mediterranean.

— Conclusion: An unavoidable part of life

(84) The TotalFina/Elf refineries would be located in each of
the six major regions identified and would enable the
new entity to deliver throughout France using its own
means.

(85) Competing refiners, on the other hand, do not operate
nationally, BP/Mobil, Esso and Shell have refineries only
in the Seine valley and the E´ tang de Berre. The analysis
shows that swaps with the other integrated oil firms,
first and foremost among them TotalFina and Elf,
account for about [...] of their supplies, with a higher
percentage in the northern region [...]. The Elf refinery
at Donges (near Nantes) which is the only refining centre
between the south of the Seine valley and the Spanish
border, supplies a substantial share of the networks of
service stations of the other refiners in this vast region.
If BP/Mobil, Esso and Shell wished to continue supplying
their networks throughout France, they would inevitably
have to look to TotalFina/Elf either to import refined
products, to transport them or to obtain them from the
refineries.

(86) Moreover, TotalFina/Elf, being self-sufficient throughout
the country, would be able to end its swap agreements
with other refiners or impose its own terms. This kind
of disequilibrium between refiners, only one of whom
has (in addition to a strong position regarding import
depots) production centres throughout the country, is
likely to seriously affect competition in an industry
where, because of transport costs and the uniformity of
the product, swaps between producers are a widespread
practice. The effect of this situation could be a substantial
increase in TotalFina/Elf’s share of the wholesale market.

(88) TotalFina has explained that ending its swap agreements
with other refiners operating in France would expose it
to the risk of reprisals in other Member States. But it
must be noted that TotalFina/Elf would be the leading
European refiner, with refineries in the United Kingdom,
Germany, the Netherlands, Belgium and Spain. No other
refiner would be able to exert pressure on TotalFina/Elf
in the other countries, being nowhere in a sufficiently
dominant position. Neither Exxon/Mobil, nor BP, nor
Shell hold a predominant position in a national market
as this will be the case for TotalFina/Elf in France. These
refiners will, as such, not have the necessary market
power that would allow retaliatory action on TotalFina/
Elf. Only a common behaviour against TotalFina/Elf
could be efficient, although this is very unlikely as the
interests and market positions held in the other Member
States vary considerably. Moreover, given that some
refiners present in Europe are not present in France (e.g.
Texaco, Conoco and Philips), the new entity TotalFina/Elf
is assured of being able to obtain supplies in Europe
irrespective of how it conducts itself in France.

(89) On the retail market, the other refiners have interests
that broadly coincide with those of TotalFina/Elf vis-à-
vis the supermarkets. The supermarkets exert strong
competitive pressure on the refiners by having lower
costs. Price alignment by the other refiners as a response
to a price increase initiated by TotalFina/Elf could not be
counterbalanced by imports as a fall back position and
would lead to increased profits for all refiners on both
markets.

(87) What is more, if TotalFina/Elf engaged in less swaps,
that would increase the other refiners’ available capacities
in certain regions. But the competing refiners have
logistics that closely match their needs and as such,
generally do not have logistic capacities to sell in France.

(90) The vulnerability of the other refiners, their retaliatory
capability outside France and the existence of convergent
interests to increase margins in both the retail and
wholesale market imply that the most rational behaviour
for the competitor refiners would be to follow TotalFina/
Elf.

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— Demand analysis: Insufficient demand-side constraints

(91)

It follows from the foregoing that in the event of a
decision by TotalFina/Elf to raise prices, it would be in
the interests of the other refiners to follow suit. The
competing refiners are better protected than the retail
competitors — the supermarkets for fuels and the
independents for DHO — against abuse of TotalFina/Elf’s
strong market position (for example where wholesale
prices for refined products are raised) because of their
vertical
integration. An increase in wholesale prices
would have limited impact on their costs whereas it
would raise costs for non-integrated competitors. Non-
integrated retailers have only partial access to the
logistical chain. Some of them have holdings in depots
(e.g. Carfuel and Distriservice) and some do not (e.g.
Siplec and Petrovex). But even those who do have
holdings in depots have them only in certain regions,
and most commonly in depots where TotalFina/Elf
retains control.

(95) Even supposing that CPA might be free to manage its
import depots as it sees fit, it is hardly likely that a
TotalFina/Elf price rise in any one of the six regions
identified could be made unprofitable by recourse to
imports. In northern region, for instance, TotalFina/Elf
could easily make CPA Dunkirk financially vulnerable
by offering DPC St Pol particularly good terms [...]. In
the Normandy-Paris region depot, a similar strategy
could be applied to the CPA Rouen depot.
In the
west/centre region, the CPA StockBrest depot is isolated
and can supply only a limited part of Brittany. The
Picoty La Pallice depot also serves a limited hinterland.
In the southern region, the Frontignan depot is the only
one not controlled by TotalFina/Elf. TotalFina/Elf could
easily pose a terminal threat to the already precarious
survival of Frontignan by [...] or by attracting its
customers to the depots at Sète or Port-la-Nouvelle.

(96)

(92) The question remains whether the purchasing power of
independent retailers in particular (supermarkets, etc.)
might impede price rises. For this to be the case, the
independents would have to call on imports, either
directly by buying on the cargo market or through
international traders. However, the supermarkets are
only partly integrated in the logistical chain. They do
not have sufficient storage capacity at import depots and
they have no holdings in the pipelines to ensure that
they can distribute their production.

then,

is clear,

It
that TotalFina/Elf would have the
capacity to oust the competing import depots or at least
to contain their competitive pressure. The combined
entity could then raise its charges for transit via the
import depots under its control with a strong likelihood
that its competitors would follow suit. This would
reduce the potential competitive pressure of imports on
possible wholesale price rises.

(93) The supermarkets are both customers and competitors
of the refiners. In 1998 they obtained [...] of their
supplies from refining companies, the balance being
covered mainly by international traders (Cargill, Dreyfus
Energie, MVW, Société Générale Energie, Lagerhauser,
Bolloré, etc.). TotalFina/Elf would be in a position to
limit the international traders’ access to the infrastruc-
tures which it controls.

(94) As has been seen, only the Picoty La Pallice depot is
currently immune from TotalFina/Elf influence. But this
depot has a capacity of 213 500 M3 which is already in
use. Even at a theoretical throughput rate of 10, the
volumes imported would not suffice to make a wholesale
price rise by TotalFina/Elf unprofitable, especially as the
depot is capable of supplying imported products to only
a small part of the west/centre region and to none of the
five other regions.

(97) The table below illustrates the power that TotalFina/Elf
would have over wholesale prices. Even supposing the
other refiners operating in France could boost their sales
in response to a TotalFina/Elf price rise, imports of at
least 5 million tonnes would be needed to balance French
supply and demand while maintaining TotalFina/Elf sales
at their present level. This would be equivalent to a
throughput rate of 5 to 6 or so at the import depots
mentioned in recital 93. But as the CPA Rouen depot is
the only one with a pipeline link, it is unlikely that these
depots would be immediately able to increase their
throughput. And competing refiners are unlikely to
have the independent logistical capacity to sell their
production in France so that, they would enjoy the
benefit of a price rise not only on the wholesale market
but also in their retail business, which would become
more competitive.

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(1998)

Total wholesale
sales

Total network
sales

Volume available
to outsiders
(production/
network sales)

Balance
non-network

Current
wholesale sales
TotalFina/Elf

Imports
minimum

(in 1 000 tonnes)

Petrol

Diesel

DHO

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

Source: Commission calculations on the basis of information in the form CO.

(98)

It is therefore unlikely that retailers would be able to
oppose a price rise. Each supermarket would therefore
pass the price rise on to the consumer. Since the current
differential exceeds [...] French centimes, which is more
than [...] of the network price (before tax), the final retail
price invoiced by retailers would remain below the
refiners’ price.

(99)

[...]

(100) TotalFina states that the merger would not place whole-
sale customers, including supermarkets, in a position of
dependence in view of the opportunities for arbitrage
available to them and the strong positions they hold on
in 1998
the retail market. According to TotalFina,
supermarkets accounted for [...] of its wholesale sales,
all products combined, and [...] of its sales of petrol.

2.3. Conclusion

(102) Post merger, TotalFina/Elf would obtain mastery of a
major proportion of supply sources and the logistical
chain (imports, transport and hub depots) for refined
products in France. TotalFina/Elf would then be in a
position to raise the prices invoiced to buyers on the
wholesale markets for petrol, diesel and domestic heating
oil either throughout France or in any of the six regions
identified without fearing that the competition or cus-
tomers would be able to make such price rises unprofit-
able. The notified transaction would accordingly result
in a dominant position for TotalFina/Elf on the wholesale
markets for petrol, diesel and domestic heating oil
having the effect of substantially hindering competition
on these markets.

3. THE MARKET FOR THE PROVISION OF STORAGE CAPACITY
IN IMPORT DEPORTS LINKED TO MEANS OF BULK TRANSPORT

(101) Whilst

it

is true that demand is concentrated and
sophisticated, this would not make it any easier for the
demand side to avoid having to obtain supplies from
TotalFina/Elf. The supermarkets have been able to
formulate an independent procurement policy (in 1998
they obtained [...] of their requirements from inter-
national traders) (14) using the logistical tools available.
Holding control over the logistical chain could allow
on the wholesale level
to punish selectively those
supermarkets or other retail players that would not be
willing to follow a price increase at the retail sales level.

(14) In 1998 France imported 23 million tonnes of refined products,
including 2 million tonnes of petrol and 11 million tonnes of
diesel.

3.1. The reference market

3.1.1. Product market

(103) Import depots may be defined as those capable of
accommodating large-capacity ships (between 30 000
types of
and 50 000 tonnes). They can store all
petroleum product and the largest ones are connected
to at least two means of bulk transport. They may
perform the same role as coastal depots and hub depots
when it comes to supplying nearby service stations, but
this is the case only with those import depots which are
not linked to any means of bulk transport.

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(104) Demand exists for the supply of import storage capacity
connected to means of bulk transport. This demand
emanates from operators located somewhere served by
the means of bulk transport linked to the import depot.

(105) In France there are eight import depots linked to means

of bulk transport (15), namely:

DPC St Pol

Jointly controlled by TotalFina ODC (but forced to go through North and east
and other refiners

the Total Mardyck refinery and
currently supplied to the tune
of 99 % by that refinery)

CPA Dunkirk

—

ODC (but forced to go through North and east
the Total Mardyck refinery)

CPA Rouen

—

Trapil, then DMM

CIM Le Havre

Jointly controlled by Elf/Com- Trapil, then DMM
pagnie Nationale de Naviga-
tion

Normandy/Paris region, centre
and east

Normandy/Parsi region, centre
and east

Stockbrest

TotalFina/Elf: 40 %

Train

West

Donges
Nazaire

DPA
Bassens

St Controlled by Elf

DMM

West, southern Paris region,
centre and east

Ambès/- TotalFina 27,9 %, Elf 22,4 %: Rail link which enables it to West

sole control after the trans-
action

send on by the trainload the
petroleum products it receives
by pipeline from Pauillac and
Ambès

DP Fos

Acquisition of
TotalFina/Elf

control by SPMR and two railway lines, South,

Rhône/Burgundy

one to Toulouse and one to region and Toulouse
Dijon

TotalFina 25,7 %, Elf 25,7 %

(106)

If the charges for services related to the provision of
import storage capacity linked to means of bulk trans-
port were to be increased for all import depots, the only
option open to the demand side would be to turn to the
coastal depots or to the large-capacity import depots
without access to means of bulk transport. But lack of
access to means of bulk transport physically limits the
functional substitutability of the depots with import
storage capacity linked to means of bulk transport. And
the coastal depots are not suited to accommodating
large-capacity vessels, so their supply costs are higher.
The market survey revealed that transport rates are 35 %
higher for 10 000 tonne barges than for large-capacity

vessels of 30 000 tonnes or more. Not only would the
capacity offered by the coastal depots be more expensive,
but it would not provide any means of bulk transport
downstream.

(15) The depots at Lorient and Port-la-Nouvelle although affording
access to large-tonnage vessels, are not connected to any means
of bulk transport, so they can trade only within a radius of 100
to 150 kilometres. The Shell Pauillac depot depends on DPA for
bulk transport, being both without any lorry or rolling stock
loading facilities and unconnected to a pipeline (other than the
connection with DPA Bassens).

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(107) Hence there is no economically viable substitute for the
import depots connected to means of bulk transport
when it comes to providing services related to the
provision of import storage capacity.

3.1.2. Geographic market

(108) As indicated above (see recital 21 et seq.), France’s
logistical infrastructure is based on the refineries and
import depots. These sources of refined products serve
to supply various French regions through five pipelines
and, marginally, by train. Demand for services related to
the provision of import storage capacity may emanate
from various regions for each of the depots in question.
The import depots on the Atlantic seabord and on the
Channel coast are linked to the west/centre, north,
Normandy/Paris region and east regions. Parts of the
west/centre and east regions may be supplied both by
DMM and by Trapil. Similarly, the east region may be
supplied by Trapil, ODC-North and DMM. These differ-
ent possibilities mean that, on the demand side, a choice
can probably be made between these import depots
linked to means of bulk transport. Only the import
depots on the Mediterranean seabord such as DP Fos
meet a localised demand without there really being any
directly substitutable depots. DP Fos thus supplies
the south and Rhône/Burgundy regions. Hence two
geographic markets corresponding to the northern half
and the southern half of France may be defined. The

geographical market definition can be left open, as it
does not affect the competitive analysis.

3.1.3. Substantial part

(109) The geographic markets so defined (a northern zone and
a southern zone or a national market) each constitute a
substantial part of the common market owing to their
geographical extent, their population and the role of
imports in trade in refined products between France and
the other Member States.

3.2. Assessment

(110) [...], exercising control over its own logistics is, for an
operator, ‘indispensable if it is to control operations in
terms of quality, security of supply, commercial flexi-
bility and speed of reaction to crises’. The Commission
has calculated the size of the shares of capacity on the
basis of the nature of the control (sole or joint) exercised
by TotalFina/Elf over the companies owning the depots.
The capacities blocked by their being leased to Sagess
have not been deducted from the operational capacities.
According to the calculation, even including Frontignan,
TotalFina/Elf would control [50 % to 60 %] of all import
storage capacities either solely [40 % to 50 %] or jointly
[0 % to 10 %].

(111) At the regional level, the merger would bring about the

following situation:

North: north/Normandy/Paris
region/west/centre/Alsace Lorraine

South: south/Rhône/Burgundy
(minus Frontignan)

Import depots linked to means of bulk
transport

[65 % to 75 %]

[90 % to 100 %]

(112) TotalFina has indicated that the new group would not
be in a position to act independently with regard to the
allocation of storage capacity for imported refined
products, as more than half of these infrastructures
would remain under the, at least partial, control of
operators independent of the new group having suf-
ficient market supply capacities to satisfy demand.

(113) In the case of joint control over depots by TotalFina/Elf
in conjunction with one or more third parties, the
question raised by the notifying party is whether these
depots would run counter to a strategy of exercise of
market power on the part of TotalFina/Elf. This is
unlikely, given the ensuing situation of deadlock in the
governing bodies of these structures. If the third party
shareholders would be refiners, their interests would be
aligned with those of TotalFina/Elf in order to foreclose
access to the terminals for the non-refiners. In case the

third party shareholders are not refiners, they would be
much more affected than TotalFina/Elf (which has many
activities) by a blocking situation.

(114) Even if the storage capacities held by competing refiners
are not at present being used optimally, those refiners
will tend to maintain a volume of strategic storage
capacity in order to offset any production capacity losses
(both temporary and structural) (16), to permit exports

(16) The level of imports might increase in the years to come,
for example because of increasingly stringent product quality
specifications, some domestic refiners having temporary diffi-
culty producing the new quality (lower aromatic, benzene and
sulphur contents).

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where they have surplus local production capacity or
distribution towards the interior of France, or to import
the product into regions where production capacity
cannot satisfy demand. Lastly, even if there were suf-
ficient storage capacity to meet additional demand for
petrol, the storage capacities for domestic heating oil
and diesel are significantly smaller.

(117) The same arguments as those put

forward in the
preceding paragraphs lead to the conclusion that the
lead to the creation of a dominant
transaction will
position held by TotalFina/Elf in the above described
market.

(115) In what concerns the southern region, the functioning
of DP Fos will be seriously altered. The shareholders of
this terminal are: TotalFina (25,7 %), Elf (25,7 %), the
independent storage supplier Vopak (21,3 %), the Italian
refiner Agip (13,8 %) and the independent retailer
Thévenin-Ducrot (7,7 %). The shares held in the capital
give access to a proportional volume of storage capacity.
If one would want to rent part of this storage capacity,
the commercial management of renting this volume has
to be entrusted to the operator of the terminal. Pre-
merger, each shareholder had an interest in putting these
unused capacities in a pool managed by the operator.
Post-merger, TotalFina/Elf will be both the most
important shareholder and the operator. As such, TotalF-
ina/Elf will be in a position to control the capacities
made available by third parties. Through the notified
transaction, TotalFina/Elf would gain control of the DP
Fos import depot, which faces marginal competition
in regard to import storage in the south and the
Rhône/Burgundy region. This competition would be
from the depots at Frontignan and Port-la-Nouvelle,
which, despite having substantial capacity, are able to
supply only locally for want of means of bulk transport.
As stated above, the attractiveness of Frontignan was
called into question by the market survey.

3.3. Conclusion

(118) TotalFina/Elf would therefore be able to corner the
logistical tools for storing imported refined products
and to make it more difficult and more costly for
independent operators to gain access to the markets for
the distribution of refined petroleum products. The
notified transaction would lead to the creation of a
dominant position on the markets for the supply of
import storage capacity connected to means of bulk
transport.

4. THE MARKET FOR SERVICES RELATED TO THE TRANSPORT
OF REFINED PRODUCTS BY PIPELINE

4.1. The reference market

4.1.1. Product market

(116) As far as the northern half of France is concerned, the
only competition to TotalFina/Elf in this market for
services related to the provision of
import storage
capacity linked to means of bulk transport would be
from the independent wholesaler CPA (depots at Dun-
kirk, Rouen and Brest). As stated earlier, the new entity
would hold a blocking minority in CPA.

(119) Pipelines

transporting finished petroleum products
(petrol, diesel and domestic heating oil) are logistical
tools used for the collection and distribution of refined
products by different petroleum operators, namely
refiners, independents and supermarket chains. Indepen-
dent pipelines systems are, like oil depots, a prerequisite
for the maintenance of a competitive environment in
the market for the distribution of fuels.

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(120) The main pipeline systems are as follows:

Zone

Le Havre/Paris

Mediterranean/Rhône

Donges/Melun/Metz

ODC

Pipeline

Operator

Share ownership

Trapil

Trapil

SPMR

Trapil

DMM

SFDM (before 1993 Tra-
pil)

(35

TotalFina
(27 %), Esso (11,67 %), BP (14,1 %) + Trapil
(6,42 %), Shell (14,62 %), Esso

(32,5 %)/Elf Elf (49 %)/CNN (31 %)/
(5 %), Port of Nantes St Nazaire
(10 %) / Bolloré (10 %)

%)/Elf TotalFina

(14,16

Mobil (5,74 %)

%),

BP
(12,16 %), Shell (16,16 %)
Mobil
(3 %), Petrofrance
(1,55 %), TD (0,8 %), Pro-
petrol (0,55 %)

ODC

Trapil

NATO

Average throughput

450-1 800 m3/h

550-1 200 m3/h

360 m3/h

Diameter (inches)

10/12

Origin: refining/im-
port

[...]

Traffic in tonnes in
1995

Traffic in tonnes in
1998

18 678

20 967

10/12

[...]

8 448

9 020

10/12

[...]

[...]

2 308

2 050

2 949

2 692

(121) The business of transporting finished petroleum prod-
ucts is generally done ‘in-house’ by most refiners,
it
being they who transport the finished products from the
import depot or from the refinery to their own storage
infrastructures. Historically (17), refiners have always col-
lectively held the majority of shares in the companies
which operate the pipelines. These same refiners are also
the main users, and hence the main customers, of the
pipeline operators. However, access to the pipelines may
also be open to customers who are neither refiners
nor necessarily shareholders in the pipeline operating
companies, such as supermarkets. There is therefore a
market for services related to the transport of refined
products by pipeline.

(122) Apart form pipelines, barges and rail may be used to
transport finished products over large distances. Pipeline
use ranks first with 72 % of all volumes transported
within France, followed by rail at 15 % and barges at
13 %.

(123) The pipeline is the cheapest means of transport. Other
means of transport have almost disappeared in regions
served by pipelines. Where there is no pipeline, rail use
predominates. However, rail is used only if there are

specific loading facilities, and framework agreements
must
first be concluded with the SNCF. Once any
discounts have been deducted, these agreements make it
possible to arrive at a transport cost which matches the
cost of using a pipeline. In practice, instances of such
agreements being concluded are rare, one such being,
however, that reached with the DP Fos import depot,
from which the Toulouse and Dijon depots are supplied
by rail.

(124) Rail costs more, however, on average [...], there is more
uncertainty surrounding the scheduling and duration of
the transport operation, and the infrastructure and
loading/unloading costs are such that transport by rail is
less practical than transport by pipeline. It is noteworthy
that it has developed in order to supply two regions
where there is either no pipeline (Toulouse) or where
the SPMR pipeline is saturated and the ODC one is
substandard (Dijon). It would appear, therefore, that rail
must be excluded form the relevant market.

(125) Transport by lorry, apart

form being much more
expensive,
is usable only over distances of between
30 km and 50 km in densely populated areas and
150 km elsewhere. It is therefore not substitutable with
transport by pipeline.

(17) The distribution of pipeline shares is based on market shares

(126) The table below shows the cost of transport according

from the 1950s.

to the means used (less handling costs):

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Cost of transport

FRF/t/km

Pipeline

Lorry

Rail

Trapil
SPMR
DMM

20 tonnes
38 tonnes

2 000 tonnes
1 000 tonnes
Wagon

Ship (10 000 tonnes)

Le Havre to Bordeaux (1 100 km)
Fos to Port-la-Nouvelle (300 km)

Barge

Reichstett to Mulhouse

[...]
[...]
[...]

[...]
[...]

[...]
[...]
[...]

[...]
[...]

[...]

(127) These price differences must be assessed bearing in mind
the extreme sensitivity to price variations of demand for
fuel at the wholesale level. A price increase of just 1 %
on average can lead to customer losses.

for the transport of petroleum product volumes in case
of quota restrictions, as these restrictions are calculated
on the basis of the volumes one has transported during
the past three years.

4.1.2. Geographic market

(128) For reasons similar to those set out above with respect
to the market for the provision of storage capacity in
import depots linked to means of bulk transport, the
geographic market may be divided into two zones. The
first covers the northern half of France and is supplied
by Trapil, DMM and ODC, and the second covers the
southern half (including the Rhône corridor) and is
supplied by SPMR and marginally by the ODC South.

4.2. Assessment

(131) In what concerns the access to the pipelines, there is no
discrimination between shareholders and third parties.
in what concerns the Trapil system, third
However,
parties have the tendency to rely on their suppliers for
transporting the whole of their product volumes as
Trapil applies a rebate per tranche of volume transported
[...]. The average rebate of a refiner was situated in 1998
around [...]. There are no rebates on volumes transported
by PMR or DMM. Trapil, SPMR and DMM each base
their tariffs on the basis of volumes of transport in
tonnes, and on the basis of the distances covered. To
this basis tariff, surcharges are added for fuels [...].

4.2.1.

Functioning of the pipelines and the current
competition

— Competition between pipelines and within the pipeline

— The commercial functioning of the pipelines

(129) The tariffs, flow rate, the flexibility of the batches, the
frequency of the exploitation cycles and procedures are
similar for all three major pipleines (DMM, Trapil and
SPMR).

(130) The participation held in the three major pipelines are
of a financial nature rather than giving (quota) rights to
transport volumes. However, they give priority rights

(132) On the above markets, competition is conducted at two
levels. First of all, pipelines are competing against each
other (for instance DMM against Trapil). Secondly,
competition may take place on the level of the pipeline
itself. Refiners are re-sellers of transport services by
pipelines, competing against each other and against the
company that operates the pipeline. However, where the
pipeline is controlled by any one of them, and is largely
used for the transportation of products delivered by
shareholders, the there is a strong incentive for aligning
the pipeline company’s interests on those of the refiners.

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4.2.2. The effects of the concentration in the
market for the provision of services for
transporting petroleum products per pipe-
line in Northern France

— Effects on the competition within pipelines

T r a p i l

(133) Trapil is majority-owned by the refiners operating in
the lower Seine region. A number of non-integrated
operators have expressed the view that the pipeline’s
operation now primarily meets the needs of
these
refiners, who have a community of interests. However,
it should be noted that in the pre-merger situation,
majorities could form around the two main share-
holders, TotalFina and Elf. Moreover, with Elf not being
established as a refiner in the lower Seine region, its
incentives and behaviour might differ from those of
the lower Seine refiners. Post-merger, TotalFina would
control Trapil and as such the day-to-day management
of the pipelines. The lower Seine refiners would become
practically the only shareholders in Trapil, with the
TotalFina/Elf group as leader, who, in addition, would
control the CIM import terminal and the most important
refinery feeding into the Trapil pipeline. For the other
refiners,
the incentive to collude would therefore
increase.

— Effects on the competition between pipelines

D M M

(134) Elf holds 49 % of SFDM, the company that manages the
DMM pipeline (Compagnie Nationale de Navigation:
31 %, Bolloré Energie: 10 %, Port Autonome de Saint-
Nazaire: 10 %) and is entitled to appoint four of the
eight members of the Board of Directors. The Chairman
of the Board is de jure a representative of Elf and has a
casting vote. The pipeline is fed mainly by Elf refineries
(Donges and Grandpuits) and Elf is by far its biggest
customer. Elf
therefore controls SFDM. [...]. Transit
requests from non-shareholding third parties are appar-
ently dealt with directly by SFDM’s general and sales
managers. [...].

(135) The DMM pipeline is of strategic importance to Elf; the
route it takes follows an imaginary line between the Elf
refineries at Donges and Grandpuits and the Elf-Atochem
petrochemicals complex at Carling in Lorraine. DMM
enables Elft to sell within France a significant part of the
surplus production of its Donges refinery and hence to
reduce its exports.

O D C

(136) ODC is managed by Trapil. The ODC pipelines are little
used owing to their outdated configuration. To optimise
outlets of the Dunkirk refinery, TotalFina has invested in
upgrading the part linking Dunkirk to Cambrai (pump
equipment). [...]. For these reasons, TotalFina will have a
decisive influence that will be further enhanced by the
transaction on the ODC-North.

(137) TotalFina/Elf would hold 61 % of the capital of Trapil and
would control or would have a determining influence on
the two pipelines that could function as imperfect
substitutes for Trapil (DMM for Orléans, Tours, south of
the Paris region and the east of France, ODC-North for
the east of France).

(138) As to the Paris region, all the distribution depots are
currently supplied by Trapil, apart from the terminal at
La Ferté Alais, which is supplied by DMM. Nevertheless,
the DMM pipeline is a potential competitor of the
LHP/Trapil pipeline. The DMM’s charges, throughput,
batch flexibility, operating cycle frequency and operating
procedures are similar to Trapil’s.

(139) The products transported by DMM also compete with
ODC. They go down the northern ODC pipeline from
Dunkirk as far as the SFDM depot at Châlons-sur-Marne,
then they continue on to Langres before going up to the
Strasbourg depots. The pipeline does not yet use its
nominal capacity of 5 million m3
(1998 traffic:
3,4 million m3), which could be increased readily to
7 million m3.

(140) DMM may be used to exert competitive pressure on

Trapil. [...].

(141) In a similar vein, the Competition Council, seised by the
Ministry for Economic and Financial Affairs, delivered
an opinion on 28 September 1993 in which it took the
view that,
if Trapil’s bid to run DMM were to be
accepted, this would lead to a strengthening of the
dominant position already held by Trapil in the transport
of refined products by pipeline to the Paris region.

(142) The new group TotalFina/Elf would account for more
than [...] of the DMM pipeline’s traffic (by volume) and
would own [...] of the refining capacity linked by DMM
and Trapil to the Paris region. Competition would be
considerably weakened as a necessary consequence of
one of SFDM’s shareholders being a refinery which
controlled and was the main supplier of products to the
two pipelines competing with DMM (Trapil and ODC-
North).

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(143) Concluding, the notified concentration will lead to a
dominant position for TotalFinal/Elf on the market for
the provision of services for transporting petroleum
products per pipeline in northern France.

4.2.3. The effects of the concentration in the
market for the provision of services for
transporting petroleum products per pipe-
line in southern France

— Effects on the competition within pipelines

S P M R

(144) This pipeline would be controlled to the extent of 51,6 %
by TotalFina/Elf after the merger. Elf and TotalFina hold
32,5 % and 14,1 % of the capital respectively, and Trapil,
which would be controlled by TotalFina/Elf, holds 5 %.
The resulting total participation will give the new entity
a veto right on the operational management of SPMR
and as such a form of control, as in fact, the decisions
are taken by two-thirds majority.

(145) SPMR’s operation has been entrusted to Trapil for an
indefinite period (subject to three years’ notice). The
main shareholders of Trapil and SPMR have drawn up a
plan aimed at implementing synergies in order to reduce
their managements costs.

(146) SPMR has sometimes been subject to quota restrictions,
reducing volumes to as much as 50 %. This has happened
notably in response to occasional saturation at times of
very heavy demand for domestic heating oil during cold
spells and in the light of the pipeline’s state of repair. In
such cases, the allocation of volumes is calculated on the
basis of the volume transported by the party in question
during the past three years and hence works to the
advantage of the large refiners — the main ‘historical’
users of these installations — and to the disadvantage of
the supermarkets and other independents.

(147) TotalFina’s action plans mention these supply disrup-

tions. [...].

(148) After the notified transaction, SPMR would be controlled
by TotalFina/Elf and its incentives would be aligned on
those of
its main shareholder, whereas before the
transaction the various refiners holding a share in SPMR
have had to strike a compromise between their various
objectives and, in particular, take account of the signifi-
cant presence of Elf, which is not an Etang de Berre
In addition, TotalFina/Elf controls the only
refinery.

import terminal that is connected to the PMR, DP Fos.
By controlling the access of imports to the pipeline, by
using its predominant position in the SPMR’s capital and
the control over the day by day management of SPMR,
TotalFina/Elf would be in the position to increase prices
for the provision of refined product transport services
for retailers.

— Effects on the competition between pipelines

(149) The ODC-South pipeline is currently poorly used. It is
possible that the section of the ODC-South pipeline that
starts at the Etang de Berre refinery complex (without
being connected to DP Fos) supplying Strasbourg will be
modernised with the shut down of the Reichstet refinery
in mind. Since this is not factual as yet, the modernis-
ation program can as such not be taken into account for
the competitive analysis in the light of this notification.

(150) Concluding,

the notified concentration would give
TotalFina/Elf significant market power in the market for
the provision of services for transporting petroleum
products per pipeline in southern France on the basis of
their control in SPMR and through the establishment of
a leader amongst the other refiner resellers of transport
services in the SPMR.

4.2.4. The control exercised by the Government

Commissioners

(151) TotalFina argued that the merger would not result in the
new group operating the pipelines to the detriment of
the other market players, given the protective legislation
which governed these transport facilities (the Boards of
Directors of Trapil, DMM and SPMR meet in the presence
of representatives of the French State who have the
power and the duty to ensure that the general interest is
safeguarded) and the economic realities to which their
operation was subject.

(152) The Commission notes that market power could be
exercised at levels which were not discussed by the
Directors and were thus invisible to the Government
Commissioners. For example, with the merged entity
having total control of pipeline transport,
it could
prevent independents from introducing new or specific
products e.g. by requiring that branded products be
transported separately or in a period when the specifi-
cations are changing (in France, super leaded is currently
being replaced by high-octane super unleaded 98).

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(153) Lastly, the supervisor function performed by the Govern-
ment Commissioners in no way undermines the freedom
of the pipeline operators to take decisions. They could
still have sufficient room for manoeuvre to exercise
market power. The Commission is thus unable, on
the sole basis of the presence of the Gouvernment
Commissioners, who’s role it is to sanction eventual
abuses occurring after the creation or reinforcement of
a dominant position has taken place, to rule out the
creation or strengthening of a dominant position.

diesel. On the demand side, there is no substitutability
between these products as motorists have to use the
type of fuel that is compatible with their vehicle. At the
distribution level, both products are always available at
the same point of sale. Moreover, the market shares for
each type of
fuel coincide more or less with the
combined market shares. Consequently, for the purposes
of the present case, the relevant product markets in the
retail sales channel cover fuel retailing as a whole.

4.3. Conclusion

(154) The notified transaction would eliminate any compe-
tition that there might be between the various pipelines.
For example, DMM competes marginally with Trapil for
the supplying of the Paris region and the region of Le
Mans, Tours and Orléans. Similarly, DMM competes
with ODC for the supplying of eastern France.

(155) Since TotalFina/Elf would control the companies that
operate Trapil and DMM, it is reasonable to assume that
no competitive pressure would henceforth be exerted as
between these two pipelines. Moreover, the acquisition
of a holding in SFDM by one of the lower Seine refiners
could only limit the incentives for DMM ’s operator to
exert competitive pressure on the main means of
transporting refined products from the Seine valley
refinery complex.

(156) The notified transaction would therefore lead to the
creation of a dominant position on the part of TotalFina/
Elf in the markets for the transport of refined products
by pipeline in the northern and southern halves of
France.

5.

SALE OF FUELS ON MOTORWAY

5.1. The reference market

(158) There are several categories of expressway in France,
such as franchised, or toll, motorways, toll-free motor-
ways, perimeter/urban motorways and some trunk
roads. The first category are run by companies whose
business consists in building and operating motorways,
in return for which they are allowed to charge user-
motorists a toll. French motorways are owned either by
the State or by local authorities, or wholly or partly by
private or semi-public companies. The latter are entitled
to build and operate motorways under
franchises
granted to them by the national or local authorities.
They in turn grant franchises to fuel retailers for the
operation of service stations. Motorway franchises are
granted for periods of from 15 to 30 years, but those
granted directly by the State or by local authorities
generally last 30 years.

(159) A distinction must be made in the market for the sale of
fuel by service station networks according as to whether
the service stations are situated on or off motorways.
This distinction is necessary in view of the notable
differences in competitive conditions which characterise
the sale of fuels by the two categories of service station.

5.1.1. Product market: motorway service stations
are in a separate market from that for the
sale of fuels off motorways.

— Introduction

(157) Fuel retailing comprises the sale of fuel to motorists by
service stations. The fuel in question is mostly petrol or

(160) TotalFina considers that the retailing of fuel on French
motorways does not constitute a market separate from
that for the distribution of fuel off motorways. It argues
that consumers always have a real choice between
service stations located on or off motorways. Vehicles
have a range of more than 600 km, compared with the
average distance driven on a motorway of about 100 km.
Similarly, the traffic on motorways is constantly being
renewed, there being entries and exits on average every
30 km. Motorists always have the option of filling up at

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an off-motorway service station, whatever their route.
These factors result in motorways being permeable vis-
à-vis the off-motorway sector, a very low rate of
utilisation of motorway service stations (of the order of
[...] of all traffic) and a fall
in the volumes sold on
motorways. Moreover, in France motorists who are not
frequent users of a section of motorway are kept
regularly informed by special brochure of any price
differences between motorway service stations and other
service stations.

(163) Despite being partly justified by the higher costs incurred
by operators (due, among other things, to the obligation
to pay a licence fee to the motorway operator, to stay
open 24 hours a day and to provide ancillary services,
etc.), this price difference would not be sustainable if
motorway service stations were actually in competition
with other service stations near the motorway. If the
consumer had a genuine choice between the two
alternative refuelling possibilities, prices would even out
around a single market price that reflected supply both
on an off motorways.

— Price differences point to there being separate markets

(161) According to data supplied by TotalFina, the prices
charged on motorways for 98 octane unleaded petrol
are [...] higher (average for the period from 1 January
1998 to 30 September 1999) than those charged off
motorways. This price difference does not, however,
reflect the difference in average prices on the market as
it is based on the prices invoiced by TotalFina. A
comparison between the prices invoiced by TotalFinal
on motorways (which are representative of the prices
invoiced) and those invoiced by supermarkets off motor-
ways indicates, on the contrary, an average difference of
the order of [...] over the same period. A comparison of
the average prices on motorways for all brands with the
average prices off motorways for all brands shows that
on-motorway prices were [...] higher than off-motorway
prices in 1998 (as opposed to [...] in 1997 and [...] in
1996).

(162) In its reply to the Statement of Objections, TotalFina
argued that the Commission could not base its definition
of a separate market on a price differential alone,
especially in view of the fact that price differences
between service stations on and off motorways were the
same as those between off-motorway service stations. In
1998 the average prices charged by TotalFina (the refiner
with the highest average prices) off
the motorway
network were [...] higher than the average supermarket
prices and [...] higher than the average off-motorway
prices, but [...] lower than the average on-motorway
prices for all brands. This argument is not convincing.
First, as explained in this Decision, the difference in
prices between those charged at motorways and those
charged outside motorways is the result of the different
conditions in which supply meets demand. The compari-
son between price differentials as indicated by TotalFina
is irrelevant in the sense that, off motorways, there is
no geographical continuity between service stations
charging a higher price as there is on motorways.

(164) Similarly, an examination of the relationships between
daily or weekly price variations between the off-motor-
way and on-motorway averages provided by TotalFina
for the period 1 January 1998 to 30 September 1999
reveals very little or no correlation ([...]), bearing in
mind the uniformity of the wholesale prices for this
distribution activity. Off-motorway prices tended to
adjust more quickly to falls in the Platt’s in 1998 than
on-motorway ones. The difference between average pre-
tax prices of 98 octane unleaded petrol increased from
[...] centimes a litre in January 1998 to [...] centimes in
December 1998. Conversely, the subsequent rise in the
Platt’s was not accompanied by a reduction in that
difference, reaching as it did [...] centimes in September
1999

(165) Finally, the existence of important price differentials
between sales of motor fuels on motorways in a general
sense and sales of motor fuels outside motorways is
recognised in the tender documents of the departmental
directorate for equipment (Directions départementales
de l’équipement/DDE). The DDE is the licensor granting
licenses for service stations on non-licensed motorways.
[...].

— Demand for fuel on motorways is subject

to factors
different from those which influence demand for fuel off
motorways

(166) A study of average consumption both on and off
motorways (see following table) shows identical trends
for the sale of fuels in both places. It would not appear,
therefore, that there has, as TotalFina maintains, actually
been any shifting of demand towards off-motorway
service stations. This argument is accordingly invalid as
a means of proving that the two categories of service
station are in competition with one other.

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Volume sold on motorways (1 000 ton-
nes)

— Petrol

— Diesel

Retail sales (1 000 tonnes)

— Petrol

— Diesel

1994

1995

1996

1997

1998

908

1 449

852

1 519

799

1 509

788

1 587

781

1 684

2 357

2 371

2 308

2 375

2 465

16 122

15 379

14 738

14 377

14 289

15 649

16 532

17 139

18 118

19 005

31 771

31 911

31 877

32 495

33 294

(167) In its reply to the Statement of Objections, TotalFina
provided further series of data which showed, it argued,
that sales of fuel on motorways have not matched the
rise in the number of kilometres travelled on the
motorway network. TotalFina explained this by refer-
ence to competition from supermarkets, which were
making more sales at the expense of motorway service
stations. This explanation takes no account of the change
in the nature of motorway traffic, with unit consumption
falling and the share of short-distance transit increasing.

(168) Demand for fuel on motorways would appear to respond
to factors other than those influencing demand for fuel
off motorways. Motorists take a motorway in order to
benefit
from a faster traffic flow and the creature
comforts associated with motorways, such as refuelling
facilities, food, rest points, etc. One consequence of their
choice is a reduced responsiveness to fuel prices. While
the fact that they have to pay a toll may increase their
reluctance to lose time searching for a cheaper service
station off the motorway, this is not a determining
factor. There is therefore no reason to distinguish
between motorway service stations according to whether
or not a toll
is charged (for the same reasons, the
German competition authority has concluded in the past
that German motorways, though not subject to tolls,
formed a separate market from the rest of the fuel
distribution market). [...].

(170) Thus, in explaining that only a small proportion of users
buy fuel on the motorway and that this choice is
influenced only in part by price levels, TotalFina merely
underscores the distinct nature of
this demand by
comparison with demand for fuel off motorways.

(171) The dissimilar nature of the demand for fuel on motor-
ways is due also to its seasonal charachter. A large part
of annual sales on French motorways takes place during
the holiday season. In the case of petrol, the two months
of July and August alone account for more than 30 % of
sales (20 % in the case of off-motorway service stations).
If the months of April and May are added, the figure
increases to approximately 50 % of annual sales. Despite
being less marked, the same trend is also visible in the
case of diesel. Generally speaking, all months which
include a holiday period see a rise in sales.

— Distinct conditions of entry and of competition

(172) The vast majority of service station operators on toll
motorways are vertically integrated petroleum pro-
ducers/refined who sell their fuels under their own brand
names. Not only do they frequently operate motorway
service stations but they also own them. In any event,
they have absolute and centralised control over the sales
policy of their motorway service stations as far as fuel
sales are concerned. The running of motorway service
stations would appear to differ from that of off-
motorway service stations. [...].

(169) In its reply to the Statement of Objections, TotalFina
insisted that consumers exercise free choice in deciding
to stop to refuel at a motorway service station when
they could equally do so off the motorway. [...].

(173) [...].

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(174) The brands of the refiners present on French motorways
are six in number (TotalFina, Elf, Shell, BP, Esso and
Agip). On the entire French motorway network, only
three non-refiner operators have been able to establish
themselves, namely two independents (Dyneff and Avia)
and one supermarket (Leclerc). They account for less
than 2 % of all service stations and volumes. The
difference compared with the structure of supply on the
off-motorway market is considerable; Apart from the
presence of supermarkets, which make up over half of
the market for the sale of fuels, a multitude of other
operators, both refiners and independents, are active
there. Thus, in all the internal documents concerning
fuel retailing handed over to the Commission, TotalFina
is careful
to calculate the average price difference
compared with supermarkets in the case of its off-
motorway prices.

(175) It should also be noted that the conditions governing
entry to the motorway market differ appreciably from
those governing entry to the off-motorway market.
In order to operate a motorway service station, an
authorisation in the form of a sub-franchise must first
be obtained from the motorway operator (or directly
from the State in the case of non-toll motorways).
Tenders are invited for this purpose and sites are
allocated on the basis of tenderers’ ability to meet certain
specifications. Further to a 1992 agreement between the
French Union of Oil companies (UFIP) and the Union of
Toll Motorway Companies, existing motorway service
station operators may have their franchises renewed
provided they enter into various financial commitments
to do with developing their sites. This could result in
some franchises becoming more or less permanent,
thereby limiting access to the market for new entrants
even further.

— Conclusion

(176) It follows from the foregoing that demand for fuel on
motorways is distinct and different in nature from off-
motorway demand and that the supply of fuels on
motorways is not constrained by the supply of fuels
off motorways. The significant and persistent price
differences between fuels sold on and off motorway
confirm this. The relevant product market is therefore
that for the sale of fuels on motorways.

5.1.2. Geographic market: there is a chain of
substitutability between service stations on
each motorway

(177) TotalFina argues that the analysis of competition con-
ditions on the motorway should be carried out for
motorway sections of 100 to 150 km.
It supports
this view by referring to the Total/Petrofina decision.
However, it fails to observe that the geographic defi-
nition of the market was left open. In the Exxon/Mobil

decision under Article 8 of the Merger Regulation, on
the other hand, a definition was used which covered all
toll motorways.

(178) The analysis suggested by TotalFina is artificial since it
does not reflect the domino or chain effect from one
station to another. The average distance between two
motorway service stations is around 40 km. According
to the information provided by TotalFina, service
stations using the brand name ‘Total’ [...]. The fact that
each service station conducts a similar survey in its turn,
pleads for a market definition comprising at least all the
service stations on one motorway.

(179) TotalFina argues that motorway service stations on
sections of the franchised motorways where drivers have
not yet had to pay the toll are not subject to the same
competitive constraints as service stations located on
sections beyond the tollbooths.

(180) While such data were not available in previous cases, in
this case TotalFina supplied the weekly surveys of prices
charged by its own motorway service stations and by
their competitors. On the basis of these data,
it is
possible to refine the argument used in the Exxon/Mobil
case, which was based on inter-tollbooth motorway
sections. Prices charged by service stations after the
tollbooths do not differ significantly from those charged
by other motorway service stations.

(181) The only exceptions which can be identified from
looking at the average prices charged are the following
service station: [...]. These stations are probably located
on sections of motorway used essentially for daily
journeys. For example, the [...] station [...] surveys the
prices charged by the [...] station opposite and the two
stations on the neighbouring trunk road [...].

(182) It should be noted that the price surveys indicate that
service stations on motorways (or sections of motorway)
which are not franchised, [...], charge prices which are
similar to those charged by stations located on franchised
motorways. These motorways should therefore be
included in the market.

(183) None the less, a number of motorways with prices close
to those charged on the off-motorway market should be
excluded form the relevant market. Most of
these
motorways are located in urban areas, for example [...].

5.1.3. Geographic market: most motorways inter-
sect one another which in practice means
that the market extends the sale of fuels
across the entire motorway network in
France

(184) The following table illustrates the degree of intercon-
nection between the various French motorways.

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L 143/27

9
A

6
8
A

5
8
A

3
8
A

1
8
A

1
1
A

8
A

5
7
A

2
7
A

1
7
A

7
A

4
6
A

3
6
A

2
6
A

0
2
A

1
6
A

6
A

7
5
A

5
5
A

2
5
A

1
5
A

0
5
A

5
A

E
4
A

9
4
A

8
4
A

7
4
A

6
4
A

3
4
A

2
4
A

1
4
A

0
4
A

9
3
A

6
3
A

5
3
A

1
3
A

9
1
A

8
2
A

6
2
A

5
2
A

3
2
A

2
A

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

1
A

2
A

6
1
A

3
1
A

4
A

5
A

6
A

0
4
A

1
4
A

2
4
A

3
4
A

6
4
A

7
4
A

8
4
A

9
4
A

1
1
A

5
3
A

6
3
A

9
3
A

8
A

0
5
A

1
5
A

2
5
A

5
5
A

7
5
A

1
6
A

2
6
A

3
6
A

4
6
A

7
A

1
7
A

2
7
A

5
7
A

9
A

0
1
A

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(185) The degree of interconnection between motorways gives
rise to a chain reaction effect extending from one
motorway to another. Thus, a station located near a
junction between two motorways will take account,
when setting its prices, of the prices charged by its
competitors on both motorways.

of Infrastructure, Transport and Housing’s department
of technical studies on roads and motorways show that,
on average, 10 % of light vehicles and 30 % of heavy
goods vehicles using the French motorway network are
from abroad. This means that demand for fuels on the
motorways is likely to be European whichever motorway
is concerned.

(186) For example, [...].

(187) It is true that, where motorways cross urban areas by
means of ring roads or urban motorways in places such
as Bordeaux, Lyon, Marseille, Nantes and Paris, these
areas can constitute a sufficiently major interruption of
the inter-urban motorway network for the competition
conditions not to be the same, for example, on the
motorways originating in the north and those arriving
form the south. This is clearly the case around Paris
given the intensity of the traffic and the wide extent of
the Paris region. It is not certain that the same is true
of the other cities identified, which cover a smaller
geographic area and where there is probably more
through traffic.

(188) In conclusion, there is a single market for motorway fuel
sales in France. It includes at least the motorways listed
at (i) to (iii) below. Even supposing that urban areas
actually form a natural frontier between motorways,
motorway interconnection would then mean that three
possible relevant markets could be defined, on each of
which there is a chain of substitutability resulting in one
distinct market. These groups are as follows.

(i) Normandy/north/east: A13, A16, A26, A28, A1,
A2, A4, A5, A19, A6, A39, A36, A35, A40, A41
and A43;

(ii) west/south: A8, A11, A81, A10, A85, A83, A72,
A75, A9, A7, A46, A48, A49, A50, A52, A61,
A62 and A20;

5.2. Competition analysis

(190) The comments which follow are based on a national
market definition. If the geographic markets corres-
ponded to the three groups of motorways defined
above, however, the same analysis would still be valid.
Concentration levels are relatively similar and the same
players are present on each of the three markets.

5.2.1. Current competition situation

(191) As explained in the Exxon/Mobil decision, the market
fuel clearly suffers form a
for motorway sales of
competition deficit. First, companies compete essentially
by means of prices. There is little room for manoeuvre
as regards the other factors of competition. Fuels are
homogeneous products with a low degree of technologi-
cal innovation. Volumes sold on the market do not vary
significantly. Then, it is easy for the market players to
anticipate and react to competitors’ actions. Supply is
highly concentrated. Price data are available almost
immediately. Likewise, the market players are similar as
regards costs, vertical integration and their presence in
France. Lastly, demand is very price inelastic. The
combination of these factors results in a market structure
which is conductive to supra-competitive prices.

(iii)

south-west: A63 and A64.

5.2.1.1.

Price is the only factor of competition available to
market players

5.1.4. Substantial part of the common market

(189) Each of these groups constitutes a substantial part of the
common market. First, they cover very extensive areas
of French territory. Second, each of them connects with
the motorway networks of neighbouring Member States.
They are therefore of prime importance for trade in
goods and the movement of people within the European
Union. 79 % of France’s trade in goods transported by
land is carried by road. Goods transported by road
account for 92 % by value of trade with other Member
States. Lastly, general statistics published by the Ministry

(192) There is little to differentiate the fuels offered by the
market players other than their price. Fuel is a fungible
product such that refiners systematically have recourse
to swap agreements for the purpose of supplying their
service stations.

(193) Oil companies have tried to differentiate their off-
motorway service stations but this apparently has only
limited influence on supply on motorways because of the
similar and demanding specifications of the motorway
companies.

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(194) There is little technical

innovation on the fuel retail
market. Technical progress relies more on fairly gradual
changes to processes and products than on radical
breakthroughs.

(195) Competition on the market for motorway sales of fuel
can thus in practice essentially be reflected only in prices.

5.2.1.2.

Little incentive for price competition

(196) As pointed out by TotalFina, demand for fuel on
motorways in France is relatively stagnant. The upshot
is that the market players are in little doubt as to how
the market will develop and therefore have less incentive
to compete with one another to capture a greater share
of future demand.

(197) The table below contains an estimate of the market
shares (by volume and by number of service stations on
the totality of the French motorways) of TotalFina, Elf
and their competitors for 1998.

TotalFina

Elf

Shell

Esso

BP/Mobil

Agip

Others

Number of stations

Market share by number of
stations

Market share by volume

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[25 % to 35 %]

[30 % to 40 %]

[15 % to 25 %]

[10 % to 20 %]

[10 % to 20 %]

[10 % to 20 %]

[10 % to 20 %]

[10 % to 20 %]

[10 % to 20 %]

[10 % to 20 %]

[< 5 %]

[< 5 %]

[< 5 %]

[< 5 %]

(198) Given the long-term nature of service station franchises,
these figures are unlikely to change significantly in
future, having varied little in percentage terms in recent
years.

(201) The high concentration of this market creates inter-
dependence among the five main players, each of which
can easily monitor the policy of its competitors. Such
monitoring takes place on two levels: between brands
and between neighbouring service stations. [...].

(199) These figures give a pre-operation concentration ratio
for the four biggest retailers of nearly 88 % with an HHI
index of 2 444. These two measures indicate a highly
concentrated market.

(200) There are three categories of market player. First,
TotalFina is market leader with a share of [30 % to
40 %]. [...]. The second category consists of Elf, Shell,
Esso and BP/Mobil, which have market shares of between
10 % and 20 %. Lastly, there are also some small players
such as Agip (seven stations), Avia (eight stations) and
Dyneff (two stations). [...].

(202) There is a very high degree of price transparency.
Pump prices are made public and are easily visible on
motorways. Price competition can therefore bring about
rapid adjustments by competitors.

(203) The incentive to engage in price competition is also
limited by a certain homogeneity of costs. Costs are
relatively homogeneous from one motorway service
station to the next. They are equivalent to the wholesale

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prices plus the costs generated by the specifications
required by the franchisor. The specifications are
invariably the same on a given motorway and differ little
from one motorway to another. The costs borne by each
competitor can therefore easily be estimated. It is thus
easier for the market players to anticipate the reaction
of their competitors to any action they take on the
market.

The outcome of these negotiations is not yet certain,
however. Moreover, TotalFina argues that even if the
agreements were to remain intact, keeping all the service
stations whose franchises expire in 2005 would entail
major investment. None the less, such investment would
offer a significant rate of return and would ensure that
TotalFina/Elf maintained its market position.

(204) All the major players on the market for motorway fuel
sales are vertically integrated. Apart from the stations
managed by the non-integrated operators Avia and
Dyneff, there is only one station owned by a super-
market. This identical degree of integration tends to
result in companies taking similar, foreseeable decisions
and action on the market and increases the incentive to
limit price competition.

(205) The extend of each network of motorway service stations
means that each brand has service stations located
directly before or directly after service stations owned
by each of its competitors. An aggressive policy focused
on a single section of motorway could lead to reprisals
on any other section.

(208) The only new service stations to be built are on newly
opened sections of motorway. In the last five years
(1995 to 1999) 33 calls for tender have been launched
and concluded by motorway operators, of which 11
either resulted in no contract being awarded or were
postponed. This represents an annual increase in the
number of motorway service stations of less than 1,5 %.
The increase in terms of volume is smaller, since the
new stations tend to be located on routes where traffic
is expected to be less dense than on existing routes. It
generally takes a year or two to finish building a
motorway service station, allowing for the time needed
to obtain the necessary permits and complete the
tendering procedure.

(209) Given the low rate at which concessions are renewed, it
is unlikely that new entrants, e.g. supermarkets, which
drive competition on the off-motorway market, will
enter the motorway market. With one exception (the
service station franchised to Leclerc, which charges
below-average prices), no supermarket chain is present
to date on French motorways.

(206) The lack of incentives to engage in price competition is
further weakened by the price inelasticity of demand. It
is generally recognised that fuel consumption is little
affected by price fluctuations. As was explained above,
there are many reasons for drivers to stop at motorway
service stations, and price ranks equally with the meeting
of other needs (rest, food, etc.).[...].

(210) In the last ten years, only three motorway service station
contracts have been awarded following a call for tenders
to companies which were not present on the French
motorway network prior to 1989. One was awarded to
Leclerc (a French hypermarket chain) and the other two,
to Dyneff (an independent operator).

5.2.1.3. Barriers to entry — lack of potential competition

5.2.1.4. Conclusion: an already uncompetitive market, led

by TotalFina

It

(207) Market entry depends on motorway operators offering
is highly unlikely that any new
new franchises.
service stations will be opened on existing motorways.
Moreover, most franchises expire after 2005. TotalFina
and Elf should thus see the franchises of [...] of their
service stations expire. It should be noted that agree-
ments concluded in 1992 between the motorway com-
panies and the oil companies allow the sub-franchises of
the latter to be extended automatically if they invest in
the motorway service station concerned. TotalFina took
advantage of this possibility for [...] of its service stations
between 1993 and 1999. TotalFina states that these
agreements are in the process of being renegotiated.

(211) The difference between prices charged at the Leclerc
service station and the market average is doubtless the
best illustration of the current low level of competition
on the market for motorway fuel sales. The Leclerc
stations sells 95 octane unleaded petrol for around [...]
centimes less [...] than service stations which, while not
directly adjacent, are situated on the same motorway.
This significant difference is price does not apparently
prevent the station from making a profit whilst being
subject to an identical cost structure as the other service
stations on the motorway. These price differences are
illustrated by the table below, which shows the prices
per litre of 95 octane unleaded petrol for five weeks in
1998/99 on the section of the A31 motorway between
Beaune and Toul.

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L 143/31

km

Brand

Name of the service
station

26 Shell

Gevrey

7.9 to

22.3 to
13.9.1998 31.1.1999 28.3.1999 16.5.1999 27.6.1999

21.6 to Aver-
age

25.1 to

10.5 to

Chambertin Ost

[...]

[...]

[...]

[...]

[...]

[...]

57 Leclerc

103 Esso

Dijon

Brognon

Langres

Noidant

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

137 TotalFina

Val de Meuse

[...]

[...]

[...]

[...]

[...]

[...]

182 BP

Lorraine les Rappes

[...]

[...]

[...]

[...]

[...]

[...]

229 TotalFina

Chaudeney

[...]

[...]

[...]

[...]

[...]

[...]

272 Elf

Elf Loisy

[...]

[...]

[...]

[...]

[...]

[...]

307 TotalFina

La Maxe

[...]

[...]

[...]

[...]

[...]

[...]

net Oil company

average

net Supermarket

average

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

Sources: TotalFina for the station figures and Opal for the national averages for the oil companies and the supermarkets.

(212) These price differences suggest that motorway prices
are probably higher than they would be in a situation
of pure competition. TotalFina argues that they are
due solely to the fact that motorway service station
costs are about [...] centimes per litre higher than
those incurred by off-motorway service stations. This
estimate was produced by UFIP (French union of oil
companies). It does not fully explain the difference in
prices between motorway and off-motorway services
as
is, however,
contradicted by a cost differential between motorway
and off-motorway service stations supplied by TotalFina,
which suggests cost and profit advantages in favour of
motorway service stations:

illustrated in the above table.

It

Motorway/off-motorway differential in centimes
per litre

Gross profit

Variable costs

Net profit

Fixed costs

Depreciation reserve

Diversified income

[...]

[...]

[...]

[...]

[...]

[...]

NB: according to TotalFina, the positive values indicate a unit cost or
profit which is higher on the motorway network than off it.

L 143/32

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29.5.2001

(213) In its reply to the Statement of Objections, TotalFina
contests the validity of these two estimates on the
they take no account of certain cost
ground that
elements and suggests that the extra cost of operating
motorway service stations can be estimated at [...]
centimes per litre (including tax). However, this estimate
still does not explain the difference in price of some [...]
centimes between the Leclerc service station, being
profitable, and the other stations operated by the oil
companies on the A31 motorway.

(214) Likewise, in an internal document, TotalFina puts the
return on investment from building or upgrading a
motorway service station at [...] and [...] respectively.
This should be compared with the rates of [...] and [...]
for Total stations on major trunk roads or in urban or
suburban areas. [...]. Even if this was verifiably true (and

TotalFina gives only three examples of service stations
constructed off the motorway network between 1997
and 1999), this in no way undermines the validity of the
assertion made above that motorway service stations are
more profitable than off-motorway service stations.

(215) As explained above, TotalFina sees itself as leading the
market for fuel sales. This position is clear-cut on the
market for motorway fuel sales, where TotalFina is
almost [...] as big as its immediate competitor, Elf. The
following table summarises calls for tender put out for
the construction of new motorway service stations in
the last five years and is also illustrative of TotalFina’s
position. Of 22 completed projects, Total chose not to
participate in the procedure on [...] occasions, given the
presence of one of its stations in the vicinity. It was
awarded the contract in [...] out of the [...] procedures in
which it did participate.

Period 1995 to 1999

Successful

Insufficiently
profitable

Station in the
vicinity

Participation

No contract awarded/
procedure postponed

Total

Fina

Elf

Shell

Esso

Avia

BP/Mobil

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

—

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

5.2.2. Post-merger situation — effect of the merger

on competition

(216) In conclusion, the current competitive situation on the
market for motorway fuel sales is close to being one of
dominance exercised either solely by TotalFina, or else
jointly, with TotalFina in the role of leader.

(217) The new entity would have a significant presence on all
sections of motorway throughout France. The HHI
concentration index would rise from 2 444 to 4 004,
which is an extremely high level of concentration.
Overall, its market share would be as follows:

29.5.2001

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L 143/33

Market share by number
of stations

Market share by volume

TotalFina/Elf

[50 % to 60 %]

[50 % to 60 %]

Shell

Esso

[10 % to 20 %]

[10 % to 20 %]

[10 % to 20 %]

[10 % to 20 %]

BP/Mobil

[10 % to 20 %]

[10 % to 20 %]

Agip

Others

[< 5 %]

[< 5 %]

[< 5 %]

[< 5 %]

[...]

[...]

[...]

[...]

[...]

[...]

(218) In addition to its dominance on the wholesale fuel
markets and the oil logistics chain, TotalFina/Elf would
benefit after the merger from unequalled coverage in
terms of number of service stations and geographic
reach. This would allow it
to monitor closely the
behaviour of each of its competitors and to punish them
if they were to choose to follow an aggressive price
policy on a given section of motorway. Each of the
main players (BP, Esso and Shell) would have a large

proportion of its motorway service stations immediately
adjacent to a station belonging to the TotalFina/Elf
group. This is demonstrated in the following table,
which shows the number of service stations, by brand,
on the same section of motorway which are immediately
adjacent to a TotalFina/Elf service station, between two
TotalFina/Elf service stations or immediately adjacent to
two TotalFina stations.

BP

Elf

Esso

Shell

TotalFina

TotalFina/
Elf

TotalFina/
Elf/-/
TotaFina/
Elf

-/Total-
Fina/Elf/
TotalFina/
Elf

x

14

7

7

[...]

[...]

[...]

[...]

[...]

[...]

8

19

x

8

7

20

7

x

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

BP

Elf

Esso

Shell

TotalFina

(219) The fact that there are sometimes two TotalFina/Elf
stations adjacent to one another and that some service
stations are caught between two TotalFine/Elf service
stations would allow the latter to target any reprisals
without this having an effect on other competitors. The
example of the prices charged by the Leclerc service
station illustrates that one station has a direct impact on
the prices charged by the two stations immediately next
to it and particularly on the station which follows it. So
if a competitor decided to step up price competition, it
could not be sure that others would follow and would
run the risk of seeing TotalFina/Elf carry out selective
reprisals against a substantial proportion of its service
stations. Given the size of TotalFina/Elf compared with
that of each of its competitors [...], the costs of a price

war would be unevenly distributed in relation to the
cash flows of the motorway service stations.

(220) Following the merger, TotalFina/Elf would have strong
incentives to raise its prices and/or reduce the quality of
its services. First, as explained above, the structure of the
market for fuel sales at motorway service stations tends
to favour rigidity as regards downward price movements
and fluidity as
regards upward price movements.
TotalFina/Elf would then have the means to punish any
competitor which did not follow, or which opposed, its
policy.

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(221) Overall, the notified merger would result in further
extensive degradation of the competitive structure of the
for fuel sales on French motorways, when
market
competition is already limited. The operation will lead
to TotalFina/Elf gaining a dominant position on the
market.

While it is true that airlines publish international calls
for tenders, they do not necessarily select a single
supplier to supply all the airports to and from which
they fly. On the contrary, they select the company which
submits the best bid airport by airport, according to the
relative advantages of the suppliers in a given place.

6.

SALE OF AVIATION FUELS

6.1. Reference market

(222) The fuel used for aero (or jet) engines is kerosene.
Although similar to domestic kerosene (used as heating
fuel in the United Kingdom in particular), it is subject to
strict performance requirements. In previous decisions
(BP/Mobil, Shell/Gulf Oil, Exxon/Mobil),
the Com-
mission concluded that aviation fuels formed a separate
product market form other fuels (such as petrol, diesel
or marine fuel). TotalFina agrees with this view.

(223) The notifying party argues that the market for aviation
fuels is European, given that the fuels are sold by calls
for tenders for international supply contracts awarded
by the various airports throughout
In
addition, the price is set on the basis of Platt’s quotations,
such that prices for aviation fuels on cargo markets
across the world are very similar.

the world.

(224) The Commission does not conclude on this basis that
there is a single market of European dimension. Aviation
fuel production should be distinguished from the supply
and delivery of aviation fuels to given sites, the logistical
infrastructure being then capable of limiting the geo-
graphic scope of competition.

this is due to the nature of

(225) Even if the ex-refinery price and the cargo market price
may be similar,
the
product and to a general alignment of prices for refined
petroleum products. Given the uniform pricing of the
raw materials (crude oil) and the more or less uniform
structure at European level of refining and transport
costs, the price of aviation fuels can also be expected, as
is the case with other refined petroleum products, to be
uniform at European level. However, when it comes to
the supply of aviation fuels to certain airports, the
European nature of the market becomes less obvious.

(226) Moreover, the price charged for aircraft fuelling can vary
from one contract to another. As pointed out by the
notifying party, the supplier must add to the Platt’s
quotation the price of placing the fuel on board the
aircraft, i.e. the logistics of transporting the fuel to its
destination (conveying it to the airport, storing it and
fuelling the aircraft). Price divergence can be observed
from one airport to another, explained by the cost of
transporting fuel from the refinery or import depot.

(227) The competitive environment can also differ from one
airport or one region to another. These differences are
principally explained by the distribution infrastructure
for aviation fuels destined for different airports, which is
generally specific to each airport. This means that
suppliers not only have to produce aviation fuels in
they
order to win contracts with the airlines, but
must also have access to the distribution and fuelling
infrastructures specific to each airport in order to market
their product effectively up to the final link in the supply
chain, i.e. aircraft fuelling.

(228) Markets can be restricted to a specific airport. This
means, on the demand side, that if the price of aviation
fuel increases in one airport, an airline is unable to turn
to another airport in order to obtain the same fuel at a
lower price, given the constraints connected with the
availability of time slots. As regards supply, the ability
of an oil company to stop supplying one airport in order
to supply another depends on its access to the logistical
infrastructure, which means that substitutability is also
limited on the supply side.

(229) In this case, the two markets concerned are the airports
of Toulouse-Blagnac and Lyon-Satolas. TotalFina argues
that these two airports do not constitute substantial
parts of the common market.

(230) These two airports rank respectively as the third and
fourth French airport measured by the number of
passengers transported. They serve heavily industrialised
areas, Toulouse being the centre of Europe’s aeronautical
industry (e.g. Airbus, Ariane) (18) and Lyon, the second

(18) Data on traffic at the two airports (1998):

Toulouse: passengers: 4 800 000; freight: 46 000 tonnes; move-
ments: 97 000; destinations: 25 % of traffic outside France.
Lyon: passengers: 5 221 221; freight: 40 000 tonnes; movements:
108 355; destinations: 38 % of traffic outside France.

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L 143/35

largest French city and a major industrial and financial
centre. Both airports ensure an extended geographical
cover of isolated regions, and have as such an extended
hinterland. In fact, the hinterland of the Toulouse airport
covers the whole of the Midi-Pyrénées region. The only
airport of a comparable size is the Marseilles airport,
which however,
is situated at multiple hours road
distance from Toulouse. Equally so for Lyon which
covers an extended geographical zone in the centre and
south-east of France. The only airport of comparable
size is that of Geneva, Switzerland. Moreover, Lyon-
Satolas and Toulouse-Blagnac are both on the list of
airports for priority liberalisation under the directive on
groundhandling services (19). Under this directive, the
Commission publishes four lists of airports covered by
the liberalisation requirements laid down in it. The
airports are listed in order of size. Both Lyon-Satolas and
Toulouse-Blagnac are listed in the first category of
airports (airports whose annual traffic is not less than
3 million passenger movements or 75 000 tonnes of
freight). By way of comparison,
this category also
includes the following airports: Frankfurt am Main,
Paris, London-Heathrow, London-Gatwick, Amsterdam,
Brussels, Rome, Milan, etc. For all these reasons, the
Commission considers that the two airports constitute
substantial parts of the common market.

6.2. Competition analysis

(231) The notifying party recognises the importance of access
to the supply infrastructure of an airport. At all major
airports, storage, hydrant fuelling systems and trucks
used for fuelling are managed by one or more pools,
whose members are fuel suppliers which have invested
in these logistical resources and pooled them in order to
cut logistical costs. Although these resources are used
primarily by the pool members, the notifying party
argues that this does not restrict supply at a given airport
either because the pools include a large number of
operators or because there are at
two pools
involving each of the operators. In addition, most of the
time, clauses lay down conditions for admitting new
members, provided they meet objective criteria as
regards technical characteristics and solvency.

least

(232) At Toulouse airport, the storage of aviation fuel and
aircraft fuelling are managed by an economic interest
grouping called GAT (Groupement pour l’Avitaillement
de Toulouse), in which TotalFina and Elf each have 50 %
membership. There is no other competing grouping or
pool. In 1998, TotalFina and Elf supplied all the aviation
fuel used at this airport [...]. The proposed merger would
create a monopoly and increase barriers to the entry of
potential competitors.

(233) At Lyon airport, the storage of aviation fuel and aircraft
fuelling are managed by a economic interest grouping
called GALYS (Groupement pour l’Avitaillement de
Lyon-Satolas), in which TotalFina and Elf each have 50 %
membership. There is no other competing grouping or
pool. In 1998, TotalFina and Elf supplied all the aviation
fuel used at this airport [...]. The proposed merger would
create a monopoly and increase barriers to the entry of
potential competitors.

(234) The notifying party stresses that the merger would
neither create nor strengthen a dominant position at
these two airports in view of the amendments made to
the formation agreements of the two groupings, GAT
and GALYS, laying down conditions for admitting new
members (see preceding recitals). Third-party access
would thus be guaranteed to any competitor requesting
it which met the objective criteria as regards technical
characteristics and solvency. Although no competitor
has presented itself at Lyon airport, the notifying party
reports a request made by Mobil
in July 1999 for
Toulouse airport.

(235) The amended clauses of the formation agreements of
the pools do not change the fact that TotalFina/Elf would
acquire a dominant position at the two airports as a
result of the merger. It is the creation in itself of such a
position that
the Merger Regulation is intended to
prevent. The application of this Regulation is not affected
by the argument developed by the notifying party that
the clauses concerned may limit the capacity of the new
entity to abuse its dominant position.

6.3. Conclusion

(19) Council Directive 96/67/EC of 15 October 1996 on access to
the groundhandling market at Community airports, OJ L 272,
25.10.1996, p. 32.

(236) The Commission therefore considers that the merger
would lead to the creation of a monopolistic dominant
position on the market for the supply of aviation fuels
to the airports of Toulouse-Blagnac and Lyon-Satolas.

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7.

SALE OF LIQUEFIED PETROLEUM GAS (LPG)

7.1. Relevant market

7.1.1. Products market

(237) Liquefied petroleum gases (LPGs) contain butane or
propane, which are the product of either oil refining or
natural gas. LPG used as an energy-producing fuel can
be distinguished from LPG used as a car fuel (LPG-c). As
LPG-c comes under the motor fuel market, only LPG
used as a fuel for other purposes will be analysed in this
section.

(238) LPG production represents between 2 % and 4 % of a
refinery’s overall production. In France, of the 88 million
tonnes of refined products of French refineries in 1998,
2,8 million tonnes were LPG (3,1 % of total production).

— Description of the product

(239) LPG includes two products, butane and propane. In spite
of a number of technical differences (difference pressures
and boiling points which determine how they are
stored and conditioned), the two products are mutually
interchangeable for most uses (with the exception of
LPG car fuel, which is always a mixture of propane and
butane). For example, butane is used for mainly domestic
purposes in conditioned form (in bottles) for auxiliary
heating, production of hot water and cooking. It is also
used in bulk, mainly for industrial purposes, its domestic
usage being limited by the fact that it ceases to be a gas
at temperatures of below 0 °C. Propane is used for
identical domestic purposes and for industrial energy
production, its technical characteristics making it more
suitable for distribution in bulk (in tanks), whatever the
climatic conditions.

(240) Because of its hazardous nature, the marketing, transport
and storage of LPG is regulated at both national and
European level.

— Modes of conditioning

(241) Information suggests that there may be three distinct
LPG markets. A distinction is made between (i) con-
ditioned LPG, (ii) LPG sold in bulk for mainly domestic
purposes, and (iii) bulk LPG for industrial use. This
approach is also adopted by the LPG suppliers them-
selves. The three possible markets are differentiated
by their modes of distribution, uses and quantities
consumed.

(242) Conditioned LPG is sold in bottles weighing between
5,5 and 35 kilograms. It is mainly used for domestic

purposes: water, heating, cooking and DIY. It can also
be used for industrial purposes: for example, for the
food sector, heat treatment, sealing and public works.
Conditioned LPG is sold in service stations, supermarkets
and superstores and through traditional outlets (hard-
ware shops, grocery shops, bars). The distribution logis-
tics for bottled LPG include bottling centres (45 centres
in France). In France, conditioned LPG represents 25 %
(0,81 million tonnes) of LPG sales for all uses. Bottle
sales are declining annually by 2 % to 3 % on average.
This tendency is the result of two opposite movements:
a decline in sales of conditioned butane (domestic), a
constant level of sales of conditioned propane (industrial)
and an increase in sales of small bottles (6 kg), which are
a new products intended for the leisure energy, cooking
an auxiliary heating market.

(243) LPG sold in bulk for mainly domestic use (small bulk
segment) is delivered in small tanks of 0,5 to 1,7 tonnes.
These tanks are made available to customers whose
annual consumption does not exceed 12 tonnes. The
tanks, whether aerial or buried, are installed for individ-
ual consumers outside and at a certain distance form
their house. This LPG is mainly usd for heating, cooking
and hot water. Small bulk LPG is distributed essentially
by the operators themselves. Sales of small bulk LPG in
France total 1,22 million tonnes and represent 40 % of
sales of LPGs for all uses. Sales of small bulk LPG are
increasing (+ 0,38 % million tonnes since 1990).

(244) Industrial bulk LPG (medium and large bulk segment) is
sold in medium-sized and large tanks from 1,75 to
50 tonnes installed with industrial customers. Annual
consumption of
industrial bulk LPG is more than
12 tonnes per customer. Industrial bulk LPG is used for
all or part of the following uses: space heating, hotels,
restaurants, industrial processing, hot-houses, agri-food-
stuffs (drying cereals, tobacco, etc.) the supply of steam,
etc. Medium and large bulk LPG is distributed by the
operators themselves, who have their own sales force
and their own customer service. Sales of medium and
large bulk LPG in France total 1 million tonnes and
represent 30 % of sales of LPG for all uses. Sales of
medium and large bulk LPG are increasing, though not
as much as in the small bulk segment (+ 0,10 million
tonnes since 1990).

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L 143/37

(245) However, it is not necessary to determine whether a
single LPG market or several separate ones, depending
on the method of conditioning or on final use, exist. The
analysis of the effects on competition of the notified
transaction is not affected by this distinction.

— LPG, a separate product market

(246) TotalFina argues that LPG does not constitute a separate
product market, since there are a number of substitute
products for LPG. For energy for heating and cooking
the notifying party mentions solid mineral fuels (coal,
lignite, wood), domestic heating oil, natural gas, elec-
tricity and renewable energies (solar energy). In the
industrial sector it mentions natural gas, electricity, solid
mineral fuels (coal, lignite) and heavy fuel oil.

(247) However, none of these energy sources appears to
belong to the same product market as LPG. First of all, it
should be noted that the purposes for which conditioned
LPG is used do not really lend themselves to a switch to
other sources of energy such as domestic heating oil.
Buyers of bottled LPG intend it for a specific purpose
(auxiliary heating, cooking, DIY, welding, etc.) to which
domestic heating oil does not lend itself. This non-
substitutability is due to the ease of conditioning of LPG
rather than relative prices or the relative calorific value
of LPG and alternative energies.

(248) Switching over from one energy source to another
requires major changes to the equipment (boiler, chang-
ing the burner, buying a new tank or changing the pipes
and storage) and hence considerable expense. If the price
of LPG rises, the costs of the switch to another energy
source will, in the short term, offset the higher price for
LPG.

de France) customers, as compared with [...] bottled LPG
customers. Because the natural gas network will not
cover the whole of France, there will always be a separate
demand for LPG in France (20).

(250) The responses of the different users of LPG show natural
gas as the alternative energy source that is closest to
LPG, provided that a connection to the natural gas
network is possible or feasible. For example, in agri-
culture (e.g. drying of cereals), LPG is used, for the same
purpose as natural gas, because it is the only form of
energy which allows the combustion air to be used
directly in the dryer without passing through an air/air
heat exchanger. In the glassware, smelting and ceramics
industry, LPG is chosen (as a source of energy for drying)
rather than electricity, which costs five times as much to
use, heavy fuel oil because it is polluting, and natural gas
if the latter is not distributed by GdF to the production
sites. A manufacturer of cellulosic fibre packaging (fruit
and bottle packaging) switched from heavy fuel oil to
LPG for reasons of cleanliness and also because of the
poor energy efficiency of heavy fuel oil. In the collective
housing sector, LPG is used in rural areas not supplied
with natural gas. According to the construction com-
panies asked, it is chosen because it is more economical
than electricity, and ‘cleaner’ and easier to deliver than
domestic heating oil.

(251) The following example illustrates the lack of direct
competition between alternative energy sources [...].

(249) Only a switch to natural gas could be done fairly easily
with reasonable adjustments and costs. However, the
natural gas network must first geographically cover
demand. If we look at bottled LPG for domestic use
(cooking), the whole of France has [...] natural gas (Gaz

(252) An examination of LPG prices demonstrates the diver-
gent trends between LPG and other energy sources.
According to figures supplied by TotalFina, the price
movements were as follows between December 1982
and December 1998.

December 1982

December 1992

December 1998

(Centime/kWh)

LPG

Natural gas

Electricity

33,8

24,2

54,5

32,8

24,1

74,2

39,0

24,4

71,5

Source: ATEE (Association technique pour les économies d’énergie), February 1999 — Form CO.

(20) The distribution network for natural gas in France covers
6 705 municipalities out of approximately 36 000. Gaz de France
anticipates the connection of 400 additional municipalities per
year for the next three years.

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(253) It is clear from this that the price gap between LPG and
natural gas has increased over the past 17 years. In spite
of this growing gap, according to TotalFina the tank
customer base has continued to increase and the bottle

customer base has declined only slightly. The gap is
similar in LPG domestic and industrial sales, as shown
by the following table, provided by TotalFina.

Private home
(1999)

24

19

39

58

(Centimes per kWh)

Large industry
(1999)

7

10

24

26

Natural gas

Domestic heating fuel

LPG

Electricity

Source: ATEE, February 1999 — Form CO.

(254) The following table illustrates,

for the period from
1988 to 1998, the shifts between energy sources in

private homes whenever central heating systems are
replaced [...].

Energy

Before replacement

After replacement

Change

Oil

[...]

[...]

[...]

Gas

[...]

[...]

[...]

Electricity

Coal

[...]

[...]

[...]

[...]

[...]

[...]

LPG

[...]

[...]

[...]

Other

Total

[...]

[...]

[...]

[...]

[...]

[...]

Source: TotalFina — Centre d’étude et de recherche économique sur l’énergie.

(255) It can be seen that there is a positive replacement rate in
favour of LPG, and also in favour of the natural gas
network. Conversely,
it can be seen that there is a
replacement rate to the detriment of energy such as
domestic heating oil, electricity or coal. ‘Other’ energy
sources include new forms such as solar energy.

(256) A significant factor in the degree of possible competition
between alternative energy sources is the correlation
between the price variations of
the various energy
sources.
If two alternative energy sources are inter-
changeable and therefore belong to the same market, a
price increase in one should lead to a price reaction in
the other. In other words, if the two sources of energy
belong to the same product market, then their relative
prices should follow the same pattern over a given
period. In this case, there would be a correlation between
the price variations of the two alternative energy sources.

(257) The Commission’s

correlation analysis, however,
showed that LPG does not belong to the same market as
fuel oil or electricity (21). This analysis is based on the
prices of LPG,
fuel oil and electricity (period from
January 1995 to July 1999) billed to five categories of
customer: domestic customers, tertiary sector (hotels,
public authorities, etc.), small, medium and large indus-
try (source: Les prix de l’énergie, Association Technique
Energie-Environnement). These categories represent all
forms of conditioning (domestic bulk, industrial bulk,
medium and large bulk) and hence the different quan-
tities of LPG supplied. The following table shows the
degrees of correlation (R2) found:

(21) This analysis did not include natural gas, since it could reasonably
be a substitute for LPG (as it is cheaper), provided that the
customer can be connected to the gas network, as mentioned
above.

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L 143/39

Correlation between LPG, fuel oil and electricity

Domestic
LPG

Tertiary sector
LPG

Small industry
LPG

Medium industry
LPG

Large industry
LPG

Fuel oil

Electricity

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

(258) The degrees of correlation are very slight (more so for
electricity than for fuel oil). Basically, this means that
pricing policy for LPG is not constrained by that of
alternative energy sources. This is a strong indication of
the existence of separate energy markets.

(259) An analysis of the gross margins achieved in the LPG
market shows an upward trend which it is difficult to
explain in the presence of current, effective competition
form other energy sources.

Variation in gross margins for LPG (1996 to 1998)

Conditioned

Small bulk

Medium and large bulk

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

Notifying party

Large competitor 1

Large competitor 2

Small competitor

Medium industry

Source: answers to the Commission’s questionnaires.

(260) The gross margins have grown over the last three years.
This growth, which applies to operators of all sizes,
shows that LPG producers have not had to adjust their
customer sales prices in order to compete with fuel oil
or another energy source.

nature of the data, since, unlike LPG and domestic
heating oil, the price of electricity and natural gas only
vary annually. It has also provided the elasticity estimates
commissioned by it from [...].

(261) In its reply to the Statement of Objections, TotalFina
redefines the relevant markets according to the uses
made of LPG (cooking, domestic heating,
in
the petrochemical industry, energy source for certain
industries) and is keen to show that, for each of these
uses, LPG faces strong competition from other energy
sources. It also claims that the correlation calculations
made by the Commission are distorted by the monthly

input

(262) As far as cooking is concerned, LPG could be replaced
by natural gas (in the areas served by the network) and
electricity. In the case of substitution using natural gas,
this would be in situations where the gas network was
on the doorstep of the LPG consumer. Replacement of
LPG by natural gas requires minor adjustments to
household equipment. According to TotalFina, an
increase in the relative price of LPG would mean
accounts being opened with GdF (which manages the
French gas network) in sufficiently large numbers to
make the price increase unprofitable.

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(263) However, this argument would be valid only in the
area of France covered by the gas network. GdF has
consequently lowered its tariffs in the course of 1999,
whilst prices of LPG have showed the tendency to
increase in the same period. It is unlikely that a price
differential of around [...] between conditioned LPG and
natural gas would lead a consumer to conclude a natural
gas supply agreement with GdF.

(264) According to TotalFina,

substitution by electricity
two factors. Firstly,
depends on a combination of
households are increasingly equipped with appliances
that can work on LPG or electricity (such as a cooker
with two electric rings and two LPG rings). Consumers
can therefore choose between LPG and electricity
depending on their relative prices. Secondly, appliances
which work on LPG are being replaced by electric
appliances.

(265) Neither of these arguments is convincing. According to
a study [...], in a non-gas area [...] of households are
equipped for cooking with LPG or LPG plus electricity.
Each of the energies used for cooking has advantages
and inconveniences. TotalFina also explains that for
cooking, gases generally have ease and safety incon-
veniences over electricity. In any case, for cooking, LPG
is considerable less expensive, and as such, it remains
the solution of choice for a vast number of households,
notably of those with moderate revenues. TotalFina also
explains that more than a quarter of households use
mixed appliances which run on LPG and electricity,
and concludes from this that these households would
consume more electricity than LPG if the relative prices
varied. However, it can be excluded that the majority
of households is constantly informed of the relative
differences in price (per calorific unit) between LPG and
electricity, and that they would perform arbitration
consequently. The same goes
the choice of
appliances. According to the documents submitted by
TotalFina, these choices are made primarily according to
the amount of the investment and ease of use (speed,
cooking quality, etc.). Finally, it has to be underlined that
[...] has estimated the crossed elasticity between LPG
used for cooking and electricity would be around [...].
This means that a price increase of [...] would lead to a
lesser decrease of sales and would as such remain
profitable.

for

(266) Consequently, as far as cooking is concerned, con-
ditioned LPG does not form part of the same relevant
market as natural gas or electricity.

(268) However, it emerges from the studies submitted that (i)
the choice of a source of energy for heating depends on
the central heating that is installed; (ii) the moment when
the decision is made to install or change a central heating
system is dependent not so much on the relative prices
of the different sources of energy but rather on the
breakdown of the previous system and the amount of
household savings; and (iii) when a dwelling is to be
equipped with a heating system, the consumers make a
choice between the different sources of energy and this
choice depends partly on the relative prices of the
different energy sources. According to TotalFina, if LPG
prices were increased by [...], [...] of dwellings which
would have chosen that year to be equipped with LPG
would choose a different
installation and therefore
another energy source. This estimate contains non-
it were
negligible statistical distortions, but even if
accepted, the number of heating systems which would
have to be replaced or installed and which could run on
LPG is a small proportion ([...]) of the total number of
houses heated with LPG. This therefore means that a
uniform increase of [...] in LPG prices would mean a loss
of no more than [...] of customers and would therefore
be profitable. According to TotalFina, this would be
equivalent to a loss of about [...] of customers over a
period of three years.

(269) Furthermore, according to TotalFina, [...] of homes
heated with LPG also have another source of energy
(such as wood or electric radiators). TotalFina has given
an estimate of the price elasticity of demand for LPG at
[...]. Thus,
the price of LPG were increased by
[...], other things being equal, demand for LPG would
decrease by [...].

if

(270) In total, if the prices of LPG increased by [...], this would
lead to a loss of sales over three years of around [...] at
most. Such a loss of sales would be more than offset by
the increase in profits. The increase in profits is more
than proportional to the increase in prices (as an initial
estimate it may be considered that an increase in prices
would increase profits overall). Given the hypotheses
provided by TotalFina, there would have to be a unit
margin of more than [...] for a price increase of [...] to
be unprofitable. So, the ratio between the operating
result per tonne and the sales price per tonne was, for
TotalFina, around [...] in 1998.

(267) As far as LPG as a source of domestic heating is
concerned, TotalFina has provided numerous studies
which claim to show a strong substitutability with
domestic heating oil, electricity and wood. This substitut-
ability comes into play when heating systems are
changed and in the choice of the energy source for
dwellings with several sources of heating.

(271) As regards LPG in tanks used in the petrochemical
industry and in industry in general, TotalFina’s studies
show that
the relative variations in price between
LPG and other sources of energy do not correlate.
Furthermore, a [...] report on LPG use in the petrochem-
ical industry shows that an increase of [...] in the price
of LPG compared with that of naphtha would lead to a
in the proportion of LPG consumed
drop of

[...]

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Official Journal of the European Communities

L 143/41

compared with naphtha consumed. The slightness of
this impact is due to the technical constraints under
which steam crackers operate. The relative proportion
of LPG, naphtha and fuel oil determines the steam
crackers’ output. The possible variations of LPG used as
compared with other energy sources can therefore be
explained by production adjustment decisions by steam
crackers, regardless of their relative prices, or by trade-
offs on the supply side between a number of uses of
LPG.

in one country are homogeneous and subject to standard
rules. The market is dominated by sales networks set up
by the oil companies and supermarkets or superstores.
The operators of these networks have national pricing
policies. In this case, the relevant geographic market is
France. As will be explained in the following paragraphs,
certain operators have a more extensive logistical struc-
ture than others who base their operations on swap
contracts with the former in order to cover the whole
territory.

(272) On the basis of the foregoing, it may be concluded that
LPG forms a separate market from other energy sources,
with the possible exception of natural gas, the prior
connection of which to the customer’s premises is a
precondition for its use as a substitute.

7.1.2. Relevant geographic market

(273) The geographic market for LPG sales is national. LPG is
a product which is generally transported over short
distances. However, the trade areas for depots or bottling
centres soverlap and it would appear to be difficult to
isolate one area from the others. As regards the market
for LPG for domestic use, sold in bottles, the products

7.2. Operation of the market

7.2.1. Structure of supply: players in the market

(274) There are currently seven players operating on the LPG
market. Apart from TotalFina and Elf they are Butagaz,
Primagaz, Repsol, Air Liquide and Vitogaz. As for Air
Liquide, Vitogaz has financial links with Elf and TotalFi-
na. Its capital is shared between TotalFina (34 %) and
Rubis (66 %), Rubis is a limited partnership whose
principal shareholders are [...] and [...]. The parties to the
concentration do not hold any participation in Butagaz
nor Primagaz. The market shares of the various players
are as follows:

LPG market shares — France

Overall LPG

1998

[15 % to 25 %]

[15 % to 25 %]

[< 5 %]

Elf Antargaz

Totalgaz

Air Liquide

TotalFina — Elf — Air Liquide

[40 % to 50 %]

Butagaz

Primagaz

Vitogaz

Esso

Repsol

Mobil

[20 % to 30 %]

[10 % to 20 %]

[< 5 %]

[< 5 %]

[< 5 %]

[< 5 %]

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Official Journal of the European Communities

29.5.2001

Conditioned LPG

1998

Elf Antargaz

Totalgaz

TotalFina — Elf

Butagaz

Primagaz

[15 % to 25 %]

[15 % to 25 %]

[35 % to 45 %]

[30 % to 40 %]

[10 % to 20 %]

Others (Vitogaz, Repsol, Air Liquide)

[< 5 %]

LPG small bulk sales

1998

Elf Antargaz

Totalgaz

Air Liquide

TotalFina — Elf — Air Liquide

Butagaz

Primagaz

Vitogaz

Others

Elf Antargaz

Totalgaz

Air Liquide

TotalFina — Elf — Air Liquide

Butagaz

Primagaz

Vitogaz

Others

Source: TotalFina — Form CO.

[15 % to 25 %]

[15 % to 25 %]

[< 5 %]

[40 % to 50 %]

[25 % to 35 %]

[10 % to 20 %]

[< 5 %]

[< 5 %]

[20 % to 30 %]

[15 % to 25 %]

[5 % to 15 %]

[55 % to 65 %]

[10 % to 20 %]

[10 % to 20 %]

[< 5 %]

[< 5 %]

LPG medium and large bulk sales

1998

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(275) Likewise, TotalFina and Elf have a strong presence in
storage, owning import depots throughout France. These
depots are necessary for all the players on the market
because France is structurally a propane importer. To
date, the market players have been using swap agree-
ments between import depots, storage depots and
bottling centres to cover the whole of France.

(276) If the proportion of quantities of imports stored by each
player is calculated, values similar to the market shares
are arrived at. The following table indicates the pro-
portion of capital held by each of the businesses present
on the LPG market in terms of import depots.

Import depots

Depots

Capacity (m3)

TotalFina

Elf

Butagaz

Primagaz

Vitogaz

Norgal (Seine valley)

60 000

26,4 %

52,7 %

20,9 %

Petit Couronne (Seine val-
ley)

53 000

100 %

Brest (west)

9 500

100 %

Donges (Nantes)

85 000

100 %

Cobogal (Gironde)

11 500

45 %

15 %

40 %

Pauillac (Gironde)

16 700

100 %

Port-la-Nouvelle (1) (south)

8 100

100 %

Port-la-Nouvelle (2) (south)

1 800

100 %

Geogaz (south)

300 000

26,2 %

16,7 %

25,2 %

Lavéra (south)

90 000

100 %

Source: Form CO.

(277) TotalFina and Elf have geographically complementary
logistical positions. After
the merger, TotalFina/Elf
would acquire sole control of the Norgal and Cobogal
depots, and, thanks to the addition of the depots in the
south of France and on the Atlantic seaboard, the
merged business would have a geographical logistical
coverage which makes it independent from its competi-
tors (see below).

(278) Lastly, TotalFina and Elf have strong positions in terms
of hub depots and bottling centres. The infrastructures
for storing LPG in local depots and in bottling centres
are important and necessary tools in that they make LPG
— an energy source favoured by the residential, tertiary

and agricultural sectors and in small industry — available
above all in rural areas and small towns, and in areas
where the economy is based largely on small businesses.

(279) The need to pass through storage centres means that
there are considerable obstacles to entry and expansion
into the market. Since LPG is perceived as hazardous,
there are binding rules at European and national level,
which makes the construction of new storage sites very
unlikely. It would therefore be very expensive for an
economic agent to enter the LPG market or for a current
player to increase its market share. The last few years
have thus seen a trend towards concentration in the LPG
market in France.

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7.2.2. Structure of demand

(280) The LPG customer base breaks down into two categories.
The ‘bottle customer base’ is essentially made up of
individuals. The ‘bulk customer base’ is itself subdivided
([...]) customers.
([...]) and industrial
into individual
Traditional bottle sale (22) are declining slightly, by 2 % a
year. By contrast, and disregarding the increase in sales
of LPG motor fuel that has been announced, tank sales
are increasing from 2 % to 3 % a year, so that further
growth can be expected.

7.3. Competition analysis

7.3.1. Combined position of TotalFina and Elf in

LPG sales

(281) TotalFina’s acquisition of Elf would lead to a dominant
position on the LPG market(s) in France. With respective
market shares of [15 % to 25 % and 15 % to 25 %] in
1998, TotalFina and Elf would, once merged, reach
[40 % to 50 %] nationally. To this must be added the
[0 % to 5 %] held by Air Liquide. TotalFina/Elf would
thus have control of approximately [40 % to 50 %] of
LPG sales in France. Looking at
the separate LPG
markets, TotalFina/Elf would have [35 % to 45 %] of
sales of conditionel LPG, [40 % to 50 %] of sales of small
tanks for domestic use and [55 % to 65 %] of sales of
large tanks for industrial use. Even though the combined
market share in conditioned LPG is less than the market
shares identified in the two types of bulk sales, the
merged entity would be able to exercise a market power
akin to dominance, as described below.

7.3.2. Position of TotalFina and Elf in LPG supply

— Production

(282) In 1998 the French refining industry produced
2,7 million tonnes of LPG (about 60 % butane and 40 %
propane). Some 0,1 million tonnes are also extracted
from natural gases, mainly in the Lacq area. Total
consumption of LPG in France was 3,2 million tonnes
in 1998, including 1,4 million tonnes of imports.

(283) In terms of production of LPG both by refineries and by
on-site extraction in France, TotalFina’s share of French
production is [30 % to 40 %] and Elf’s [10 % to 20 %],
i.e. [50 % to 60 %] between them. Because of
its
geographical position and its network of distributors,
the new entity would be the only one in a position to
distribute LPG throughout the whole country.

— Storage of imports

(284) As far as storage of imports is concerned, TotalFina and
Elf between them have the rights to 44 % of the capacity
of the nine import terminals ([...]), and the merged entity
would own five of the nine import logistics sites.

(285) Of these import sites, the example of Norgal may be
cited. The Norgal (Le Havre) depot is one of the biggest
import terminals (60 000 m3) in northern Europe. It is
the only refrigerated depot in France and, furthermore,
is easily accessible for imports from British refineries
and from the ARA area (it can accommodate ships of
any size and origin — 860 000 tonnes passed through
it in 1998). It accounts for 40 % of LPG imports into
In addition to TotalFina and Elf’s holdings,
France.
20,9 % of it is held by Vitogaz. After the merger, this
site would be 79,1 % owned by the merged entity, which
would have sole control of the depot (control by a two-
thirds majority of votes) and would be able to take any
decision unilaterally. This could lead to anticompetitive
behaviour to the detriment of the minority shareholder,
such as a refusal to share supplies. This would force
Vitogaz (with 4 000 m3 of capacity of its own) to use
smaller boats and thus increase its costs. The same
applies to the Cobogal depot, which would be subject to
60 % sole control by TotalFina after the merger.
Primagaz, the other shareholder, with a right to capacity
of 4 600 m3, could find itself excluded from the Norgal
site in the same way as Vitogaz.

(286) The merrged entity would have sizeable holdings in the
most strategic sites: 42,9 % of Geogaz in Lavéra; 60 % of
Cobogal in Ambès; 79,1 % of Norgal in Harfleur.

— Swaps

(22) LPG producers have recently developed a 6 kg bottle (the
traditional bottles were 13 kg) in order to give bottle use a new
boost. The new bottle is lighter and thus simpler to buy, transport
and install.

(287) At this moment, in order to operate properly on the
LPG market, the producers are supposed to have national
geographic coverage of the territory. They must therefore
be centred on an appropriate logistical base (large-scale
import storage, bulk relays or bottling centre). This

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logistical base is either the producer’s own or a third-
party’s base used for product swaps. As a competitor
states in his answer, ‘over the last twenty years, indepen-
dent LPG distributors in France have disappeared, having
failed to acquire a position as stockholder which would
have allowed them access, either direct or by swaps, to
LPG at competitive prices’.

(288) Product swaps enable competitors to be present in
geographical areas where they do not possess any
resources of their own, and thus to reduce the transport
of products (classified in the ‘hazardous’ category), limit
their logistical costs and reduce their cost price to remain

competitive in a given area. The various competitors
look for reciprocal transfer services in their various
centres and depots. In this case, the company which
owns the centre or depot transports the LPG there in
bulk and, on leaving the depot, hands it over to the
company which requested a transfer (or swap). These
transfer or swap services are linked to reciprocal transfers
of products, which take place through a system of
balanced swaps and which may represent more than
half of the quantities marketed by distribution com-
panies. The following table indicates the sources of
swaps for the various competitors. From it can be seen
the other
the significant degree of dependence of
producers on the merged entity following the merger.

Supply dependence of LPG operators

Total Gaz

Elf Antargaz

Primagaz

Vitogaz

Butagaz

Air Liquide

Swaps

Purchases

Swaps

Purchases

Swaps

Purchases

Swaps

Purchases

Swaps

Purchases

Swaps

Purchases

*

*

*

*

Total

*

*

Elf

Primagaz

Vitogaz

Butagaz

Air Liquide

Source: answers to the Commission’s questionnaires.

The table shows suppliers’ swaps with their competitors
as a proportion of their total sales of LPG. For example,
a [...] of Vitogaz’s sales depends on its swaps with
TotalFina and Elf.

*

*

*

*

*

*

Swaps: relative importance of TFE

Primagaz

Vitogaz

Butagaz

[...]
[...]

[...]
[...]

[...]
[...]

TFE
Others

TFE
Others

TFE
Others

The following table illustrates the importance for Prima-
gaz, Vitogaz and Butagaz of swaps with TotalFina and
Elf in their overall LPG swaps policy.

Source: answers to questionnaires.

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(289) The result is that, since these three competitors must
rely on swaps agreements to cover more of France, they
would depend on TotalFina/Elf for more than [...] of
their needs. This dependency would be particularly acute
for Vitogaz and Primagaz. Following the merger, the
policy of balanced swaps would be disrupted so that no
competitor of TotalFina/Elf would be able to carry out
purchases or imports of LPG to cover the whole of
France without passing through either a TotalFina/Elf
refinery or its import depots.

— Hub depots and bottling centres

(290) In order to ensure sufficient geographical coverage, the
various players make swap agreements between depots
and bottling centres. The merged entity would possess
48 out of 112 inland distribution depots, giving a [...]
share of the LPG market in term of sales. As for the
bottling centres, 13 would be owned outright were
TotalFina and Elf to amalgamate. In addition, the merged
entity would participate with a third party in nine
other centres. The following table shows the respective
positions of
the various players regarding bottling
centres.

Bottling centres

Region

Elf

TotalFina

Butagaz

Primagaz

Vitogaz

Valenciennes

Arleux

Courchelettes

Dainville

Herlisheim

Hauconcourt

Reichstett

Herlisheim

Sillery

Pont-à-Mousson Pont-à-Mousson

North

East

Lower Seine and centre

Ris (Orangis)

Petite Couronne

Queven

Chalon

Aubigny

Le Hoc

Le Hoc

Queven

Deux-Sèvres

Montereau

St Florentin

West

Donges

L’Herbergement

Vern

South-west

Boussens

Fenouillet

Nérac

Niort

Ambès

Lacq

Rodez

Niort

Ambès

Rhône Valley

Feyzin

Macon

Marignagne

Fos

Arnage

Vire

Nérac

Le Douhet

Pauillac

Lacq

Rodez

Lyon

Bollène

Rognac

Brest

St Pierre
des Corps

Ambès

Feyzin

Fos

South

Corsica

Source: Form CO.

Port-la-Nouvelle

Port-la-Nouvelle

Ajaccio

Bastia

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(291) It should also be noted that, as far as conditioned LPG is
concerned, all the players on the market not only
refuse to deliver non-bottled LPG but also require their
distributors (supermarkets, etc.) to sell LPG under their
brand name. Moreover, it appears that the system of
deposits on bottles (about FRF 200 per bottle) ties in
customers and thus increases barriers to entry and
weakens the retailers’ negotiating position. Contacts
between LPG producers and their concessionaires/distri-
butors contain clauses prohibiting them from taking
back gas bottles of other brands competing with those
for which they are depositaries. This contractual pro-
vision could have the effect of dividing the territory and
increasing customer loyalty by creating an obstacle to
the possibility of consumers changing their brand.
TotalFina has noted that the Competition Council and
the Paris Court of Appeal have held that these clauses,
although restrictive, contribute to control and safety by
preventing bottles from leaving their initial distribution
circuit. It nevertheless remains that, following the merger
and in view of the size of the merged entity, this practice
would lead to an increase in the barriers to expansion
by other suppliers and would encourage increasing
customer loyalty.

(294) In its reply to the objections, TotalFina explained that
the logistics of LPG were open and fluid and that the
merger would not lead to any noticeable change. As
regards the bottling centres, TotalFina noted that the
slight difference between the costs of bulk transport and
the cost of transporting bottled LPG favours a strategy
based on the limitation of the number of bottling centres
and an increase in the distance covered. The consequence
for the operators would be that they would no longer
have any need for several bottling centres nor any need
to conclude swap agreements with other distributors.
However, this statement does assume ease of access on
the part of the other operators to import market and to
the depots connected with it, and does not take account
of the control that TotalFina/Elf would exercise on
certain essential terminals, constituting a bottleneck, in
what concerns their competitors.

7.4. Creation of a dominant position

(292) The explanations above show that the operation would
undermine the balance of the LPG market by eliminating
an important player and making the other competitors
dependent, to varying degrees. The consequence would
be an increase in rivals’ costs and a decrease in their
competitiveness.

(293) After the merger, TotalFina/Elf would be the only
genuinely autonomous company on the LPG market.
Any other competitor which wanted to cover the whole
of France would have to be supplied by TotalFina/Elf or
gain access to its logistics that constitute a bottleneck.
According to the competitors, what constrains supply
on the LPG market is not only product availability, but
also availability of storage for imports, relay storage and
other logistical distribution resources (lorries, bottling
centres, etc.), since LPG storage capacity works in a ‘lean
production’ fashion so that certain competitors have
only eight days’ worth of stock in saturation periods
such as winter.

(295) TotalFina also points out that the past performance of
the other competitors demonstrates their capacity to
acquire and maintain their competitive positions in
terms of bottling LPG. However, this argument over-
looks the competition between Totalgaz and Elf Antar-
gaz before the merger, which allowed other competitors
to achieve market positions relatively close to those of
Total and Elf (for example, Primagaz), or even higher
(for example, Butagaz). The same goes for the presence
of the merged entity in shared depots (i.e. participation
with a third party in a single bottling centre). It seems
however that the attitude of TotalFina/Elf towards the
competitors would be completely altered by the merger.
As such, TotalFina/Elf would become independent from
its competitors in what concerns supplies of LPG whilst
the latter would still be dependent upon TotalFina/Elf if
they would want to cover the totality of the territory.
Moreover, TotalFina/Elf has different incentives, being a
vertically integrated oil company, than its competitors.
All the competitors on the LPG market are single-
product operators (i.e. only distribute LPG). The other
competitors either have exclusive supply contracts with
oil companies ([...]; Butagaz with [...]) or joint purchasing
policies ([...]). The risks of their being marginalised by
TotalFina/Elf in common depots was shown by their
answers to the Commission’s questionnaires. The Com-
mission cannot other than share the conclusion that
TotalFina/Elf intends to deduct from the competitive
situation of the bottling centres before and after the
merger.

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(296) Inasmuch as domestic heating oil would be a potential
source of competition for LPG, it should be noted that
TotalFina/Elf would be the largest domestic heating oil
producer in France. By controlling these two alternative
energy sources, the merged entity would be in a position
to regulate competition between these sources, notably
by manipulating the relative prices. Furthermore, the
discussions currently taking place in France on the future
of Gaz de France (GdF) must also be taken into
consideration. In view of the liberalisation of the gas
industry, the French Government, a shareholder in GdF,
is considering opening GdF’s capital to EdF, TotalFina
and Elf (23) (see Le Monde, 12 November 1999).

(297) In its reply to the Statement of Objections, TotalFina
was not able to demonstrate that the other competitors
subsist in spite of their dependency on the merged entity
for swaps or for import and relay logistics. With the
exception of Butagaz, whose competitive motivations
after the merger are discussed in the following recitals,
the other competitors would, in fact, be heavily depen-
dent on the new entity. Air Liquide obtains all of its
product from Elf. Vitogaz would remain dependent on
the parties to the merger, particularly in terms of
imports. Finally, Primagaz, which is supplied by [...],
would have difficulty in finding border crossing points
for its imports (particularly in the north of France).
TotalFina says that Primagaz is a competitor which
could react to any instance of increased demand for
LPG. It is supplied by [...] on the basis of long-term
contracts. Its import infrastructures in Brest, and,
if
necessary, imports from Belgium from the refineries in
Antwerp, would, according to TotalFina, provide ample
product
import alternatives in order to be able to
exercise effective competition. However, the inquiry
confirmed that Primagaz would have no flexibility with
which to increase its local supplies. [...] capacities in this
regard are already saturated. Furthermore, the depot in
Brest can take only small boats and can only be used to
supply Brittany;
imports of products from Antwerp
could cost between 20 % and 40 % more. Thus, a

(23) Extracts from the article in the daily Le Monde:

‘[GdF] must
simultaneously develop both upstream, by participating in the
development of oil and gas reserves, and downstream, to meet
customers’ requirements. The principle of opening the capital to
TotalFina/Elf and EdF (Le Monde, 29 October) is being adopted
with this in mind (...) By taking over Elf, TotalFina, like its main
competitors, would gain an important hold over gas distribution.
Elf has a pipeline network in the south-west, centred on the Lacq
deposit. The new group is de facto becoming an essential partner
for GdF.’

competitor such as Primagaz, which could be a source
of effective competition after the merger, would see its
capacity for action being restricted.

(298) None of the competitors would be in a position to
counter a restriction of quantity or an increase in price
by TotalFina/Elf. As explained above, Vitogaz and Air
Liquide would not have any margin for manoeuvre vis-
à-vis TotalFina/Elf and could not, therefore, be con-
sidered to be putting competitive pressure on it. Repsol
is only marginally present (based on its Spanish infra-
structure) in the south of France and would be dependent
on TotalFina/Elf should it want to extend its sales to
other geographical areas. Primagaz covers only part of
France and would depend on TotalFina/Elf to ensure its
cover. Only Butagaz could potentially attain a certain
autonomy from TotalFina/Elf.

(299) However, it is doubtful whether these companies, par-
ticularly Butagaz, even supposing that they were inde-
pendent of TotalFina/Elf would have any incentive to
thwart a price increase initiated by TotalFina/Elf. The
LPG logistical chain in France is frequently saturated in
winter (80 % of annual consumption), and the barriers
to expansion are very high.

(300) TotalFina/Elf’s competitors could not, therefore, signifi-
cantly increase their sales without shadowing a price
increase initiated by TotalFina/Elf and, therefore, have
every interest in shadowing price increases. One of the
large competitors stated that, if there were to be an
increase in the selling price of LPG by the parties to the
merger, it could not satisfy the deflected demand in the
‘medium and large bulk’ segment, while it could increase
its capacity by only 5 % in the bottled LPG and
‘small bulk’ segments. These restrictions apply to the
availability of products,
linked to the supply points
controlled by the parties to the merger, in particular the
Norgal import depot, which, for this competitor, is the
only option for imports for the northern part of France.
Another large competitor stated that it could meet
deflected demand for a time following a price increase
by the merged entity. Any prolonged demand, however,
would require major investment in equipment (bottles),
facilities
(transport
(storage capacity) and logistics
vehicles). To give a general idea: in order to increase
their storage capacity, the competitors would have to
equip themselves with bulk relays (cost: FRF [...] per
100 tonnes of storage for a bulk relay; construction
time: two to five years) and additional import points
(cost: FRF [...] for a 6 000 tonne depot; construction
time: two to five years).

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(301) The notified transaction would lead to TotalFina/Elf
holding a dominant position on the LPG market or the
markets for conditioned LPG, LPG in domestic tanks
and industrial LPG.

8. OTHER MARKETS

(302) The notified transaction would result in business activ-
ities in many other petroleum and chemical markets
being amalgamated. During the investigation, the Com-
mission received two complaints from customers of
TotalFina or Elf concerning the sulphur and ethylene
markets respectively. For the reasons given below, the
Commission’s investigations led it to conclude that the
notified merger would not create or strengthen a
dominant position on either of these two markets.

8.1. Sulphur market

(303) Sulphur is produced either from the refining of crude oil
(it is a by-product of the refining process) or from the
purification of natural gas extracted from gas reservoirs.

(304) The complainant states that TotalFina/Elf would acquire
a dominant position on a market for the sale of sulphur
which would cover the south of France since sulphur is
costly to transport because of the need to preserve it in
liquid form.

(305) The definition as proposed by the complainant, limiting
the geographical definition to the south of France cannot
be retained. The Commission’s market
investigation
showed that sulphur is often transported over long
distances, in liquid or solid form, that there is consider-
able overcapacity in France and in some other European
Union countries such as Germany, and that levels of
trade are high between Member States and inter-
nationally. For all these reasons,
it appears that the
relevant geographic market should be extended at least
to Europe. TotalFina/Elf’s combined share of such a
market would be around [10 % to 20 %].

(306) The Commission therefore considers that the notified
transaction would not create or strengthen a dominant
position on the market for the sale of sulphur.

8.2. Ethylene market

principally from naphtha (itself a product of the process
of refining crude oil) in steamcracking equipment. It is
used principally for the production of polyethylene or
PVC and no other product can replace it as a raw
material. Ethylene constitutes a separate product market,
and has been viewed as such by the Commission in
previous decisions (24).

(308) According to the complainant, Elf is in a dominant
position on the market for ethylene sales in France, and
that its position would be strengthened by the addition
of TotalFina’s downstream activities in polyethylene
production [...].

(309) TotalFina argues, on the other hand, that there is a
product market for ethylene but that geographically it is
a European market.

(310) Contrary to what is asserted by TotalFina, there are a
number of reasons for adopting a restricted definition of
the geographic market, and in any case, to France.
Ethylene is a gas which is difficult to transport because
it is flammable. In order to reduce transport costs and
logistical difficulties, polyethylene and PVC production
centres tend to be located near to the steam crackers
which produce ethylene. Over long distances, ethylene
is transported either in compressed form by pipeline or
in liquid form by special refrigerated ship. However,
such transport requires major investment in logistical
equipment such as pipelines and port terminals, which
in turn are connected by pipeline to one or, very often,
several polyethylene or PVC production plants.

(311) Although refrigerated ships constitute an alternative
source of supply, imports by sea require port instal-
lations. Maritime transport entails an extra cost of [...],
to which must be added the various transit costs in the
terminals and pipelines ([...]). Overall, importing from
the Mediterranean area would entail an extra cost of [...]
as compared to production in France (25).

(312) It is neither profitable nor practical to transport ethylene
overland by road or by rail because of its inflammable
nature.
is impossible in practice to move large
quantities of ethylene from a production site to an inland
consumption site if the two sites are not connected to
the same network of pipelines.

It

(307) Ethylene is a basic chemical product, which belongs to
the olefin group consisting of ethylene, propylene and
In western Europe, ethylene is produced
butadiene.

(24) Cases IV/M. 708 — Exxon/DSM, IV/M.361 — Nesté/Statoil,

IV/M. 550 Union Carbide/Enichem.

(25) [...].

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(313) In France, one pipeline network (south-eastern ethylene
pipeline) links the Mediterranean Sea and the Lavera
production plants (Elf Atochem/BP steamcracker) and
Berre (Shell/BASF steamcracker) via St Auban and Feyzin
(Elf Atochem/Solvay steamcracker) to Tavaux (BASF/Sol-
vay PVC factory). This pipeline is used by the ethylene
by-product plants of Lavéra (BP Amoco and Elf Atoch-
em), SCVF (Shell/ Elf Atochem), SPF (Elenac), Berre
(Elenac/Montell), St Auban (Elf Atochem), Pont de Claix
(Elf Atochem/RP), Jarrie (Elf Atochem), and Balan (Elf
Atochem). Other pipelines link a number of isolated
steamcrackers to occasional users. No French producer
of ethylene is capable of transporting the product to
ethylene consumers inland other than by a pipeline
network, and this pipeline network only covers France.
Nor are the French producers able to transport the
product elsewhere than within France, except by
exporting it by sea in limited quantities, given the
capacities of the terminals.

already present on the markets for PVC ([5 % to 15 %]),
high-density polyethylene ([0 % to 10 %]) and other
polyethylenes ([0 % to 10 %]). As such, nothing indicates
that the addition of TotalFina’s activities could funda-
mentally modify Elf’s interests to the detriment of the
other players that are active on the markets downstream
of ethylene.

(317) [...].

(318) For these reasons, the Commission considers that the
notified merger would not create or strengthen a domi-
nant position on the market for the sale of ethylene in
France.

(314) Thus, the geographic market for the supply of ethylene
can be considered at most to consist of all the territory
which can be supplied from one pipeline network.

VI. COMMITMENTS PROPOSED BY THE NOTIFYING PARTY
AND EVALUATION

(315) On a French ethylene market, Elf has a market share of
more than [50 % to 60 %], whether this was calculated
on the basis of production or of capacities available for
sale. Likewise, Elf has a strong presence as regards
import depots and storage (Elf Atochem has joint control
with BP Amoco of the Lavera terminal, which is the only
option for maritime access to the pipeline network
covering the south of France) and controls the transport
of ethylene by pipeline. Elf owns the entire south-eastern
ethylene pipeline network im Südwesten (Lavera —
Berre, Berre — St Auban, St Auban — Pt de Claix, Pt de
Claix — St Pierre de Chandieux) providing transport in
that region. Elf also has a majority holding ([...]) in the
ETEL pipeline, which links the Feyzin steamcracker to
Balan and Tavaux (Solvay PVC plant). Lastly, [...]. In the
light of Elf’s all-embracing position on the ethylene
market, both as producer and as owner of the transport
infrastructure,
it is plain that Elf holds a dominant
position on this market.

(319) On 19 January 2000, the notifying party has proposed
certain commitments in order to eliminate the compe-
tition problems as the Commission had identified in its
Statement of Objections issued on 26 November 1999.
On 28 January 2000, the notifying party has proposed
a set of modified commitments, taking into account the
results of the market test and modifications requested
by the Commission. On 31 January 2000, the services of
the Commission have expressed their negative reaction
regarding the modified commitments on the LPG mar-
ket. The notifying party has, on the same day, proposed
to sell off the LPG activities of the Elf Group. This new
proposal is the result of a negative market test of the
proposals that were considered, prima facie, by the
services of the Commission as sufficient. She has inter-
vened at the first working day following the Com-
mission’s receipt of the market test results. The proposal
clearly puts an end to all competition problems identified
for the market in question. For the same reason, it was
possible to consult the Member States in the framework
of the advisory committee in such short delay. As
such, exceptional circunstances are present, within the
meaning of Articles 18(2) of Regulation (EC) No 447/98,
justifying the filing of this new proposal after the end of
the foreseen quarterly deadline.

(316) The combination of TotalFina’s and Elf’s downstream
activities in polyethylene and PVC will not lead to a
strengthening of Elf’s dominant position. TotalFina’s
only European presence on the ethylene production
market is a production plant in Belgium. Apart from
that, it produces high-density polyethylene, with a share
of the European market of some [5 % to 15 %]. Elf is

(320) These commitments have been summarised and evalu-
ated in the following recitals,
in the same order of
relevant markets as treated by the Commission in its
Statement of Objections and the competitive evaluation
part of the current Decision. The text of the commit-
ments is joined to the Decision and forms an integral
part of this Decision.

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1. THE WHOLESALE MARKET, IMPORT TERMINALS AND PIPE-
LINES

1.1. Description

(321) TotalFina has committed to divest the following assets

or activities concerning import and inland terminals:

— the entire interest of 14,1 % held by the Elf group
and 3,5 %. held by TotalFina in the share capital of
SPMR. TotalFina/Elf will retain a non-controlling
participation of 29 % and three of the five seats it
held previously on the board of directors of SPMR.

— the combined interest of TotalFina and Elf, of

38,72 % of the shares in CPA,

— the entire interest held by the Elf group of 49 % of

the shares in SFDM,

— the entire interest held by the Elf group of 50 % in
CIM. CIM as such becomes independent from the
new entity,

— the entire interest directly held by the Elf group of
25,7 % of the shares in DP Fos. TotalFina/Elf loses
as such control in DP Fos and conserves a non-
controlling participation and three of the six seats
it held previously on the board of directors of DP
Fos,

— the entire terminal Fina Port-la-Nouvelle (TotalFina,

southern region),

— the 51 % interest in the share capital of Fina Lorient
where the new entity will retain two of the four
seats it held previously on the board of directors
(TotalFina, west-centre region),

— the entire terminal Fina Nanterre (TotalFina, Nor-

mandy/Paris region),

— the 8,76 % interest in the share capital of EPL Lyon
held by the Elf group (Rhône Alpes) where the new
the six seats it held
entity will retain five of
previously on the board of directors,

— the 6,54 % interest held by TotalFina in the share
capital of SES Strasbourg, in which TotalFina will
no longer hold an interest,

— in addition, TotalFina has committed itself

to
provide the terminals in Strasbourg (eastern region)
access to the ODC pipeline.

(322) TotalFina has undertaken to divest the following assets
and/or activities concerning pipelines for refined pet-
roleum products:

— the entire interest of 26,6 % held by the Elf group
in the share capital of Trapil TotalFina/Elf will
retain a non-controlling participation of 34,5 %
and four of the six seats it held previously on the
board of directors of Trapil,

— the entire interest of 49 % held by the Elf group in
the share capital of SFDM, the DMM pipeline
operating company. The pipeline operating com-
pany SFDM will become independent further to the
merger,

1.2. Analysis

(323) Concerning the wholesale market, the divestments pro-
posed by TotalFina will shield, completely or partially,
import and inland terminals in each of the six identified
regions from control exercised by TotalFina/Elf. The
storage capacities that as such have been liberated from
any possible influence of TotalFina/Elf are sufficient to
ensure the pressure of refined product supply as an
alternative to the refined products coming from Total
Fina/Elf or other refiners.
the
proposed commitments will allow the elimination of
any form of control the new entity would have had on
the pipelines, which can be considered as bottlenecks as
to supply of each of the regions taken into account.
Thus, the supply of refined petroleum product on the
wholesale market, made by TotalFina/Elf and the refiners
in general, could face competition through the avail-
ability of product supply from imports, no matter
whether the markets in question were national or
regional.

In addition to that,

(324) In the southern region, the divestment of the import
terminal of Port-la-Nouvelle will allow the market to
open up again for imports from the western part of the
French Mediterranean. The loss of control in the DP Fos
import terminal is a crucial element as this terminal
commands the access of imported product in the SPMR
pipeline transporting product in the Rhône area up to
Lyon. These two measures should reinstate the possi-
bility for demand to choose import supplies independent
from TotalFina/Elf and the other French refiners.

(325) In the region Rhône/Alpes/Auvergne/Bourgogne, Total
Fina will free storage capacity in the EP Lyon terminal.
The divestiture of the stake in CPA will lead to the loss
off all influence on the inland terminal of Saint Priest.
The decrease of the new entity’s participation in the
SPMR pipeline (down to 29 %) will exclude all possibility
of TotalFina/Elf controlling this pipeline, even when it
would seek allies among the shareholders with a small
stake in the pipeline. In fact, decisions are taken by a
two-thirds majority. Demand will as such be able to
have competition being exercised up to the fullest
between refiners and between refiners and imports.

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(326) In the eastern region, TotalFina loses all control over the
DMM pipeline and an inland terminal that is connected
to the ODC and offers in the Strasbourg region the
possibility of connecting three import terminals to the
ODC. The new entity will, in any case (see recital 327
below), divest
its participation in CPA (38,8 %), a
company that equally controls the import terminal SES
in Strasbourg. Concerning this terminal, the divestiture
will automatically reduce its influence. TotalFina has
equally proposed to renounce to its direct participation
of 6,54 % in the capital of SES, which, after having
divested its participation in CPA, would have been a
residual participation. In doing so, TotalFina/Elf loses
control over the supply sources and will free storage
capacities in the inland terminals that should allow
demand to select supply independently of the refiners.

(327) In the northern region, where TotalFina/Elf controls the
only refinery present, the new entity loses its control on
the DMM pipeline and a connected inland terminal. The
divestiture of the stake in CPA allows to eliminate the
pre-emption rights on storage capacity the new entity
has in the Dunkirk import terminal. It also leads to the
elimination of all possible influence on the management
of CPA in this terminal. The undertakings should as such
allow demand to select supply independently from
TotalFina/Elf and the restoration of an effective compe-
tition.

without being dependent upon TotalFina/Elf and the
other refiners. The undertakings will also safeguard the
existence of accessible inland terminals not controlled
by the new entity.

(330) As to the commitments to give up seats on the board of
directors, these will be (with exception to the seat
liberated in EPL) the result of commitments covering the
total divestiture of certain participations (as the case in
CPA) or the loss of control (as the case for SPMR, Trapil,
CIM, SFDM, Lorient and DP Fos) The sale of the EPL
stake will not be accompanied by a concurrent storage
capacity but rather a loss of control over this terminal.
The commitment to abandon a director’s seat does not
nullify the control of this terminal
in the hands of
TotalFina/Elf, as the latter would retain the majority in
the General Assembly. As such the Commission takes
note of TotalFina/Elf’s intention to abandon a seat on
the board of directors in EPL, without this being a
condition for declaring the operation compatible with
the common market.

(331) As regard the markets for the provision of services for
storage capacity in import terminals connected to means
of bulk transport, the undertakings offered by TotalFina
will completely eliminate the overlap and should allow
competition to be reinstated.

(328) In the region west/centre, TotalFina propose to divest
51 % of the import terminal situated at Lorient in
Brittany, to abandon its control over the import terminal
of Donges independent together with the DMM pipeline
that is connected. TotalFina/Elf will still control the only
refinery in the region (Donges) but will no longer control
the alternative import sources. As such, the conditions
for an effective competition are reinstated.

(332) As regard the markets for the provision of transport
services of refined petroleum products by pipeline,
the proposed commitments completely eliminate the
overlap by selling SFDM and by divesting the partici-
pation Elf held in Trapil and SPMR. These remedies
should allow competition to be reinstated.

(329) In the Normandy/Paris region, TotalFina will abandon
all control on the import terminal of CIM Havre and
will, by divestment of the stake in CPA, eliminate the
pre-emption rights on storage capacity the new entity
has in the Rouen import terminal. This divestiture also
leads to the elimination of all possible influence on the
management of CPA in this terminal.
In addition,
TotalFina/Elf
loses control over the Trapil pipeline
system. In addition, TotalFina has committed to sell a
terminal
the Paris region and the
commitments on the divestiture of participations in CIM
and SFDM will lead to a loss of control on three inland
terminals in the south of the Paris region (CIM Coignière,
CIM Grigny and SFDM La Ferté Alais). These undertak-
ings should allow wholesale clients to obtain supply,

in the north of

(333) The market test conducted by the Commission has
confirmed that the proposed commitments will allow
effective and lasting competition to be reinstated on the
wholesale market, the markets for the provision of
services for storage capacity in import terminals connec-
ted to means of bulk transport and the markets for the
provision of transport services of refined petroleum
products by pipeline. Certain third parties have stressed
the importance of the storage capacity rights held by
TotalFina and Elf in certain geographically confined
areas, such as certain parts of Brittany for heating oil,
and the absence of any commitments on these positions
held by the new entity. However, the proposed remedies
will free sufficient import or inland storage capacities to
allow demand to find supplies independently from the
French refiners (and particularly, the new entity).

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2.

SALE OF MOTORFUELS ON HIGHWAYS

2.1. Description

(334) TotalFina has committed to divest 70 service stations
situated on motorways included in the relevant market
as defined in this Decision. These stations are name-
tagged and comprise 35 Elf stations, 27 Total and eight
of the Fina brand. The choice of these stations takes the
problems identified in recital 219 of this Decision into
account.

(335) Should the divestment of certain service stations fail to
take place as foreseen, because of refusal of the highway
concession holder or a lessee manager to agree [...], then
the notifying party has committed itself either to sell to
another buyer, or to replace the station in question with
another station. When such substitution is applied, the
notifying party will have to propose an equivalent
station (similar in terms of sales, geographical location
and the contractual terms of the concession). In all cases,
the Commission has to agree and the notifying party has
committed itself to consult the French authorities dealing
with competition issues.

2.2. Analysis

(336) Further to the operation, Elf would contribute 77 sta-
tions to the new entity, which means that the overlap is
nearly completely eliminated. This is equally the case
when calculated on the basis of volumes sold.

(337) Regarding the possibility to substitute a service station
with another service station in case of refusal by a third
party, the measures proposed by TotalFina should allow
the proposed remedies to have their full effect. The
Commission has taken note of the parties’ intention,
indicated in the last sentence of the second indent of
point 37(h) of the commitments, to consult the French
authorities in such case.

the Commission. As such, these observations cannot be
retained. Other third parties have indicated that TotalFi-
na and Elf offer private card access to their network and
that as such a considerable part of the customer base of
the divested service stations will remain customer to the
new entity, resulting in amputating significantly the sales
volume of a given retail station and increasing the
market power of the new entity. TotalFina has informed
the Commission that sales made through private cards
is around [...] of the total volume. As an answer to
competitors’ fears that the divested service stations’ sales
volume would be significantly reduced, Totalfina has
committed to offer the acquirer the possibility to
integrate TFE’s private card system for a period of three
years, in case the acquirer would not have such a private
card system or would not belong to a private card
network regrouping multiple retailers. The Commission
considers that the commitment, proposed by TotalFina,
relating to private cards should allow the acquirer to
maintain the volume of sales in the divested service
stations and should provide sufficient
time for the
acquirer to initiate proper incentives towards the cus-
tomer base.

3.

SALE OF AVIATION FUELS

3.1. Description

(339) TotalFina commits to divest the 50 % participation held
by Elf in the supply groups GAT (Groupement pour
l’Avitaillement de Toulouse-Blagnac), and the 50 %
participation held by Elf in GALYS (Groupement pour
l’Avitaillement de Lyon-Satolas).

3.2. Analysis

(340) The undertaking proposed eliminates as such the overlap
between Elf and TotalFina entirely on the two markets
the
concerned. The market
proposed remedies can lead to restoring an effective and
lasting competitive situation.

test has indicated that

4.

LIQUID PETROLEUM GAS

4.1. Description

(338) The market test has confirmed that, on condition that
the purchaser of the divested service stations can rely on
independent supply capacity, competition on the market
for the sale of motorfuels on highways will be reinstated.
A number of third parties have estimated that the
divestment would not be sufficient. One of these com-
panies has based this consideration on a market defi-
nition stretched to service stations that have not been
included in the relevant market definition as adopted by

(341) The undertakings proposed by TotalFina consisted at
first in (i) reinstalling the structural independence of
(ii) opening up LPG import
direct competitors [..],
terminals ([...] Norgal at Le Havre, [...] Geogaz in the
south, [...] Cobogal
in Bordeaux) and other logistic
facilities (two bottling facilities, respectively in the south
and west of France), and (iii) divesting customer base
with the associated logistic assets for small volumes bulk
in the southern half of France.

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(342) The proposals concerning the LPG were not considered
by the market test tot be sufficient to warrant an
immediate restoration of effective and lasting compe-
tition. First, there was uncertainty as to the legal capacity
of TotalFina offering to sell capacity in the Norgal
terminal rather than a stake. Secondly, each of the stakes
offered for divestiture was not big enough to enable
autonomous and economical supplies from large size
ships. Thirdly, the sum of the volumes offered was
merely enough to supply the needs of the divested
customer base and of Air Liquide. Fourthly, as regards
the sale of conditioned LPG, the proposal did not provide
any customer base whereas the majority of sales are
made with supermarkets that, as a condition for retailing
the product, demand substantial sums. Fifthly, [...].
Finally,
it was not sure whether the customer base
offered for divestiture could benefit from the same
logistics as was previously the case within the Elf group.

(343) In reply to the results of the market test, TotalFina
proposed a set of modified undertakings, consisting
essentially of increased import capacities offered for
divestiture. These capacities were substantial, but could
not address the other issues raised in relation to con-
ditioned LPG [...]. At best, the modified remedies would
have achieved less dependency for the actual competitors
and a lowering of the barriers to entry for potential
competitors. However, given the concentrated structure
of the markets, competitors would have an incentive to
follow a price increase initiated by TotalFina/Elf rather
than seeking to increase their market shares. The entry
of new competitors in the market being highly unlikely,
the modified remedies could not have led to a restoration
of competition conditions. The uncertainties related to
the effects of the remedies were aggravated by the
dispersion of the proposed divestments which could as
such not ensure an effect, similar to the one achieved
through a global divestment, and would have probably
led to crating entities dependent on the incumbents on
the market.

within the merged company. Finally, the storage facilities
of Donges and Lacq, being linked either to the Donges
refinery or to the natural gas field of Lacq, will remain
within the combined entity. In parallel to this divestiture,
the notifying party undertakes to maintain the supply
arrangements at the Norgal and Cobogal import ter-
minals and to supply the divested business, on a non-
exclusive basis, for [...] years. Finally, as a minority
shareholder in Vitogaz, TotalFina/Elf has committed not
to oppose to the latter presenting itself as acquirer of
Elf AntarGaz. In case such offer would be retained,
TotalFina/Elf commits to sell its participation to Vitogaz.

4.2. Analysis

(345) Because of its late submission, the proposal to divest Elf
Antargaz could not be market-tested. However, there
can be no reasonable doubts given its importance and
given the full function nature of Elf Antargaz, that this
commitment can lead to the immediate restoration of
effective and lasting competition. In addition, Elf Antar-
gaz is an important market player for each of the three
uses of LPG: conditioned, ‘small bulk LPG’ and ‘medium
and large bulk LPG’. As a whole, even if a combined
TotalFina/Elf would surpass Total’s initial level thanks to
the combination of refining capacity and the Donges
and Lacq infrastructure, their new market share level
would not be one of dominance whereas the total
number of competitors on the market will have been
maintained.

5. MODALITIES FOR APPLYING THE PROPOSES REMEDIES

5.1. Deadlines

(344) Replying to the serious doubts the Commission had
expressed on the modified remedies, the notifying party
has withdrawn its preceding offer and has offered to
divest the whole of Elfs’s LPG activities in France. These
activities are essentially regrouped in the company Elf
Antargaz but also include assets owned by other entities
within the Elf group. Some of the assets of Elf Antargaz
are not linked to LPG activities in France and will remain

is

[...].

(346) The time scale proposed by TotalFina to apply the
commitments
In case TotalFina/Elf has
accomplished signing an irrevocable agreement within
this deadline, a trustee will be charged with selling off
the assets in question during a new time scale of [...].
This time scale of [...] seems acceptable on the basis of
the Commission’s practice and the particular character-
istics of these commitments, as there are a significant
number of assets to be divested and many different
configurations that these divestitures can take (certain
purchasers could show interest in ‘sets’ of assets).

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5.2. Trustee

(347) The notifying party will appoint, subject to approval
from the Commission, the trustee who will be in charge
of monitoring the compliance with the undertakings.

(352) The trustee will take all decisions relating to the commer-
cial management of the import terminal of Port-la-
Nouvelle and the motorway service stations. The notify-
ing party will ensure the administrative and technical
management of these assets. This provision appears
proportionate, notably because of the integration of
these entities within the TotalFina and Elf groups.

5.3. Hold separate

5.4. Non-solicitation clauses

(348) It is common practice that the notifying party commits
itself, for the period between the date of the decision
taken by the Commission an the actual divestment, to
manage the assets, due to be divested, on a hold separate
basis. Such commitment has a dual objective: on the one
hand to ensure that the commercial and competitive
value of the assets will be maintained during this period
and on the other hand to ensure that a combination,
even if limited in time, would not lead to an alteration
of the competition conditions on the relevant markets.

(349) The undertakings submitted by the notifying party limit
information exchange at each level of the assets to be
disposed. They provide that all necessary measures will
be taken to avoid divulgation of confidential
infor-
mation. Personnel seconded to the entities to be divested
will have to choose between TotalFina/Elf and the entity
being divested. The undertakings make a distinction
for the
according to the nature of
representation of the notifying party on the board of the
divested entities.

the divestment

(350) As to the sale of stakes in companies, TotalFina/Elf will
replace the board members with the trustee. Board
members originating from TotalFina or Elf and who are
present intuiti personae at the board will provide the
trustee with a power to vote. There will therefore be
only very limited possibilities for the merged entity to
either influence the businesses to be divested or to
benefit from confidential information.

(351) In must be noted that the notifying party will keep its
position as chairman in CIM and SFDM as well as its
position of executive director in SFDM. However, he
trustee will approve in advance all important manage-
ment decisions and monitor the day-to-day manage-
ment. The trustee will thus position himself between
CIM and SFDM and TotalFina/Elf.

(353) The proposed commitments foresee a non-solicitation
clause [...] regarding the customer base of the divested
terminals and the Elf Antargaz business and for the
totality of the personnel. This clause should ensure the
purchaser of the necessary conditions to establish the
purchased assets in an effective and lasting manner on
the markets in question.

(354) The commitments contain a non-repurchase clause for
a period of [...] for the whole of the divested assets.
Hence, TotalFina/Elf could only marginally adjust the
fullness of the commitments by repurchasing certain
assets. In fact, the analysis of the effect of the proposed
remedies is based on the combined effect of the remedies
and could not artificially separate each of the divestiture
elements.

5.5. Nature of the purchaser and organisation of the

divestment process

(355) The notifying party has stressed, when addressing the
proposed commitments,
in so far as she has
that
provided to the Commission all elements necessary for
verifying that an effective and lasting competition will
be immediately restored, she considers herself to be free
to (i) sell the totality or a significant part of the assets to
be divested in one or multiple operations to one single
purchaser and (ii) to initiate exchanges with (comparable)
assets located outside France.

(356) The Commission takes note of the party’s intentions as
indicated in points 9, 10 and 37(f) second and third
indents of the commitments.

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(357) Many of the third parties questioned have expressed
reserves on this discretion, as expressed by TotalFina in
its proposed commitments. These third parties have
notably expressed fears that a new entrant, through
exchange deals with TotalFina/Elf, would have only very
limited incentives to compete with the combined entity
because of common interests or multiple contacts on
the distinct markets. Equally so, certain third companies
have explained that, regarding the commitments for the
wholesale market and logistics, a divestiture of the assets
in one or multiple operations to one single purchaser
would not lead to the desired opening of the wholesale
market needed for counterbalancing the combined
refining capacity of the new entity.

(358) The Commission will take into account these fears
the procedural stages for applying the

at each of
commitments.

(359) As may be seen from the analysis, TotalFina/Elf and its
competitor refiners (Shell, BP Amoco and ExxonMobil)
share common interests in the wholesale market, and
notably face competition from the non-integrated
retailers in the market (essentially supermarkets). Under
these circumstances, if one or all of these players would
be chosen by the notifying party or the trustee to acquire
the assets up for divestment in the wholesale market,
the market for the provision of services for storage
capacity in import terminals connected to means of bulk
transport and the markets for the provision of transport
services of refined petroleum products by pipeline, the
Commission will take these elements into account when
evaluating the proposal. The eventual application of
other refiners will notably have to be appreciated in the
light of the referred to analysis and, if the case, in the
light of the contacts these other refiners could have with
TotalFina/Elf on other markets.

(360) Equally, the Commission will take into account the
already very concentrated nature of the market for the
sale of motorfuels on highways, and its oligopolistic
market structure based on collective dominance, if BP
Amoco, Shell and ExxonMobil would be proposed by
the notifying party or the trustee to acquire service
stations on motorways. The remarks concerning the
application of other refiners in the preceding paragraph
also apply to this market.

(361) In general, the notifying party has committed not to sell
assets up for divestiture to an entity in which it has a
significant influence. This clause has to allow complete
independence from the acquirer(s).

VIII. CONCLUSION

(362) The commitments proposed by the notifying party seem
to be of such nature that they will lead to the immediate
restoration of an effective and lasting competition on
the market in question. The majority of the commit-
ments has to be considered as necessary to this effect.
As such, leaving aside the elements which the Com-
mission has merely noted (liberation of a director’s seat
on the board of EPL Lyon — point 27(g), modalities for
the divestment of the assets foreseen in points 9,10 and
37(f) second and third indents of the commitments; and
consultation of the French authorities in the case of
substitution of the offer of service stations on the
motorways as provided for in point 37(h) of
the
commitments), compliance with the entirety of the
commitments submitted to the Commission is a con-
dition for approval of the concentration project,

HAS ADOPTED THIS DECISION:

Article 1

On condition that the commitments annexed to this Decision
— with the exception of the elements foreseen in points 9, 10,
27(g), 37(f), second and third indents, and 37(h), last phrase of
the second indent, are fully complied with, the concentration
notified between TotalFina and Elf Aquitaine is declared
compatible with the common market and the functioning of
the EEA Agreement.

Article 2

This Decision is addressed to:

TotalFina
F-92069 Paris La Défense Cedes

Done at Brussels, 9 February 2000.

For the Commission

Mario MONTI

Member of the Commission

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ANNEX 1

COMMITMENTS PROPOSED BY TOTALFINA

I. COMMON PROCEDURES FOR THE IMPLEMENTATION OF COMMITMENTS

Nature of transferee

1.

In order to maintain effective competition on the affected markets, the notifying party undertakes to divest
the assets which are the object of the present commitments (hereinafter the assets) to one or more transferees
which fulfil the following conditions:

(a)

neither of the TotalFina or Elf groups shall have a material interest, either direct or indirect, in the
transferee(s).

None the less, this provision shall not prevent those companies in which TotalFina or Elf holds material
interests which the notifying party undertakes fully to divest in accordance with the present commitments
from acquiring some or all of the assets.

In this regard, the notifying party undertakes not to oppose, either directly or indirectly, the candidacy
of one or other of such companies or the adoption by them of the measures necessary for implementing
such candidacy;

(b)

(c)

the transferee(s) shall be viable operators, either potentially or currently active on the markets in
question, capable of maintaining or developing effective competition;

the transferee(s) shall have obtained or shall be reasonably likely to obtain all the necessary authorisations
for the acquisition and exploitation of the assets.

2.

The notifying party shall submit to the Commission, as soon as possible:

(a)

the draft information document(s) concerning the divestiture of each category of assets (refined product
depots, interests in pipelines, motorway service stations, assets in the LPG sector), to be transferred to
potential purchasers;

(b)

the list of potential purchasers which the notifying party intends to contact.

If the Commission does not pronounce upon the documents in question within five working days from the
date of their submission, such documents shall be deemed to be accepted by the Commission.

3.

Subject to the Commission’s approval of the transferees and of the specific procedures set out below for assets
related to storage and to transportation of refined products and for motorway service stations, the transferee(s)
in relation to all or parts of the assets may be:

(a)

operators established outside France using or holding substantial interests in activities in the petrol
sector (production, refining, storage, promotion and sale) or more widely in the energy field, or financial
institutions;

(b)

entrepositaires agréés or financial institutions established in France.

4.

The selection of the transferee(s) shall be subject to the approval of the Commission. The request for approval
of the transferee(s) shall include the necessary information to permit the Commission to verify that the
proposed transferee(s) meet the conditions indicated in point 1. The Commission shall inform the notifying
party of its approval or rejection of the proposed candidates for transferees within 10 days from the date of
submission of the request for approval of the proposed transferee(s). The absence of a response from the
Commission within 10 days shall be considered as an exceptional circumstance within the meaning of point 6.

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Time limit

5.

6.

7.

8.

9.

The notifying party undertakes to conclude irrevocable divestiture agreements related to the assets within [...]
from the date of receipt of the Decision authorising the merger pursuant to Article 8(2) of Regulation (EEC)
No 4064/89 (hereinafter, the first time limit). The transfer of the assets shall become effective within a
maximum of [...] following the conclusion of the divestiture agreement (hereinafter, the second time limit).

In the event of exceptional circumstances which prevent the conclusion of the divestiture agreement or the
effective divestiture, the first or second time limit may be extended at the discretion of the Commission and
upon the duly justified request of the notifying party.

Any request for extension of the first time limit shall be presented to the Commission by the end of [...] of the
first time limit at the latest. Any request for extension of the second time limit shall be presented by the [...] of
the second time limit at the latest. The Commission will issue its decision on the request for an extension
within eight days from the date of its submission, and the absence of reaction from the Commission at the
end of the eight days shall not be considered as tacit acceptance by the Commission of the request for an
extension.

Divestiture of the assets

As long as the notifying party has provided to the Commission the means of ensuring that the divestiture is
of such a nature as to immediately re-establish effective and long-lasting competition:

The notifying party shall be free to proceed with the sale of the assets according to the conditions and
procedures of its choice.

The notifying party may divest all, or a significant part, of the assets, in either one or several operations, to a
single transferee.

10.

The notifying party shall also be entitled to proceed with the divestiture of assets by means of the exchange of
assets of the same or a different nature outside France.

11.

The notifying party undertakes not to regain control of the assets during a period of [...] from the date of
divestiture of the assets in question.

Subject-matter of the divestiture

12. Without prejudice to the supplementary details provided in point 37(b) concerning certain particular assets
(motorway service stations), the assets (other than shareholdings in the companies specified in points 26(a) to
(d), 26(f) to (h), 31(a) to (c), 38 and 40(c) and (d) shall be divested as autonomous operational entities. For this
purpose, the assets shall include tangible assets (land, buildings and other property, fixtures) and intangible
assets (customers, computer databases, contracts, authorisations and permits) which are necessary for the
management of the assets in question and to enable the transferee to compete effectively. The personnel
employed directly within the assets will be divested with the assets in question in accordance with Article L.
122-12 of the French Labour Code.

13.

14.

The notifying party shall inform the transferee of the possibility of putting at its disposal on a temporary basis,
or of transferring definitively, current employees from the administrative or commercial management of
TotalFina or Elf whose services prove necessary for the operation and management of the assets divested to
the transferee. If the transferee so requests, the notifying party undertakes to negotiate in good faith putting
the said personnel at the disposal of the transferee on a temporary basis or transferring them to him
definitively.

The notifying party shall inform the transferee of the possibility of concluding with identified third parties
contracts for the supply of products or services necessary for the operation of the assets. The notifying party
undertakes, if the transferee so requests and subject to the agreement of third party suppliers, to ensure the
assignment to the transferee of contracts for the supply of goods and/or services which have been concluded
by the TotalFina and Elf groups with third party suppliers and which relate to the assets divested.

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15.

The notifying party undertakes not to solicit the employment of personnel transferred with the assets during
a period of [...] from the date of divestiture of the assets in question. The notifying party shall make its best
efforts to encourage the personnel not to resign from their employment before the date of divestiture.

Preservation of conditions of competition and of the value of assets until divestiture

16.

The notifying party undertakes to preserve the full economic and competitive value of the assets until the date
of divestiture of the assets, in accordance with good commercial practice and to the extent possible with the
means at its disposal under the present commitments.

In particular, the notifying party undertakes to not carry out any act upon its own authority which may have
a significant impact on the economic value, the management or the competitiveness of the assets until the
date of divestiture of the assets.

The notifying party also undertakes not to carry out upon its own authority any act which may be of such a
nature as to alter the nature or the scope of activity of the assets, or the industrial or commercial strategy or
the investment policy of the assets in question.

Moreover, the notifying party undertakes to put in place the necessary measures to avoid the disclosure of
confidential information concerning the assets within the TotalFina or Elf groups or to third parties, with the
exception of information necessary for the divestiture of these assets in the best possible conditions in
accordance with the present commitments.

As regards the personnel from the TotalFina and Elf groups which are seconded to the assets, the notifying
party undertakes, within [...] from the date of receipt of the Decision approving the merger, to invite such
members of the personnel to chose between the possibility of either resigning from their post within the
TotalFina or Elf groups in which case the latter shall make their best efforts for them to be employed within
the assets concerned, or being reintegrated within the TotalFina or Elf groups, in which case the latter shall
make their best efforts to replace such personnel with individuals who are independent of the TotalFina and
Elf groups.

If the notifying party considers that there are requirements in relation to the preservation of the viability and
competitiveness of the assets, it shall contact the Commission to consider an extension of the time limit of [...]
indicated above. In the absence of a reaction from the Commission within [...] following submission of the
duly reasoned and justified request, the demand shall be deemed to be accepted by the Commission.

The notifying party shall provide to the trustee referred to in point 20 all the means necessary and all
information which the trustee considers useful for the purpose of enabling the trustee to be informed of the
ongoing management of the assets.

Trustee

17. Within eight days following receipt of the Decision approving the merger pursuant to Article 8(2) of
Regulation (EEC) No 4064/89, the notifying party shall propose the names of three trustees to the Commission
and shall provide a draft mandate in accordance with the provisions of the present commitments which shall
include, in particular, the details of the proposed method of payment of the trustee (without revealing the
amount to be paid).

18.

The Commission shall issue its decision on the proposed trustee and on the draft mandate within eight days
of receiving the proposal.

The Commission may, within the time limit specified, approve or reject one, two or all three of the trustees
proposed. If only one of the three trustees proposed is approved by the Commission, that trustee shall be
appointed by the notifying party. If more than one trustee is approved by the Commission, the notifying party
shall appoint one of them as trustee at its own choice. It all the trustees are rejected by the Commission, the
Commission shall select a trustee which shall be appointed by the notifying party.

The notifying party shall amend the draft mandate if the Commission so requests.

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19.

20.

In the absence of a response from the Commission to the proposal from the notifying party within eight days
from the date of its receipt, the names of the three trustees and the draft mandate put forward shall be deemed
to be accepted by the Commission.

The trustee shall be appointed by the notifying party within five working days following the approval of the
Commission. The remuneration of the trustee shall be agreed between the trustee and the notifying party. A
copy of the mandate provided to the trustee shall be given to the Commission.

When the mandate is signed, the notifying party may make no further modification to the mandate without
the approval of the Commission. At the request of the trustee, the Commission may require the amendment
of the mandate if it is shown that it does not permit the trustee to fully carry out the tasks given to it.

21.

The trustee’s assignment shall be to:

(a)

(b)

ensure that the notifying party maintains the viability and saleability of the assets and continues the
management and operation of the assets in the ordinary course of trade and in accordance with past
practice, until the date of effective divestiture of the assets;

report on a regular basis to the Commission on the state of implementation of the commitments
specified above and on the execution of the trustee’s tasks. For this purpose, the trustee shall draw up a
confidential report every four weeks and submit it to the Commission in the five working days following
each period, or at the request of the Commission.

The report shall cover the following points, in particular:

(i)

(ii)

confirm that the assets are managed in a manner such as to preserve their full economic and
competitive value, in accordance with point 21(a);

indicate the steps taken with a view to the execution of the commitments, the reaction of third
parties contacted (potential transferees, third parties with rights of consent and/or pre-emption
rights, labour organisations and administrative authorities) and the state of formalisation of the
acts of divestiture; and

(iii)

identify, if necessary, the aspects of the mandate which the trustee has not been able to fulfil and
the reasons justifying the non-execution of the mandate in this respect.

A non-confidential version of the report submitted to the Commission by the trustee shall also be sent
to the notifying party;

(c)

as regards shareholdings in the companies specified in points 26(a) to (d), 26(f) to (h), 31(a) to (c), 38,
40(c) and (d) and 41, which the notifying party undertakes to divest and the seats on the boards of
directors which the notifying party undertakes to vacate:

(i)

(ii)

subject to the provisions below, exercise the voting rights attached to the shareholdings to be
divested and to take the place of the director(s) holding the seats to be vacated or to obtain on
their behalf a proxy (except in respect of the seats of the President of the board of directors of CIM
and of SFDM, as indicated in point 21(c)(v), it being specified that one SFDM director’s seat to be
vacated shall not be taken by the trustee or be subject to a proxy issued to the trustee and that, in
such a case, the director in question shall give a proxy to the President of SFDM in accordance with
the instructions of the trustee;

to exercise the powers invested in those people whose board seats he has taken or those who gave
him a proxy in accordance with point 21(c)(i). In the completion of this task in the areas concerning
significant sales of assets, payment of dividends, company dissolution, new share issues and
increases or reductions in capital, the trustee shall take into account the protection of the financial
interests of the notifying party and will consult the notifying party on such matters without
communicating to him any confidential information, on condition that the primary obligation of
ensuring that the company in question remains a viable entity is not prejudiced;

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(iii)

(iv)

(v)

should the trustee consider it useful, request whichever of the TotalFina or Elf groups is owner of
the shareholding to be divested and/or the directors whose board seats must be vacated pursuant
to the present commitments to be present at the entire or part of the proceedings of the general
shareholders meeting or of the meeting of the board of directors and, if necessary, request that
they exercise at such time the powers invested in them, on condition that they do not communicate
confidential information concerning the company in question to the TotalFina or Elf group;

in any event, when the decision on the sale of shares between shareholders or on the approval of a
new shareholder is put to the general assembly of shareholders or to the board of directors, either
the TotalFina group or the Elf group, whichever is applicable, or the directors representing them
shall have the right to either direct the trustee on the position to be adopted on such questions, or
participate themselves in the general assembly or the board of directors meeting which is presented
with such a question in its agenda and take part in the vote on that question in accordance with
the rules established in the articles of association of the company in question;

as regards CIM and SFDM where the notifying party holds the Presidency of the board of directors
(CIM and SFDM) and the position as Managing Director (SFDM), give prior approval to acts of
general policy and strategic decisions and to supervise the daily management actions carried out
by the President of the board and/or the Managing Director of the companies in question, with the
purpose of ensuring that the assets relevant thereto are managed in a manner such as to preserve
their full economic and competitive value, without communicating any confidential information
to the notifying party;

(d)

as regards assets other than company shareholdings, as specified in points 26(e), 36 and 40(a):

(i)

take all decisions relating to the commercial activities of the assets to be divested within the
currently existing management structures until the date of effective divestiture of the assets in
question, it being understood that the notifying party shall ensure the ongoing administrative and
technical management of the assets (such as payment of salaries, regular technical inspections, etc.)
in accordance with past practice, under the supervision of the trustee;

(ii)

ensure that the assets in question are utilised in the ordinary course of trade and in accordance
with past business practices until the date of the effective divestiture;

(iii)

ensure that measures have been taken in order that no information concerning the assets in
question which is sensitive from a competition standpoint is communicated to the notifying party,
with the exception of information which is necessary for the divestiture of those assets according
to the best possible conditions and in accordance with these commitments;

(iv)

in general, ensure that the full economic and competitive value of the assets is preserved and take
all necessary measures for this task;

and

(e)

in general, verify the satisfactory completion of the present commitments by the notifying party.

22.

23.

24.

In case of failure by the notifying party to carry out the commitments in the time limit specified in points 5
to 7, the trustee shall be charged with taking up negotiations with interested third parties, for the purpose of,
as a trustee, selling the assets in good faith at the best possible price to a transferee approved by the
Commission. The divestiture commitments shall be completed within a maximum period of [...], which may
be extended in accordance with the provisions in points 6 and 7.

If the notifying party fails to substantially respect its commitments, the Commission may supplement the
trustee’s task as set out earlier, in order to provide the trustee with every possibility of ensuring that the
commitments are respected.

The notifying party undertakes to provide the trustee with all reasonable assistance as well as all information
necessary for the execution of his task, as described above. The notifying party shall make available to the
trustee one or several offices on its premises or in the premises of the entities subject to the present
commitments. The notifying party shall hold regular meetings with the trustee, according to a timetable
agreed between them, in order to provide the trustee, either orally or in document form, with all information
necessary for the completion of his task. At the request of the trustee, the notifying party shall provide the
trustee with access to sites which are being divested.

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25.

As soon as the tasks given to him are completed, the notifying party shall request the Commission to be
allowed to discharge the trustee from his assignment. The Commission may, nevertheless, require the
reappointment of the trustee if it later appears that the commitments have not been completely carried out.

II. SUBSTANCE AND IMPLEMENTATION OF THE COMMITMENTS CONCERNING THE MARKET FOR
THE OFF-NETWORK SALE OF REFINED PRODUCTS: DEPOT LOGISTICS

A.

SUBSTANCE OF THE COMMITMENTS

26.

The notifying party undertakes to divest:

(a)

(b)

(c)

(d)

the entire interest of 38,72 % held by BTT, a 50/50 jointly controlled subsidiary of TotalFina and Elf
groups, in the share capital of CPA, owner of, or holder of an interest in, the following depots: CPA
Rouen (Normandy/Paris region), CPA Dunkerque (northern region), STOCKBREST (western region), CPA
Saint Priest (Rhône-Alpes region), and SES Strasbourg;

the entire interest of 49 % held by the Elf group in the share capital of SFDM, a company operating, in
addition to the DMM pipeline, four depots: SFDM Donges, SFDM La Ferté Alais, SFDM Vatry la Chaussée
sur Marne and SFDM Saint Baussant;

the entire interest of 50 % held by the Elf group in the share capital of CIM which is the owner of three
depots: CIM Le Havre, CIM Coignières and CIM Grigny;

the entire interest of 15,07 % directly held by the Elf group in the share capital of DP Fos, as well as the
entire interest (of 76,65 %) held by the Elf group in the share capital of Fos Import, shareholder with an
interest of 10,63 % of the share capital in DP Fos;

(e)

the companies Fina Port-la-Nouvelle and Fina Nanterre;

(f)

the 51 % interest in the share capital of Fina Lorient;

(g)

the 8,76 % interest held by the Elf group in the share capital of EPL Lyon;

(h)

the 6,54 % interest held by the TotalFina group in the share capital of SES Strasbourg, in whose depot
TotalFina/Elf shall no longer hold an interest.

27.

The notifying party undertakes to relinquish at the latest between the end of the trustee’s mandate and the
effective divestiture of the asset in question:

(a)

the three seats held by the TotalFina and Elf groups on the board of directors of CPA;

(b)

the three seats held by the Elf group on the board of directors of CIM;

(c)

three of the six seats held by the TotalFina and Elf groups on the board of directors of DP Fos;

(d)

the three seats held by the TotalFina group on the board of directors of Fina Nanterre;

(e)

the three seats held by the TotalFina group on the board of directors of Port-la-Nouvelle;

(f)

two of the four seats held by TotalFina on the board of directors of Fina Lorient;

(g)

one of the six seats held by the Elf group on the board of directors of EPL.

28.

The notifying party also undertakes not to increase the level of representation of TotalFina/Elf on the boards
of directors concerned, as results from the implementation of the above commitments, during a period of [...]
from the date the board seats specified above are vacated. In case of alteration of the total number of seats on
the board of directors of the company in question, the number of seats held by TotalFina/Elf will be modified
in due proportion with the above, the total, if necessary, being rounded down without this figure being less
than one.

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29.

The notifying party undertakes, for a period of [...] from the date of divestiture of the depot in question, not
to solicit customers of the depots which are the object of the present commitments in which, following the
completion of the above commitments, TotalFina/Elf shall no longer hold any ownership interest, in order to
propose to such customers lease contracts or rights of passage in depots owned by TotalFina/Elf, or in which
TotalFina/Elf holds an interest, and which are located within the customer area of the depots specified in the
present commitments.

B. MEANS OF IMPLEMENTATION

30.

As regards the implementation of the commitments set out above, the notifying party makes reference to the
common procedures described above and adds the following points:

(a)

(b)

as soon as the notifying party receives the Decision approving the merger and approval of the
information document specified in point 2(a), it shall consult the various operators both outside and
within France that may be interested in the acquisition of all or part of the assets in question and shall
provide them with the technical, environmental, contractual, commercial and financial data and
specifications enabling them to make an offer;

the name of the proposed acquirers of all or part of the assets in question shall be subject to the approval
of the Commission according to the conditions laid down in the common procedures and subject to the
rights of consent and of pre-emption provided by the articles of association of CPA, SFDM, CIM, DP Fos
and Fos Import, EPL and SES.

It is recalled that, as regards SFDM and CIM, the acquirer(s) of the divested assets must also be approved by
the relevant Government commissioners and the authority granting the exploitation rights (the Government
for SFDM and Le Havre Port authority for CIM).

III. SUBSTANCE AND IMPLEMENTATION OF THE COMMITMENTS CONCERNING THE MARKET FOR
THE OFF-NETWORK SALE OF REFINED PRODUCTS: PIPELINES FOR FINISHED PRODUCTS

A.

SUBSTANCE OF THE COMMITMENTS

31.

The notifying party undertakes to divest

(a)

the entire interest of 26,60 % held by the Elf group in the share capital of Trapil;

(b)

(c)

the entire interest of 49 % held by the Elf group in the share capital of SFDM, the DMM pipeline
operating company;

the entire interest of 14,10 % held by the Elf group and an interest of 3,50 % held by TotalFina in the
share capital of SPMR.

32.

The notifying party undertakes:

(a)

(b)

to make, within [...] from the date of receipt of the Decision approving the merger, a proposal to the
GIE Groupement Pétrolier de Strasbourg (GPS) to offer access through pipes owned by GPS which link
ODC with SPLS to all operators in the area (SES, Bolloré, Propétrol) which make such a request, within
the capacity limits of the pipes, and to vote in favour of this proposal; it being specified that any
disagreement over the utilisation of capacity of GPS pipes shall be put before an expert jointly appointed
by the parties in question and, in the absence thereof, before the Commercial Court of Strasbourg;

at the same time to make a proposal to SPLS to carry out as soon as possible the necessary works to
open up SPLS’s pipes in order to enable the operators identified above within the area to transport their
products coming from and going to the ODC without having to make use of SPLS’ tanks, and to vote in
favour of this proposal; and

(c)

to carry out the collective treatment of all contaminated products on the site of the GPS resulting from
the traffic of all operators, immediately after completion of the above work.

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29.5.2001

33.

The notifying party undertakes to vacate, at the latest between the end of the trustee’s mandate and the date
of the effective divestiture of the asset in question:

(a)

two out of six seats on the board of directors of Trapil which comprises 10 in total;

(b)

two out of five seats on the board of directors of SPMR which comprises 10 in total;

(c)

four seats held by Elf on the board of directors of SFDM which comprises eight in total.

34.

The notifying party also undertakes not to increase the level of representation of TotalFina/Elf on the boards
of directors of Trapil and SPMR, as it results from the implementation of the abovementioned commitments,
during a period of [...] from the date the board seats specified above are vacated. In case of alteration of the
total number of seats on the board of directors of Trapil and/or SPMR, the number of seats held by
TotalFina/Elf will be modified in due proportion with the above, the total, if necessary, being rounded down
without this figure being less than one.

B. MEANS OF IMPLEMENTATION

35.

As regards the implementation of the commitments set out above, the notifying party makes reference to the
common procedures described above and adds the following details:

(a)

(b)

as soon as the notifying party receives the Decision approving the merger and the approval of the
information document specified in point 2(a), as indicated in the common procedures it shall consult
the various operators both outside and within France that may be interested in the acquisition of all or
part of the assets in question and shall provide them with the technical, environmental, commercial and
financial data and specifications enabling them to make an offer;

the name of the candidates for the acquisition of all or part of the assets in question shall be subject to
the approval of the Commission according to the conditions laid down in the common procedures and
subject to the rights of consent and of pre-emption provided by the articles of association of Trapil,
SPMR and SFDM, as well as the agreement of the Government commissioners.

IV.

SUBSTANCE AND IMPLEMENTATION OF THE COMMITMENTS CONCERNING THE MARKET FOR

THE SALE OF PETROL ON MOTORWAYS

A.

SUBSTANCE OF THE COMMITMENTS

36.

The notifying party undertakes to divest 70 Elf, Total and Fina service stations on motorways which fall within
the market definition as provided by the Commission.

They shall comprise 35 Elf, 26 Total and 9 Fina stations.

The 70 service stations which are the object of these commitments are listed in Annex 1 hereto, indicating the
motorways on which they are located, and where applicable the motorway operator company under whose
jurisdiction the station falls, the annual sales turnover in petrol and in other products, as well as the date of
expiry of the exploitation licence.

B. MEANS OF IMPLEMENTATION

37.

As regards the means of implementation of the commitments set out above, the notifying party refers to the
common procedures described above, and adds the following details thereto:

(a)

as soon as the notifying party receives the Decision approving the merger and the approval of the
information document specified in point 2(a), it shall consult the various operators as specified in the
common procedures, both outside and within France, that may be interested in the acquisition of the
assets being divested. The notifying party shall supply to operators that may be interested in purchasing
the assets being divested, the contractual, environmental, commercial, technical and financial data and
specifications relating to the service stations in question in order that they may draw up such offers;

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(b)

the divestiture of the service stations shall be completed through the assignment
for valuable
consideration of the exploitation licence granted by the motorway operators as well as installations,
fixtures, equipment, machinery and tools which are essential for their operation.

The personnel employed directly at the points of sale shall be transferred with the service stations.

The notifying party specifies that the only tangible and intangible assets located on or used at the service
stations in question which shall not be transferred, are those assets related to intellectual property rights
and know-how and, in particular, the notifying party’s branded assets and software management systems;

(c)

in order to ensure the immediate re-establishment of effective and long-lasting competition, the notifying
party undertakes to propose to purchasers of all or some of the divested service stations, to transfer to
them a sufficient number of administrative, commercial and accounting management personnel.

The number, functions and conditions of transfer of these employees shall be determined on a case-by-
case basis in accordance with, in particular, the wishes of the purchasers, the number of stations being
acquired and the means of management that they intend to use (direct management or location-gérance
agreement).

In addition, the notifying party undertakes to notify the purchasers of stations of the possibility of
concluding with them, on a temporary basis, administrative management contracts with regard to the
points of sale in question until such time as they have set up their own management infrastructure. The
notifying party undertakes to conclude such contracts with those purchasers that request it.

Until the date of effective transfer of the service stations in question, the notifying party undertakes to
supply such stations at internal transfer prices.

During the same period, the sale price of petrol in the stations in question shall be fixed by the trustee
on the basis of Platt’s quotations and profit targets which he will determine with a view to maintaining
the viability, competitiveness and saleability of the said stations;

(d)

the notifying party undertakes to inform the transferee of the possibility of allowing holders of the
TotalFina GR and Eurotrafic cards and Elf Credit and PAN cards to use their cards for a maximum period
of [...] from the date of effective transfer of the service station in question in those divested stations
where such cards are accepted at the date of notification of the Decision approving the merger, on
condition that the transferee does not already operate a card system for the sale of petrol which competes
directly with the TotalFina and Elf cards indicated above and that he complies with the management
principles in relation to the cards in question such as established by contract with a subsidiary of TRD
SA, called Centre de Management de Transaction Monétiques SA (definition of products and services
provided by the card, technological, financial, administrative and commercial specifications concerning
the card system, responsibilities and complaints, invoicing and payment of suppliers, debt collection,
processing costs and administration, commercial and financial procedures, duration and clause providing
for allocation of competence).

Should the transferee so request, the notifying party undertakes to conclude with him an agreement for
the purpose of allowing holders of the cards in question to use them in stations divested during a
maximum period of [...] from the date of effective transfer of the service station in question, to the extent
that and for as long as the conditions specified in the first indent of this point 37(d) remain fulfilled.

The notifying party specifies that it shall not influence the terms or conditions of sale of petrol and other
products in the transferred stations by means of the card systems in use at such stations and that, in any
event, this condition takes precedence over the consequences resulting from membership of the
transferee(s) in the card management system.

As regards cards other than those of the TotalFina and Elf groups, such as the DKV and UTA cards, used
in the divested stations, the notifying party undertakes to carry out the steps specified in point 14;

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29.5.2001

(e)

any potential purchaser of all or some of the service stations shall be capable of meeting the requirements
of the terms and conditions and the consultation regulations imposed by the motorway operator
companies.

As a result, those operators intending to make a purchase offer, in addition to the conditions set out in
the common procedures above, must be capable of showing their direct or indirect experience in the
operation of a service station network of any type;

(f)

offers made by potential purchasers may target either a single station, a group of stations or all the
stations subject to the present commitment.

The offers may include, either in whole or in part, proposals for the exchange of assets, either of the
same nature or not, outside France.

In the event of receiving equivalent offers, the notifying party reserves the right to give priority to those
offers covering the entire network or a significant number of stations, as well as to those offers including
proposals to exchange assets;

(g)

(h)

in order to facilitate completion of this commitment, any offer to acquire five or more service stations
shall include a proportionate number of stations whose exploitation licence comes to an end in or before
2005. The notifying party may also give priority to offers for five or more stations over offers for four
or less stations which do not include the obligation set out in the preceding sentence;

the notifying party shall present the purchase offer or offers which it has retained for the approval, on
the one hand, of the motorway operator companies in question and, on the other hand, of the lease-
holder manager(s) (locataires-gérants) which may be concerned.

In case of refusal by the motorway operator company and/or by the lease-holder manager, the notifying
party may either propose to swap the service station in question with another service station or put
forward for approval the potential purchaser which made the second best offer. For this purpose, the
notifying party shall present a duly documented and supported request to the Commission. The notifying
party shall also make contact with the French competition authorities.

If the Commission does not reject this request in writing within 10 working days after receiving it, the
proposal of the notifying party shall be considered as accepted.

In the event that service stations are to be swapped, the notifying party confirms that the new station
that will be proposed shall have the same characteristics as the first station and, in particular, an
equivalent volume of sales of petrol, an equivalent turnover in other products and a similar date of
expiry of its exploitation permit and shall be located in the same area (except where this proves
impossible because the obligation to make a swap results from the motorway operator company’s
refusal to approve the offeror). Moreover, the swapping of service stations shall not affect the overall
economic and competitive value of the initial proposal;

(i)

it will be for the transferees, in agreement with the motorway operators in question, to carry out the
works required for the transfer of the exploitation licence. The notifying party shall not be held liable for
delays in the implementation of such works, following the conclusion of the divestiture agreements.

V. SUBSTANCE AND IMPLEMENTATION OF THE COMMITMENTS CONCERNING THE MARKET FOR
THE SALE OF AVIATION FUELS AT TOULOUSE-BLAGANC AND LYON-SATOLAS

A.

SUBSTANCE OF THE COMMITMENTS

38.

The notifying party undertakes to divest:

(a)

the 50 % interest held by Elf in GAT (Groupement pour l’Avitaillement de Toulouse-Blagnac); and

(b)

the 50 % interest held by Elf in GALYS (Groupement pour l’Avitaillement de Lyon-Satolas).

B. MEANS OF IMPLEMENTATION

39.

As regard the means of implementation of the commitments set out above, the notifying party refers to the
common procedures described above and adds the following details thereto:

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(a)

as soon as the notifying party receives the Decision approving the merger and approval of the
information document specified in point 2(a), it shall consult the various operators referred to in the
common procedures, both outside and within France, that may be interested in the acquisition of all or
part of the assets in question. The notifying party shall supply to operators that may be interested in
purchasing the assets being divested, the contractual, environmental, commercial, technical and financial
data and specifications relating to membership in GAT and GALYS in order that they may draw up such
offers,

(b)

the transferee shall fulfil the objective conditions for admission as provided for in the articles of
association of GAT and GALYS.

VI. SUBSTANCE AND IMPLEMENTATION OF THE COMMITMENTS CONCERNING THE LPG MARKET

A.

SUBSTANCE OF THE COMMITMENTS

40.

The notifying party undertakes:

(a)

To divest 100 % of the shareholding held by Elf in Elf Antargaz, a company having as its object the
marketing of LPG, with respect to its LPG operation in the metropolitan areas of France.

(b)

The following shall be excluded from the present divestiture:

— the shareholdings held by Elf Antargaz in those subsidiaries operating in the LPG sector outside

metropolitan France,

— the shareholdings held by Elf Antargaz on behalf of Elf Antar France in companies in France or

abroad which are not active in the LPG sector.

Before the transfer of shares in Elf Antargaz takes effect, the notifying party shall transfer the exempted
shareholdings, as indicated above, to Elf Antar France. This transfer shall be subject to the prior approval
of the trustee who shall consult the Commission.

(c)

The divestiture of the Elf Antargaz shares, in addition to the assets and companies directly and entirely
owned by Elf Antargaz, also includes the shareholdings held by Elf Antargaz in the following companies
in France:

— GIE Norgal: 52,67 %

The notifying party, prior to the divestiture, shall put forward and vote in favour of an amendment
to the articles of association of Norgal for the purpose of setting out in the articles the rules on the
current allocation of capacity of Norgal, as described in Annex 2 to the present commitments.

The notifying party undertakes to continue the pooling contract established for the purpose of
procurement with the other current shareholder in Norgal, for a period of [...] from the date of
effective transfer of the depot, and if the transferee so requests and if the other Norgal shareholder
is in agreement, to admit the transferee to the pool.

— Rhône Gaz SA: 50,62 %

— Sigap-Ouest SARL: 66,67 %

— Wogegal SA: 100 %

— Gaz Est Distribution SA: 100 %

— Nord GPL SA: 100 %

— Gie Floregaz: 90 %

— Midi Pyrénées Gaz SA: 75 %

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Official Journal of the European Communities

29.5.2001

— Cobogal SA: 15 %

The notifying party undertakes to carry out for a period of [...] from the date of the effective
transfer of shares the common procurement contract with the other current shareholder in
Cobogal.

The notifying party undertakes also to propose to the purchaser of the shares to become a party to
the common procurement contract, if the latter so requests and if the other current shareholder in
Cobogal agrees. The notifying party undertakes, if necessary, to propose to the purchaser of the
shares, if the latter so requests, a supply contract for a term of [...] on the conditions of the
TotalFina group.

— SP de Quéven: 50 %

— SP Bus Paris: 50 %

— GIE GPL Bus: 25 %

— GIE Groupement Technique Citerne: 20 %.

(d)

In addition to the divestiture of the Elf Antargaz shares, Elf’s shareholdings in the following companies,
with respect to their LPG operation in the metropolitan areas of France, will be divested:

— Sobegal SA (the refilling centres of Lacq, Nérac, Rodez and the bulk depot of Domène): 78 % held

by the Elf group

— Geogaz SA: 16,67 % held by the Elf group

— Geovexin SA: 44,9 % held by the Elf group.

(e)

In addition, the notifying party undertakes to vacate the directors’ seats held by the Elf group on the
boards of the companies included in the scope of the present divestiture within the time limits foreseen
for the effective transfer of the assets and in accordance with the conditions specified in the common
procedures for the implementation of the commitments.

41.

The notifying party undertakes not to solicit the customers of Elf Antargaz during a period starting from the
date of receipt of the Decision approving the merger and expiring [...] after the date the divestiture of the Elf
group’s shareholding in Elf Antargaz becomes effective.

B. MEANS OF IMPLEMENTATION

42.

As regards the implementation of the present commitment, the notifying party refers to the common
procedures identified above and adds the following details:

(a)

(b)

(c)

the name of the potential purchasers of all or part of the assets shall be subject to the approval of the
Commission in accordance with the conditions set out in the common procedures;

as soon as the notifying party receives the Decision approving the merger, it shall consult the various
operators referred to in the common procedures, both outside and within France, that may be interested
in the acquisition of all or part of the assets in question. The notifying party shall supply to operators
that may be interested in purchasing the assets being divested, the commercial, technical and financial
data and specifications necessary in order that they may draw up such offers;

in the event that Vitogaz intends to acquire shares in Elf Antargaz, the notifying party undertakes not to
oppose such acquisition. If Vitogaz is the transferee in respect of the shares in Elf Antargaz, the notifying
party undertakes to divest its shareholding (34 %) in Vitogaz according to the conditions with respect to
form and time limits set out in the agreements between the notifying party and the other shareholder in
Vitogaz.

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43.

The notifying party points out that those assets related to intellectual and/or industrial property rights or
know-how belonging to the notifying party shall be transferred with the shareholdings in question to the
extent that they are used within the framework of the LPG activity of Elf Antargaz in metropolitan areas of
France, with the exception of trade marks owned and/or utilised by the Elf group as well as all proprietary
management software belonging to it.

The notifying party shall grant to the transferee a licence to use the trade marks employed by the Elf group in
the LPG sector in metropolitan areas of France for a maximum period of [...] from the date the divestiture
becomes effective.

In the event that rights relating to intellectual and/or industrial property, or know-how owned by the notifying
party, transferred with the divested shareholdings, cover a geographic area outside the metropolitan areas of
France, the divestiture of such rights shall be subject to the grant by the transferee to the notifying party of a
royalty-free licence for the same term as the intellectual and/or industrial property right divested, allowing the
notifying party to use such rights outside the metropolitan areas of France.

44.

45.

The notifying party shall ensure that for as long as the shareholdings in question have not been transferred to
a purchaser, Elf Antargaz will be managed as a separate and saleable entity, with its own set of management
accounts, and shall notify the management of Elf Antargaz that the company will be managed on an
independent basis and under the supervision of the trustee, in order to guarantee the preservation of its
profitability and of its market value.

The notifying party undertakes, after the divestiture of the shares in Elf Antargaz becomes effective, to inform
the purchaser of the possibility of concluding with it, for a transitional period with a maximum [...], a non-
exclusive supply agreement for the purpose of ensuring for the purchaser the necessary supplies during the
period required for the establishment of alternative solutions.

Site name

Motorway Company

Toll

Translay Est

A28

DDE

no

Jonchets les Réc-
ompenses

A5

SAPRR

yes

Manage-
ment

Con-
cession
deadline

Elf

Elf

[...]

[...]

Roucas

A7

ASF

no

Total

[...]

Scoperta

A8

Escota

yes

Elf

[...]

Porte-la-Drôme

A49

Area

yes

Total

[...]

Savignac

A62

ASF

yes

Total

[...]

Beuzeville Sud

A13

SAPN

yes

Elf

[...]

Deux Mers

A62

ASF

yes

Total

[...]

Verdun Sud

A4

Sanef ex
Appel

yes

Total

[...]

Beaune-les-Mines

A20

DDE

La Courneuve

A1

Sanef

no

no

Saint Léger

A1

Sanef

yes

Total

[...]

Elf

Elf

[...]

[...]

Volume
m3

FRF
1 000s

Double/Sandwich

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

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29.5.2001

Site name

Motorway Company

Toll

Manage-
ment

Con-
cession
deadline

Volume
m3

FRF
1 000s

Double/Sandwich

Assevillers

A1

Sanef

yes

Elf

[...]

Saugon

A10

ASF

yes

Total

[...]

Usseau

A10

Cofi-
route

yes

Total

[...]

yes

yes

Elf

Elf

[...]

[...]

Fenioux Est

A10

ASF

Jaunay Clan

A10

Poitiers Chince

A10

Meung

A10

Cofi-
route

Cofi-
route

Cofi-
route

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

yes

Fina

[...]

[...]

[...]

[...]

[...]

yes

Elf

[...]

[...]

[...]

[...]

[...]

Fenioux Ouest

A10

ASF

yes

Elf

[...]

Parce

Porte
Sud

A11

ASF

yes

Total

[...]

d’Angers

A11

no

Fina

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

La Pivardière

A11

yes

Elf

[...]

[...]

[...]

[...]

[...]

Cofi-
route

Cofi-
route

Rosny Sud

A13

SAPN

yes

Elf

[...]

Saint Hilaire

A26

Sanef

yes

Total

[...]

Souchez

A26

Sanef

yes

Total

[...]

Champ Rolland

A26

Sanef

yes

Total

[...]

Rumancourt

A26

Sanef

yes

Esterel

A8

Escota

yes

La Combe Ronde

A36

SAPRR

yes

Bois Guillerot

A36

SAPRR

yes

Elf

Elf

Elf

Elf

[...]

[...]

[...]

[...]

Jura

A39

SAPRR

yes

Fina

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

29.5.2001

EN

Official Journal of the European Communities

L 143/71

Site name

Motorway Company

Toll

Manage-
ment

Con-
cession
deadline

Volume
m3

FRF
1 000s

Double/Sandwich

Saverne

A4

Sanef

yes

Total

[...]

Valmy

A4

Sanef ex
Appel

yes

Total

[...]

Brumath Ouest

A4

Sanef

no

Elf

[...]

Tardenois Sud

A4

Sanef

yes

Fina

[...]

Tardenois Nord

A4

Sanef

yes

Elf

[...]

Verdun

A4

Sanef ex
Appel

yes

Total

[...]

Valleiry

A40

ATMB

yes

Bonneville Nord

A40

Area

yes

Elf

Elf

[...]

[...]

Cesardes

A41

Area

yes

Total

[...]

Le Guiers

A43

Area

yes

Elf

[...]

Arclusaz

A43

Area

yes

Fina

[...]

L’Abis

A43

Area

yes

Elf

[...]

Voreppe

A48

Area

no

Total

[...]

Jonchets

A5

SAPRR

yes

Total

[...]

Chien Blanc

A6

SAPRR

yes

Total

[...]

Graveyron

A6

SAPRR

no

Total

[...]

Maison Dieu

A6

SAPRR

yes

Total

[...]

Les Chères

A6

SAPRR

no

Fina

[...]

Acheres Est

A6

SAPRR

yes

La Ferté

A6

SAPRR

yes

Beaune Merceuil

A6

SAPRR

yes

Elf

Elf

Elf

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

L 143/72

EN

Official Journal of the European Communities

29.5.2001

Site name

Motorway Company

Toll

Manage-
ment

Con-
cession
deadline

Volume
m3

FRF
1 000s

Double/Sandwich

Nemours

A6

SAPRR

yes

Dardilly

A6

DDE

Naurouze

A61

ASF

Arzens

A61

ASF

Bazadais Nord

A62

ASF

Lacq Nord

A64

ASF

Mornas les Adrêts

A7

ASF

Crousilles

A7

ASF

no

yes

yes

yes

yes

yes

yes

Elf

Elf

Total

Total

Elf

Elf

Elf

Total

L’Allier Doyet

A71

SAPRR

yes

Fina

L’Allier Saulzet

A71

SAPRR

yes

Fina

Salbris Ouest

A71

Cofi-
route

yes

Elf

La Lozaire

A75

DDE

L’Aval le Coudray

A81

Tavel

Villemolaque

Fabergues Sud

Fabergues Nord

A9

A9

A9

A9

Cofi-
route

ASF

ASF

ASF

ASF

no

yes

yes

yes

yes

yes

Fina

Elf

Total

Total

Elf

Elf

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

29.5.2001

EN

Official Journal of the European Communities

L 143/73

ANNEX 2

STRUCTURE OF NORGAL

Participation

Propane
(P1)

% Propane
(P1)

Butane
(P2)

% Butane
(P2)

Storage capacity rights

TotalFina

Elf

Vitogaz

Total

26,40 %

52,66 %

20,94 %

100,00 %

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]