2004/310/EC: Commission Decision of 26 July 2000 declaring a concentration compatible with the common market and the EEA Agreement (Case COMP/M.1806 — AstraZeneca/Novartis) — Council Regulation (EEC) No 4064/89 (notified under document number C(2000) 2309) (Text with EEA relevance)
Date: 2000-07-26
Institutions: European Commission
Subjects: agro-industry, economic concentration, exchange of information, merger control, pharmaceutical industry

16.4.2004

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Official Journal of the European Union

L 110/1

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 26 July 2000

declaring a concentration compatible with the common market and the EEA Agreement

(Case COMP/M.1806 — AstraZeneca/Novartis)

Council Regulation (EEC) No 4064/89

(notified under document number C(2000) 2309)

(Only the English text is authentic)

(Text with EEA relevance)

(2004/310/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Whereas:

Having regard to the Treaty establishing the European
Community,

(1)

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

On 18 February 2000,
the Commission received
notification of a proposed concentration by which the
undertakings Novartis AG (Novartis) and AstraZeneca
plc (AstraZeneca) would spin off and merge their
activities in the area of crop protection into a newly
Syngenta AG (Syngenta).
incorporated
Novartis would also transfer
to
Syngenta.

seeds business

company,

its

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

amended

as

Having regard to the Commission decision of 21 March 2000
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),

(3)

(2)

After examination of the notification, the Commission
concluded that the notified operation falls within the
serious
the Merger Regulation and raises
scope of
doubts as to its compatibility with the common market.
Therefore, on 21 March 2000, the Commission decided
to initiate proceedings pursuant to Article 6(1)(c) of the
Merger Regulation.

THE PARTIES

Novartis was created by the merger between Ciba-Geigy
and Sandoz in December 1996 (4). Novartis
is a
multinational group of companies operating worldwide

(1) OJ L 395, 30.12.1989, p. 1; corrected version OJ L 257, 21.9.1990,

p. 13.

(2) OJ L 180, 9.7.1997, p. 1.
(3) OJ C 92, 16.4.2004.

(4) Commission Decision 97/469/EC (Case

IV/M.737, Ciba-Geigy/

Sandoz) (OJ L 201, 29.7.1997, p. 1).

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in the field of life sciences. Its focus is on health care
(pharmaceuticals,
(crop
protection, seeds, animal health) and consumer health
(nutrition, self-medication).

agribusiness

generics),

AstraZeneca was created by the merger between Astra
AB and Zeneca Group plc in spring 1999 (5). The
business activities of AstraZeneca are the research,
development,
of
and
pharmaceuticals and agrochemicals.

production

marketing

CONCENTRATION

Novartis will undertake an internal reorganisation so
that its non-American agrochemicals business as well as
its non-American seeds business are held by a newly
created company, Novartis Agribusiness AG, and its
American agrochemicals business as well as its US seeds
business are held by a US corporation, Novartis US Co.
Novartis' animal health business will not be included in
the transaction. Novartis will
then demerge Novartis
Agribusiness AG in favour of its shareholders, by way of
a rights offering and Novartis US Co. will be demerged
by a distribution of its shares to Novartis shareholders
(or to a trustee acting for all Novartis shareholders).
Novartis Agribusiness AG will merge into Syngenta
under a Swiss statutory merger process and Novartis US
Co. will merge into Syngenta by a United States
triangular merger. Therefore, Novartis' shareholders will,
on completion of
in
Syngenta as well as in Novartis.

the transaction, hold shares

AstraZeneca will undertake an internal reorganisation in
order
to divide its agrochemicals business from its
retained business so that its agrochemicals business can
be transferred to Syngenta. AstraZeneca will declare a
dividend to its shareholders which will be satisfied by
the
Therefore,
AstraZeneca's shareholders will, on completion of the
transaction, hold shares in Syngenta as well as in
AstraZeneca.

Syngenta.

transfer

shares

of

in

the

a
Therefore,
concentration within the meaning of Article 3(1)(a) of
the Merger Regulation.

constitutes

operation

notified

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

COMMUNITY DIMENSION

The combined aggregate worldwide turnover in 1998 of
the concerned businesses exceeds EUR 5 000 million
(Novartis,
[…] (*), AstraZeneca […]*. The EC-wide
turnover of the relevant businesses of both Novartis and
AstraZeneca exceeds EUR 250 million (Novartis, […]*,
AstraZeneca […]*. Neither Novartis nor AstraZeneca
achieves more than twothirds of its aggregate EC-wide
turnover within one and the same Member State.
Therefore, the concentration falls within the scope of
the Merger Regulation.

The operation qualifies for cooperation with the EFTA
Surveillance Authority pursuant
to Article 2(1)(c) of
Protocol 24 of the EEA Agreement as the concentration
is liable to create or strengthen a dominant position as a
result of which competition would be significantly
impeded in the territories of
the EFTA States or a
substantial part thereof.

COMPETITIVE ASSESSMENT

(crop protection)

The merger concerns the economic sectors of crop
protection chemicals
and seeds.
Novartis will transfer its activities in the areas of crop
protection and seeds to Syngenta, while AstraZeneca
will only transfer
its activities in the area of crop
protection.

Crop protection products protect crops against all forms
of damage which might be caused by weeds, insects or
fungi. Crop protection products are normally subdivided
according to what they are designed to control. The
parties suggest that the main product groups are the
following:

— fungicides (for disease control),

— herbicides (for weed control),

— non-selective herbicides (for weed control),

— insecticides (for insect control),

— nutrients (trace elements)

to overcome deficiency

symptoms, e.g. iron deficiency,

(5) Commission decision of 26 February 1999, in Case IV/M.1403 —

Astra/Zeneca.

(*) Parts of

this text have been edited to ensure that confidential
information is not disclosed; those parts are enclosed in square
brackets and marked with an asterisk.

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— seed treatment

for

the protection of seeds and

herbicide markets:

subsequent plants against disease and insects,

— plant growth regulators,

— industrial weed control products,

— non-agricultural insecticides,

— active substances.

— maize

herbicides
Netherlands and Belgium,

in

France, Germany,

the

— potato herbicides in Belgium and France,

— post-emergence
Denmark,

graminicides

in

potatoes

in

— post-emergence graminicides in sugar beets in the

United Kingdom, Belgium and Denmark,

In addition to crop protection products, Syngenta will
also be active on the seeds markets.

— post-emergence graminicides

in oilseed crops in

Germany, the United Kingdom and Denmark,

(12)

had

and

also

serious

insecticides

non-agricultural
In the decision under Article 6(1)(c),
expressed

The concentration does not raise competition concerns
industrial weed control
in the markets for nutrients,
active
products,
the
substances.
Commission
doubts
concerning the rodenticides markets. These doubts were
based on the fact that although Novartis' business is not
transferred to Syngenta, Novartis managers will be
represented on the Syngenta corporate governance
structures. Furthermore, according to a competitor, the
combined market share of the two entities would be
considerable. However, the total sales of Novartis for
rodenticides is small (EUR […]*) and […]*. Therefore,
the serious doubts that the merger might lead to the
creation of a duopolistically dominant position on some
the rodenticides markets, expressed in the Article
of
6(1)(c) decision, are unfounded.

(13)

the reasons

For
the concentration
indicated below,
would have given rise to the creation or strengthening
of a dominant position in the following markets:

fungicide markets:

— cereal

fungicides in France, Germany,

the United

Kingdom, Denmark, Sweden and Finland,

— sugar beet
Belgium,

fungicides in France,

Italy, Spain and

— potato fungicides in Sweden,

— fungicides to treat powdery mildew in grapes in
Austria and fungicides to treat botrytis in grapes in
Austria and France;

— herbicides for fruits and nuts in France;

foliar insecticide markets:

— cereals in Belgium, Denmark, France and Germany,

— forage crops in France,

— potatoes in France,

— vegetables in France;

seed treatment markets:

— cereals in Spain;

plant growth regulators:

— ornamentals
France.

in Belgium,

the Netherlands

and

SEEDS

(14) Novartis'

seeds business

transferred to Syngenta.
is
AstraZeneca operates its seeds business via a joint
venture with Cosun. This
joint venture is named
Advanta. This business will not be transferred to
remains with
Syngenta and the shareholding thus
AstraZeneca. However,
continuing
there
relations between the AstraZeneca business that will be
transferred to Syngenta and the Advanta joint venture.
[AstraZeneca business secret — contractual relations]*.

some

are

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Official Journal of the European Union

16.4.2004

(15)

[AstraZeneca business secret — contractual relations]*
This obligation is not applicable to the seeds business of
Novartis
Syngenta.
[AstraZeneca business secret — contractual relations]*.

transferred

that will

be

to

(16)

[AstraZeneca business secret — contractual relations]*.

(17)

existing

contractual

The
relationship between the
Zeneca Group and Advanta creates a link between
Syngenta and Avanta, two seed companies producing
[…]* There are only two other
sugar beet
important competitors for sugar beet seeds, KWS and
Danisco.

seeds.

(18) AstraZeneca will ensure that
secret — contractual
[AstraZeneca business secret — contractual relations]*.

[AstraZeneca business
that

relations]* This means

(19)

The Commission considers that in view of the above
[AstraZeneca business secret — contractual relations]*
the consequences of the merger on the seeds markets
does not need to be further investigated as [AstraZeneca
business secret — contractual relations]* eliminates the
advantage that Syngenta would have received from
[AstraZeneca business secret — contractual relations]*.

(21) As a consequence of these complexities it is usual for a
farmer to use a programme of sprays which will be
adjusted in its intensity and in the types of active
ingredient used depending on local weather conditions
and disease susceptibility of the crop. This choice may
technical experts and
be influenced by distributors,
Member State officials who have a detailed knowledge
of diseases and their epidemiology and of
the best
fungicides
these diseases depending on
predicted outbreaks (protective control) or the presence
of disease in the crop (curative control).

to control

(22)

If there is a range of diseases present and this range is
not controlled by a single active ingredient, a farmer
will either tank-mix a number of single active products,
or use a pre-formulated product containing a mixture of
a number of active substances. Such a pre-formulated
mixture is, in general, some 5 to 15 % cheaper than a
tank-mixture of the active substances. As the disease
spectrum alters throughout the season in response to
changing weather conditions,
the products will be
altered to suit the prevailing disease conditions.

A. RELEVANT PRODUCT MARKETS

(23)

FUNGICIDES

FUNGICIDES AND THEIR USE

The farmer, based on advice from local experts and
recommendations from bodies such as the Fungicide
Resistance Action Committee (FRAC), will also be trying
to prevent the onset of resistance to particular active
ingredients by alternating between and/or combining
classes
active
throughout the season if the same disease is present for
a long period and multiple applications are required. In
some cases, resistance to some active classes will already
be present
in the local disease population and the
farmer will need to use active substances which are still
effective against that particular disease population.

substances

chemical

different

of

(20)

Fungicides are agents used to control plant diseases
caused in particular by fungi. The diseases attacking a
crop, such as a wheat crop, will vary according to the
variety planted in that year, the weather conditions and
the husbandry of
the crop. The crop variety will
determine the susceptibility of the crop to attack by a
range of diseases such as powdery mildew, rust, Septoria
or eyespot. The weather conditions will
influence the
type and the intensity of the attack, for example, a wet
season will encourage diseases such as Septoria and a
dryer season brown rust. Husbandry of a crop can
diminish the risk that certain diseases will develop. For
instance, proper crop rotation or ploughing of the field
reduces the risks of certain diseases.

(24)

The farmer, when deciding how much to spend on
fungicides, will compare the total cost of his fungicide
programme with the expected yield increase and the
resulting increase in revenue, which depends on the
the
price he will receive for his crop.
inherent uncertainty as to disease pressure, the expected
yield increase and the price for the crop, the additional
benefit to be expected of a (more expensive) fungicide
than the
programme has to be considerably higher
fungicide price (premium).

In view of

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OVERVIEW OF MARKET DEFINITIONS

(25)

plants

display

differing

The parties refer to previous decisions (6) where the
Commission has
a breakdown of
considered that
fungicides by type of plant is appropriate, since the
various
partly
overlapping) disease patterns. On this basis, the parties
have identified separate affected product markets for
fungicides for each of cereals, sugar beets, oil seed
crops, forage crops, potatoes, tobacco, fruit and nuts,
investigation
vegetables and ornamentals. The market
the
has generally confirmed that an assessment of
fungicide sector by crop is an appropriate starting point.

(albeit

(26) However,

it also results from the market investigation
that the markets as proposed above could be divided by
a further split of the crop (for instance, cereals split into
rye and triticale (7)) and/or by
wheat, barley, oats,
reference to a particular disease (for instance, the main
diseases for wheat are powdery mildew, rusts, eyespot
and septoria; the main diseases for barley are powdery
mildew,
Rhynchosporum and
Pyrenopora).

eyespot,

rusts,

(27)

(28)

to ‘fruits and nuts' where,

It appears that the only crop where such a further ‘split'
is appropriate
of the crops, as defined by the parties,
relates
the reasons
indicated in recitals 44 to 46, fungicides for each of the
major grape diseases should be considered as separate
product markets.

for

dominant

The parties claim that there is an overall cereal fungicide
claimed and provided
market. Third parties have
information indicating
could be
the market
that
narrower, namely a market for strobilurin-based cereal
fungicides. On such a market, the parties would achieve
a
national
several
strobilurin-based cereal
fungicide markets. However,
since the Commission has come to the conclusion that
on the overall cereal
fungicide markets the parties
would be dominant, the Commission has adopted, for
the purposes of
cereal
this Decision,
fungicide markets as relevant product market.

the overall

position

on

(29)

Finally, although it is technically speaking feasible to
switch production between one fungicide and another,

(6) Decision of 9.8.1999 in Case IV/M.1378 — Hoechst/Rhône-Poulenc
(OJ C 254, 7.9.1999, p. 5); decision of 17.7.1996 in Case IV/M.737
— Ciba-Geigy/Sandoz (OJ L 201, 29.7.1997, p. 1).

(7) A cross between two plants with different numbers of genes, giving

a high yield and with a rich protein content.

there is hardly any supply-side substitutability between
these products. This is due to the existence of patents
and the official registration process for crop protection
products (to be discussed in more detail in recitals 84 to
88). This
crop
remark also holds
protection products discussed in this Decision.

the other

for

STROBILURIN-BASED CEREAL FUNGICIDES

In this
section dealing with formulated products,
‘strobilurins' refer to formulated products containing an
active substance of the strobilurin chemical class. The
formulated product is either a ‘straight' strobilurin, i.e. it
contains only one active substance, namely one of the
strobilurin class (e.g. AstraZeneca's Amistar product,
whose only active substance is azoxystrobin) or a mixed
product,
the
strobilurin class and one or more active substances from
other classes (e.g. BASF Juwel Top product, containing a
mixture
and
epoxiconazole (of the ‘triazole' chemical class (8)) and
fenpropimorph (of the ‘morpholin' chemical class (9)). It
can be noted that in the industry's perception and in the
parties'
these formulated
products are referred to as ‘strobilurins'.

i.e. containing an active substance of

internal market strategy all

kresoxim methyl

(strobilurin)

of

are

against

diseases)

the most

substances

recent
Strobilurin active
fungicide active substances. They are broad
class of
spectrum (active
foliar
several
fungicides (fungicides sprayed on leaves) and can be
used on a wide range of crops worldwide, particularly
wheat, barley, rice, grapevines, banana, top fruit, turf
and a range of vegetables. Strobilurin active substances
are
fungi
by
production. Although
energy
strobilurin active substances can be systemic (10) and/or

active
at
disrupting

low use
the

and control

rates

(30)

(31)

(8) Triazoles are broad spectrum fungicides with utility as foliar sprays
or seed dressings on a wide range of crops worldwide, particularly
wheat, barley, grapevines, banana, top fruit, turf and a range of
vegetables. Triazoles are systemic within the plant and generally
curative. They are active at low use rates and control fungi by
inhibiting the synthesis of ergosterol
(a key component of cell
membranes) via inhibition of
the 14-demethalyse enzyme. This
enzyme is different from the enzymes inhibited by morpholines.
(9) Morpholines (including piperidines) are relatively narrow spectrum
fungicides used primarily as foliar fungicides on wheat and barley
in Europe. They are active at moderate use rates and control fungi
by inhibiting the synthesis of ergosterol. Morpholines are systemic
within the plant and curative. They are also vapour active.

(10) Systemic means movement of a chemical within the plant so that
protection is given to (new) plant parts that were not directly
sprayed.

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vapour active (11), they have limited curative activity. So
far, strobilurins based products have been introduced
within Europe in the cereal (mainly wheat and barley)
crops and for grapes.

barley and an additional spend of GBP 20/ha for spring
barley. These United Kingdom data seem to be valid also
for France (13) and Germany (14). These are the three
main cereal fungicide countries accounting for almost
90 % of total EEA consumption and considerably over
90 % of strobilurin consumption.

(32)

In addition to their broad spectrum disease control
activity, strobilurin-based fungicides (i.e. the formulated
products) are reported to be the only products that
have, when used on cereals, important yield increasing
activities even in the absence of disease. The products
based only on the other
fungicide classes, mainly
(tri)azoles and morpholines, do not have this yield
enhancing activity. It has thus been argued that these
other classes do not easily replace strobilurins. In other
terms, according to third parties, although strobilurins
were (and continue to be) able to replace triazoles and
morpholines in the main cereal markets, the converse is
unlikely to happen. For this reason, third parties have
for
argued that
strobilurin-based fungicides in cereals.

there is a separate product market

(33) With regard to cereals,

there is ample data on the
increased yield resulting from strobilurin usage and,
together with the broad disease spectrum, these benefits
figure widely in the promotion literature for strobilurin
products. Farmers recognise these benefits as they are
prepared to pay a considerable price premium of
between 50 and 150 % for
strobilurin products
compared to non-strobilurin products.

(34) According to a Novartis document of March 2000 (12),
strobilurins have, as a rule of
thumb, resulted, on
average over the last three years, in an increased yield of
1 t/ha compared to triazoles in the United Kingdom.
‘Even when grain filling was
shortened in 1999,
strobilurins still added an extra 0,7 t/ha over triazoles.
With wheat prices predicted to be around GBP 65/t in
the autumn, then 0,7 t is worth GBP 45. With fungicide
programmes based on strobilurin fungicides costing
triazole based
around GBP 20/ha more
programme,
in a healthy return on
investment.' For barley, the other main cereal, the profit
coming from strobilurins is smaller: an extra GBP 32/ha
income for GBP 22/ha extra fungicide spend for winter

than a

results

this

(35)

(36)

(37)

(38)

There are strong indications that, on the basis of the
above data, a hypothetical monopolist of strobilurin-
based cereal fungicides could profitably raise prices by
5 to 10 % in a non-transitory way for these products. A
5 % price increase of a strobilurin programme would
add some GBP 2,5/ha to the cost price. The margin for
the farmer would remain some GBP 22,5/ha for wheat
and GBP 7,5/ha and GBP 9,5/ha for winter and spring
barley respectively. With a 10 % price increase,
the
margin for the farmer would remain GBP 5/ha for
winter barley. The 5 to 10 % price increase would thus
still allow a higher margin for the farmer compared to
the use of a non-strobilurin fungicide programme and
could
the hypothetical monopolist of
strobilurins, be a profitable course of action.

thus,

for

In addition, a competitor has calculated, on the basis of
the parties'
that in a
information on yield increases,
typical three spray programme (see recitals 111 to 113),
the farmer would receive the same net margin from the
use of a strobilurin programme compared to a pure
non-strobilurin
a
monopolist-producer would have increased the prices of
strobilurins with 77 %.

programme

even

if

Observations from the parties

In their reply to the statement of objections (hereinafter
the reply), the parties indicate that strobilurins cannot
constitute a separate market as they need to be mixed
with other products to give satisfactory disease control
in all situations and against all pathogens. Whilst being
factually correct, this argument related to the end-use of
strobilurins is not relevant for product market definition
a
as
the question whether
hypothetical monopolist can profitably increase
its
price.

it does not

address

The parties indicate in the reply that substitution from
strobilurins to triazoles and/or morpholines has taken
place in Germany in the 1999 season where the total
decreased
acreage
German
compared

treated with
1998

strobilurins
also
(see

has
‘the

to

(11) Vapour active means the ability of a chemical to control disease by
means of its volatile component only. The chemical does not fix
itself on the plant, nor does it enter.

(12) ‘A compilation of strobilurin related questions and answers', a

(13) See data in ‘Perspectives agricoles, février 2000, pp. 61 to 65' on
resulting from strobilurin treatment

and net profits

gross
compared to non-strobilurin treatments.

(14) See data

in ‘Welche Fungizidstrategien im Weizen 2000?',

document distributed in the United Kingdom.

published in Top Agrar 1/2000, pp. 52 to 57.

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fungicide market'-section, part
strobilurin-based cereal
of the assessment). As indicated further below, this is an
exceptional feature due to the development of resistance
to BASF's strobilurin product whilst AstraZeneca, the
producer of
the only other strobilurin in 1999, still
faced capacity constraints. Furthermore, it appears from
the
that
strobilurin-based fungicides are still expected to increase
their share of the total cereal fungicide products, to the
detriment of the other chemical classes.

documents

submitted

parties,

the

by

(10 % price

share. However, this is not substantiated. The remaining
margin would still be one based on the
rather
exceptional 1999 circumstances. Therefore, the risk that
the farmer takes, gives him a minimal margin of GBD
5/ha
better weather
increase).
circumstances, this would be more. Therefore, a price
increase of between 5 to 10 % could be a profitable
course of action for a hypothetical monopolist as,
in
view of the minimum margin that the spring barley
farmer would have, the spring barley farmer would not
switch away from strobilurins to such an extent that the
price increase would be unprofitable.

In

(39)

(40)

(41)

In the reply, the parties dispute that strobilurins are able
to significantly increase yield in the absence of diseases
and point out that the yield increase is the result of a
better disease control. However, the parties' promotional
literature refers to the so-called ‘greening effect' resulting
from strobilurin usage. This greening effect,
totally
unrelated to disease control, will give the cereal a longer
period to increase the weight of the grain and thus the
this greening
total yield. Although it
effect as
justify alone the use of
strobilurin-based fungicides (as the additional yield that
can be attributed to the greening effect alone does not
is an important and
offset
unique element of
these fungicides compared to the
other chemical classes.

the strobilurin price),

such does not

is argued that

it

(42)

(43)

a

the

that

parties

hypothetical
dispute
Finally,
monopolist would be in a position to raise prices by
10 % in a non-transitory manner. The parties argue that
if strobilurins cost, as indicated above, between 50 to
150 % more than non-strobilurin treatments, the overall
cereal market should have increased by 7 to 15 % p.a. in
view of the strobilurin penetration rate. However, the
overall market value has declined. The Commission does
relative price
not
that on the basis of
differences
a mathematical
conclusion as to the overall market size can be correctly
made in the absence of information on other variables
such as a diminution of the cereal acreage, changing
weather and other conditions leading to a decreased
need for fungicide treatment, decrease in price of the
non-strobilurin formulations and so on.

and penetration rates,

consider

that

to the
Finally, the parties indicate that, with respect
example supplied by a competitor
the farmer
would achieve the same net margin if the strobilurin
prices were increased with 77 %, no farmer would make
an investment equivalent to the income forecast without
is
taking
acknowledged by
the
if the total additional margin is
example shows that,
strobilurin
only
fungicides is increased with 77 %, a 5 to 10 % price
increase is profitable.

flattened-out when the price of

the Commission. However,

involved. This

account

risks

the

of

Conclusion

The parties claim that there is an overall cereal fungicide
claimed and provided
market. Third parties have
could be
the market
that
information indicating
narrower, namely a market for strobilurin-based cereal
fungicides. There are, for the reasons indicated above,
strong indications that there is a separate market for
strobilurin-based fungicides. If these were to exist, the
parties would achieve a dominant position on several
such national markets. However, since the Commission
has come to the conclusion that on the overall cereal
fungicide markets, the parties would be dominant, the
Commission has adopted,
this
Decision, the overall cereal fungicide market as relevant
product market.

the purposes of

for

literature)

the parties argue that

Furthermore,
the example for
barley described above (on the basis of Novartis'
than the case for
promotional
wheat. This is acknowledged by the Commission. The
parties state in the reply that the benefit to the farmer
would become marginal, but that the same risks as for
wheat would still remain, and that such an increase
would lead to the producer sacrificing his barley market

is weaker

FUNGICIDES FOR POWDERY MILDEW, DOWNY MILDEW
AND BOTRYTIS IN GRAPES

(44)

The parties consider that grape fungicides are part of
the ‘fruits and nuts' market as all these perennial crops
(grapes, pome and stone fruits, citrus, olives and nuts
and berries) have the following common elements:
long-term horizons (high cost to plant, time lag before
first harvest, barriers to exit leading to the crops being
considered as an asset); high value crop (the liability
cost for crop protection producers where their product

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16.4.2004

farmers

has some unexpected negative consequences can being
quite high); most
production
themselves and have direct contacts with end customers
and/or food distribution channels; subsidies level being
quite low; and many agrochemical products being used
are the same.

their

sell

(45)

The Commission considers that grape fungicides have to
be assessed separately as the formulated products used
as well as the active substances included differ to a very
large extent between grapes and the other crops. For
instance, of the six AstraZeneca active substances used
in grapes, only one is also used for pome and stone
fruit and one other for olives. Of the six Novartis active
substances, one is used in both pome and stone fruits,
another in stone fruit and one other for citrus. On the
other hand, there are also active substances used on the
other crops that are not used on grapes. Therefore, the
competitive
substantially between
grapes and the other perennial crops.

conditions differ

concentration is equally likely to create a dominant
position on this market. Lastly,
there are separate
markets for fungicides treating each disease affecting
grapes: powdery mildew, downy mildew and botrytis.

HERBICIDES

The

latter,

herbicides.

(48) Herbicides are agents that control weeds. Usually a first
distinction is made between selective herbicides and
non-selective
non-selective
herbicides, are effective against many types of plant,
including cultivated crops, which they kill if applied to
them. Non-selective herbicides are generally applied to
fields in order to clear them of weeds after the harvest
of one crop and prior to the sowing of the next. Only
AstraZeneca, not Novartis, manufactures non-selective
herbicides. Therefore, with one
exception to be
discussed below (herbicides for vineyards and orchards),
there are no overlaps in this area.

three active substances (dichlofluanid,

(46) Grapes are threatened by a large number of diseases.
The three most important diseases are downy mildew,
powdery mildew and grey mould or botryits. The
parties have stated that fungicides used to treat each of
the diseases are different and specific, with the exception
of
thiphanate
methyl and azoxystrobin) that have an effect on at least
two diseases. However, products containing these active
substances as well as all pre-formulated mixtures that
are registered for more than one disease account only
for about 5 % of all grape fungicides. The parties'
the market
statements have been confirmed by
investigation.
concluded that
can,
fungicides for each disease threatening grapes, and in
for downy mildew, powdery mildew and
particular
botrytis, constitute different product markets.

therefore, be

It

(49)

(50)

Selective herbicides, on the other hand, are designed to
kill only the weeds, and to leave intact the crop to
which they are applied. Clearly, from the viewpoint of
the type of crop on which a selective
the farmer,
herbicide is used,
in
determining product substitutability.

is the most

important

factor

Farmers also consider the particular weed types against
which the crop needs protection at any given time.
With a few exceptions, the active substances contained
in the herbicide product
formulations are mainly
effective against weeds within one of the two principal
grass
categories of weeds: broadleaf weeds
(gramineous) weeds (15).

and

CONCLUSION ON PRODUCT MARKETS FOR FUNGICIDES

(47)

The relevant product market definitions proposed by the
parties, namely a different market by type of plant, is
appropriate. This is the case for the following markets
further dealt with in the
sugar beet
fungicides, vegetable fungicides, and potato fungicides.
strong
The Commission considers
indications
for
is
that
strobilurin-based cereal fungicides. However, if this were
not the case, and if the market were, as the parties have
then the
argued, a market

separate market

for all cereal

assessment:

fungicides,

there

there

that

are

a

both

grasses

populations'

(51) As specific types of plant are mostly affected by mixed
‘weed
and
comprising
broadleaf weeds, there is a need for treatments that kill
both types of weeds. Two options are then available to
the farmer. Either he purchases a number of herbicides
with specific selectivities and mixes these in accordance
with the types of weeds that appear, or he buys a
ready-made product that contains the desired mixture of
active substances for grass control and broadleaf weed
control. In the remainder of this Decision, a herbicide
product that is mainly active against grass weeds will be
called a grass weed herbicide or graminicide. A product

(15) Broadleaf weeds, as the name suggests, are weeds with leafs; grass
weeds are grasses. Within these weed types it is possible to make
an additional distinction between annual weeds and perennial
weeds. Annual weeds are those weeds that complete their life cycle
in one season.
(from seed germination to seed production)
Perennial weeds stay alive for more than one season.

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that is mainly active against broadleaf weeds will be
referred to as a broadleaf herbicide. A product that is
active against both types of weeds
(without being
mainly active against grass weeds or against broadleaf
weeds) will be
referred to as a broad spectrum
herbicide (16) genannt.

(55)

in those decisions discussed
The Commission has
whether further subdivisions should be made for the
purpose of product market definition (for example, on
the basis of the spectrum of control or the timing of
the application). In Case IV/M.737 Ciba Geigy/Sandoz
(Novartis), the Commission did not make such further
in view of the
subdivisions. First,
broad
fluid
between graminicides,
spectrum herbicides and broadleaf herbicides,
it was
impossible to draw up a hard-and-fast product market
a
classification.
breakdown based on the time of application should also
be disregarded since, before sowing at least, pre-sowing,
pre-emergence
are
and post-emergence
substitutable as far as the farmer is concerned.

it considered that,

Furthermore,

considered

herbicides

dividing

lines

that

it

(56)

(57)

For maize herbicides, the approach adopted in IV/M.737
Ciba Geigy/Sandoz (Novartis), i.e. to define the relevant
to be
product markets by type of crop, appears
appropriate
as well.
However, in order to allow for a proper understanding
of the competitive relationships between the different
types of selective herbicides,
the following qualifying
remarks on this product market definition are in order.

current merger

in the

case

it

should be realised that a broadleaf weed
First,
herbicide is no substitute for a graminicide, or vice
versa. When a farmer is faced with harmful grass weeds
in his crop fields, he needs to use herbicides which are
capable of controlling these weeds, i.e. he needs either
graminicides or broad spectrum herbicides; broadleaf
weed herbicides are not active (or, at least, not active
enough) against grass weeds. For that reason, from a
demand perspective, graminicides and broad spectrum
herbicides may be substitutable, but graminicides and
broadleaf herbicides are not (19). The same arguments
for the control of broadleaf
apply, mutatis mutandis,
weeds.
that grass weeds and
In fact,
broadleaf weeds occur together (which is usually the
case), graminicides and broadleaf weed herbicides are
the two
complementary products. As a consequence,
types of product are not in competition with each other.

to the extent

(58)

It
is only through the presence of broad spectrum
herbicides, allowing for both grass weed control and
the two complementary
broadleaf weed control, that
market segments are linked. To see this, it is useful to

(19) As was confirmed by a competitor, adequate efficacy on only one
or two commercially important annual grasses is not sufficient to
create a commercial product. Furthermore, grass weed herbicides
and broadleaf weed herbicides are not substitutable from a supply
side perspective either. This is due to the existence of patents and
the official registration process for crop protection products (to be
in the section on the geographic market
discussed in detail
definition).

the crop:

(52) Another important selection criterion for the farmers is
the time of application of the product, relative to the
emergence of
is common to distinguish
it
between pre-sowing, pre-emergence and post-emergence
herbicides. Pre-sowing herbicides are applied to the soil
immediately before the seed is sown. In pre-emergence
treatment, the herbicides are applied immediately before
germination of
i.e. about eight days after
sowing. Post-emergence herbicides are applied to the
soil or the plants after germination of the crop.

the seed,

(53)

resistance management. Weeds

In addition, herbicidal products differ to the extent that
they are based on different classes of chemical active
substances. This is particularly important in the domain
of
that are treated
frequently with the same types of herbicide tend to
develop resistance against these herbicides over time, by
a process of self-selection. It is therefore important to
counter this tendency of resistance by carefully choosing
the (combinations of) herbicides
to use during the
season and from one season to another. For this reason,
herbicides are marketed by the manufacturer and the
distributor on the basis of both the protective and the
resistance characteristics of the chemicals contained. In
addition,
including the
number of applications and the feasibility of mixing
with other products to achieve a broader
range of
protection, are of importance.

the procedures for treatment,

(54)

The Commission has concluded in previous decisions
that non-selective herbicides and selective herbicides are
not in competition with each other, with the exception
of a few cases (to be discussed below). Furthermore,
selective herbicides which protect distinct types of crop
form part of distinct relevant product markets (see
IV/M.1378 Hoechst/Rhône Poulenc (Aventis), recitals 29
et seq., IV/M.737 Ciba Geigy/Sandoz (Novartis), recitals
109 et seq.; IV/M.392 Hoechst/Schering (17), recitals 16
et seq., and IV/M.354 American Cyanamid/Shell (18),
recitals 11 et seq.).

(16) A herbicide can be broad spectrum either because the active
substance contained in it has itself broad spectrum activity, or
because the product contains both active substances against
grasses and active substances against broadleaf weeds.

(17) Decision of 22.12.1993 (OJ C 9, 13.1.1994).
(18) Decision of 1.10.1993 (OJ C 273, 9.10.1993).

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recall the purpose of using product market definitions.
The objective of defining a market (in both its product
is to identify those actual
and geographic dimension)
involved that are
competitors of
capable of
and of
preventing them from behaving independently of an
effective competitive pressure (20).

the undertakings

constraining

behaviour

their

(62)

(63)

(59) One way to think of a relevant product market is that it
is the smallest set of products for which a company,
should it be the only firm to offer these products,
would find it profitable to impose a small but significant
(5 to 10 %) and permanent price increase.
this
hypothetical company were not to find it profitable to
do this, then the conclusion should be that there is
somehow enough competitive pressure from other
products and that
is
therefore wider than presumed.

the relevant product market

If

(60)

In this case, a natural question to ask would be whether
a hypothetical sole supplier of all herbicides capable of
controlling grasses (i.e. graminicides and,
to a lesser
extent, broad spectrum herbicides) would find it
profitable to increase prices for these products in the
way described above. This is not necessarily the case.
After all, given that broad spectrum herbicides are
competing with broadleaf weed herbicides, an increase
in the price of the first would not only lead to a drop in
stemming from farmers no longer using the
sales
broadspectrum product
for grass control, but also
stemming from farmers that used to buy the product for
broadleaf weed control switching to ‘pure' broadleaf
that many buyers of
herbicides. To the
broadspectrum herbicides buy the product to control
both types of weeds and the value of broadspectrum
products is substantial in comparison with grass weed
herbicides, broadleaf weed herbicides do exercise a
competitive pressure on the prices of broad spectrum
herbicides and, hence, on the prices of graminicides.
This is the chain of substitution effect (21).

extent

is

from their capacity to control broadleaf weeds. A
product market definition based on the type of crop
the
(maize)
therefore warranted, but as
the present merger
assessment of
is
the
it
concerned,
in mind that
in
relationships between the products
competitive
question are
in
from those prevailing
circumstances where all products are truly substitutable.

the impact of
should be kept

different

far as

for
pre-emergence

the possible distinction between
Second,
as
post-emergence
and
pre-sowing,
the following qualifying remarks can be
herbicides,
made. As the three types of herbicides are all used to
treat the same types of weeds and display the same
degree of effectiveness, the farmer has, before sowing at
least, a certain degree of flexibility in choosing the time
application. A product market definition that
of
comprises all three types of herbicides is for this reason
warranted. Furthermore, as time goes by and weed
problems occur in the crop fields, pre-sowing herbicides
are no longer
or
substitutes for post-emergence herbicides. Furthermore,
it
the ‘wait and see what
emerges' approach underlying the use of post-emergence
herbicides in weed control may not always be the best
strategy with regard to resistance management.

even pre-emergence herbicides

is also worth noting that

to

the

provided

The degree of
substitution between pre-emergence
applications and post-emergence applications of maize
herbicides is not always very strong (22).
In general,
according
the
to
information
Commission, both the weed pressure and the weed
diversity in maize are increasing, necessitating more
complex weed control strategies requiring the use of
both pre- and post-emergence products. In the southern
regions, when pre-emergence treatment is not sufficient,
post-emergence treatments are necessary as well. In the
northern regions, even when early post-emergence
treatments are a possibility, the use of pre-emergence
treatments is advised to weaken the weeds and make
them more vulnerable to post-emergence treatments
(especially in areas suffering from grasses). Also in the
decision on the timing of the application, therefore, it
appears that
the relationship between the two main
available products, pre-emergence and post-emergence
herbicides, is not always just one of substitutability, but
also one of complementarity. Nonetheless, the degree of
substitutability appears to be sufficient
to warrant a
broad market definition.

(61)

investigation in the present case has
The market
indicated that broad spectrum herbicides
for maize
effectively derive substantial part of their sales values
both from their capacity to control grass weeds and

(64) Also for cereal herbicides, broad spectrum products
appear to derive substantial part of their sales values

(20) See also: Commission Notice on the definition of the relevant
market for the purposes of Community competition law, para 2
(OJ C 372, 9.12.1997, p. 5).

(21) Commission Notice on the definition of the relevant market for

the purposes of Community competition law, point 57.

(22) There is little pre-sowing herbicide use in maize other than the
use of non-selective herbicides such as glyphosate (e.g. Roundup,
that are used to
Monsanto) or paraquat
prepare fields for planting.

(Gramoxone, Zeneca)

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both from their capacity to control grass weeds and
from their capacity to control broadleaf weeds. Equally,
there appear to be sufficient substitution possibilities
between pre-sowing, pre-emergence and post-emergence
applications. A product market definition based on the
type of crop (cereals) is therefore warranted. None the
less, as far as the assessment of
the
present merger is concerned, it should again be kept in
mind that
the competitive relationships between the
products in question are different from those prevailing
truly
in
substitutable. Similarly,
constitute a
relevant product market.

circumstances where

rice herbicides

the impact of

products

are

all

(65)

that

there is a failure of

seeds and soy beans,

In the markets for herbicides for potatoes, vegetables,
sugar beets, oil
the market
investigation has shown that a refinement of the market
definition is appropriate, as market participants do not
for post-emergence control of grasses
consider
broad spectrum herbicides are good substitutes
for
graminicides (23). The parties have
indicated that,
generally speaking, the five mentioned crops are treated
first in pre-emergence to control all types of weeds (24).
The pre-emergence treatment provides weed control
until the time of crop emergence when the crop canopy
closes over
the inter-rows (particularly the case for
potatoes and sugar beet). Later sprays are, however,
the
often required, notably if
pre-emergence treatment
(dry soil conditions, heavy
weed pressure, wrong dose rates or choice of herbicide)
to control a grass weed problem. In this latter case, a
post-emergence graminicide treatment has to be applied,
because broad spectrum herbicides do not provide
enough control. That
the graminicide products have
specific properties which distinguish them from broad
spectrum herbicides
that,
follows
according to the parties, they are the only herbicides
which can control the grass weeds Agrostis stolonifera,
spp.
Arrhenatherum elatius, Bromus
These facts show that the competitive pressure on the
products within
post-emergence
graminicides come from other products in the group.
The conclusion is that within the herbicides markets for
potatoes, vegetables, sugar beets, oil seeds and soybeans,
separate markets exist for post-emergence graminicides.

sterilis and Phalaris

from the

group

fact

the

of

(23) However,

least, do consider

farmers, before sowing at

the
post-emergence herbicides to be substitutes for the pre-emergence
herbicides. The prices of the latter are therefore constrained by the
prices of the former. Furthermore,
in pre-emergence, there are
broadspectrum products that constitute a substantial link between
the broadleaf segment and the grass segment. The consequences of
the
than post-emergence
graminicides are therefore assessed on the basis of herbicides by
type of crop.

concentration for herbicides other

(24) There is, however, some variation both between the four crops

and between countries.

(66) Only

not

AstraZeneca,

Novartis, manufactures
non-selective herbicides. Therefore, where selective and
non-selective herbicides cannot both be used on crops,
there are no overlaps in this area. The parties claim that
there is one domain in which selective herbicides and
non-selective herbicides are competing with each other
and that
is in herbicides for use in vineyards and
orchards (25). The parties have argued that non-selective
herbicides have to be included in this market as they
can be used between the rows of vines without killing
them. Whereas this view has been generally confirmed,
it has been remarked that
just around the vines,
selective herbicides have to be used. A competitor has
pointed at
than selective and
non-selective herbicides being substitutable, they are in
they are
always used in
complementary as
fact
the
this
to
combination. According
competitor,
non-selective
glyphosate,
paraquat,
(e.g.
sulphosate) serves to kill all weeds existing at the time
of application and the selective herbicide (e.g. a residual
herbicide,
to kill weeds
germinating after application. The Commission has
addressed these opposing views and has concluded that,
for the purpose of the present case, herbicides for use in
vineyards and orchards (or ‘herbicides for fruits and
nuts', the term used by the parties) constitute a relevant
product market.

such as atrazine),

herbicide

the fact

serves

rather

that,

(67) A final word ought be devoted to the developments
taking place in the domain of genetic modification of
crops. The most remarkable technological innovation in
the crop protection business in recent years has been
the development of herbicide-tolerant crops. These are
crops, e.g. in maize, that have been genetically modified
to be resistant to non-selective herbicides (previously so
considered). This means that non-selective herbicides,
which are by themselves very powerful herbicides, can
be safely applied to them. In principle, therefore, they
could be a clear challenge to conventional selective
herbicides. However, because of continuing opposition
to these innovations in many European societies, the
parties do not believe that these types of crops can be
introduced before 2005. For the time frame relevant to

(25) In the context of herbicides for vineyards and orchards, the parties
have defined herbicides which have residual or residual + foliar
‘selective' and those with only foliar activity as
activity as
‘non-selective'. A herbicide has residual activity if it remains active
for, normally, a period of one month or longer. A herbicide that
acts via the foliage usually only has activity for two to three days.
Novartis actually sells in France some foliar herbicides for use in
these are not sold as non-selective
fruits and nuts; however,
herbicides in the traditional sense.

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the assessment of the current merger case, the advent of
genetically modified crops has no bearing on the
prevailing product market definitions for herbicides.

Conclusion on product market definitions for
herbicides

for the purpose of

it
the present case,

In view of the role of broad spectrum products in maize
herbicides and the sufficient degree of substitutability
is
between pre and post-emergence applications,
appropriate,
to
consider the market for (selective) maize herbicides as a
relevant product market. The same holds
the
in
markets for cereal and rice herbicides. However,
addition to separate relevant markets for herbicides in
potatoes, vegetables, sugar beets, soy bean and oil seeds,
there
for
post-emergence graminicides in these crops.

relevant markets

separate

exist

also

for

INSECTICIDES

Insecticides are products used to control
insects that
damage cultivated plants. The Commission has found in
previous decisions (see IV/M.737 Ciba Geigy/Sandoz
(Novartis), recitals 116 et seq.)
that a breakdown of
insecticides by type of plant rather than by insects is
appropriate in general. The main reason is that there is
only one plant-specific insect that affects a major crop,
namely the cornborer affecting maize. For all other
main crops a variety of
the plant.
Therefore, most insecticides combat a range of insects.

insects

infests

(68)

(69)

(70) However,

in Hoechst/Rhône-Poulenc (recital 36),

the
Commission indicated that a further breakdown seems
to be appropriate with regard to crops such as potatoes
and sugar beets. Some of the potato or beet insecticides
solely treat nematodes and soil insects within the soil
and are applied by bringing them on or into the soil.
These products are called nematicides. Other products
are designed to protect potato or beet plants against lice
and other foliar insects and are applied to the leaves by
spraying. These products are called foliar insecticides.
The two different kinds of products are based on
different active substances, are applied in different ways
and are not substitutable for each other.

this describes
thereby reduce crop quality. However,
rather the way of feeding than the mode of action of
insecticides. In any event, the question of whether such
a breakdown is appropriate can be left open in this
case,
the
it would not materially
competitive assessment.

change

since

(72)

It is also conceivable to further separate the market for
insecticides along the lines of chemical classes. The
following table shows the most
important chemical
classes used as insecticides in Europe:

(%)

Chemical class

Market Share

Organo-Phosphates

Pyrethroids

Carbamates

Nitromethylenes

Nicotinoids

Organochlorines

Benzylureas

Others

28

20

18

< 10

5

3

3

15

(73) As can be seen from the above table, organophosphates
(OPs), pyrethroids and carbamates are the three main
chemical classes of insecticides. It has been argued by
that pyrethroids constitute a separate
third parties
submarket within the insecticides because of their very
broad spectrum of activity, high speed of action and
advantages for environmental stewardship, since the
compound is a synthesised natural product. Pyrethrum
is a toxic hydrocarbon of the kerosene type which is
derived by extraction of
chrysanthemum flowers.
However, for a given crop category, the farmer selects
insecticides on the basis of the spectrum of pests which
need to be combatted. For some crops like cereals or
forage crops pyrethroids are the main class used to
combat insects. Therefore, the breakdown of markets by
type of plant
a breakdown of
already
insecticides by spectrum.

contains

(74)

Therefore, for the purpose of this Decision, the relevant
market for insecticides is defined by type of crop and
subdivided into foliar and soil insecticides.

SEED TREATMENT

(71) Another differentiation could be envisaged between
sucking and chewing insects. Chewing pests such as
caterpillars damage crops by eating them up, whereas
sucking pests such as aphids transmit viral diseases and

(75)

Seed treatment means the treatment (dressing) of seeds
with plant protection products in order to protect them
mainly against seed/soil borne diseases and soil insects.

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(76)

(recitals

118-121),

Ciba-Geigy/Sandoz

the
In
Commission has concluded that there are no separate
markets for seed treatment, since treated seed is, from
the farmer's point of view, ultimately substitutable for
fungicides and insecticides applied to the
soil or
sprayed. Seed treatment is considered to be a particular
type of application of insecticides and fungicides.

(77) However, this conclusion has not been confirmed by the
current market investigation for seed treatment products
for cereals in Spain, the only activity that AstraZeneca
has with regard to seed treatment. The diseases and the
insects that are targeted with seed treatment products
differ from those dealt with by spraying programmes. In
Spain,
these diseases and insects are treated with
different active substances. Furthermore, products used
for seed treatment must be registered separately and be
coloured with a dye. There is, therefore, no supply-side
substitution
an
insecticide or fungicide (as defined above) and those
registered for seed treatment. Also the customers for
for
products
seed
differ
insecticides and fungicides.
Insecticides and fungicides
are finally purchased by the farmer. A clear majority of
seed treatment products is sold to seed producers and
customers own dressing plants
propagators. These
seeds with seed treatment
the
they dress
where
products. Therefore, seed treatment products for cereals
in Spain are a distinct product market.

from those

treatment

registered

products

between

as

PLANT GROWTH REGULATORS

(78)

Plant growth regulators are agrochemicals that inhibit,
stimulate or modify plant growth and development.
They have different modes of action, depending on their
chemical class. One of their most important effects is
crops. As
the
and
indicated
growth
confirmed
regulators
form separate
relevant markets

inhibition of vegetative growth of

individual crop types

in Ciba-Geigy/Sandoz

(recital 123)

investigation,

the market

by
for

B. RELEVANT GEOGRAPHIC MARKETS

(79)

that

The parties submit
the markets for formulated
products and growth regulators are at least EEA-wide
since they maintain that conditions of competition are
not appreciably different across the EEA. As support for
their position the parties argue that numerous large,
international manufacturers are present throughout the
world; that the distribution channel is characterised by

their

broad
and

in
retailers

standards
food
purchasing

that
large distributors that have little brand loyalty;
farmers are price conscious; that processors and retailers
crop
European
are
setting
are
that major
management;
increasing
power.
international
Furthermore, the parties argue that national patents and
trademarks do not constitute a barrier to EEA-wide
distribution and that Council Directive 91/414/EEC of
15 July 1991 concerning the placing of plant protection
products on the market (26), as
last amended by
Commission Directive 99/80/EC (27) has harmonised
national regulations laying down requirements for the
registration of crop protection products and that the
corresponding national
registration procedures have
largely been harmonised. The parties also maintain that
the marketing of crop protection products has been
largely harmonised and that it is therefore easy to resort
to parallel imports. According to the parties, transport
costs are low, corresponding to 1 % of
total costs.
there has been a
claim that
Finally,
noticeable trend towards convergence of prices between
Member States, and that this convergence is facilitated
by
stability of
cross-exchange rates created by the launch of the euro.

transparency

the parties

the price

and

the

(Ciba-Geigy/Sandoz,

The Commission has in its previous decisions in this
sector
128;
Hoechst/Rhône-Poulenc, recital 48) left open the precise
formulated
the geographic markets for
definition of
products and growth regulators in the agrochemical
sector.

point

Several competitors agree with the parties that
the
geographic markets for formulated products and growth
regulators are wider than national. Some competitors
argue for European-wide markets while others argue
that markets may usually be defined by certain climatic
regions rather than by national borders. Competitors
arguing for European-wide markets refer to the effects
of Directive 91/414/EEC. However, others emphasise
that formulated products still have to be registered in
Member States before they can be marketed. The fact
that products are, in most cases, covered by EEA-wide
patent protection was mentioned as an element arguing
in favour of a finding that markets are EEA-wide. Some
competitors do not
transportation costs
constitute a hurdle to trade although others say that
they may be relevant. Furthermore, some competitors
argue that cross border sales are growing and that
prices
that
cross-border shipments do occur, another competitor
points to registration requirements, different languages,
etc., rendering the cross-national marketing of products
difficult.

converging. While

acknowledging

that

see

are

(80)

(81)

(26) OJ L 230, 19.8.1991, p. 1.
(27) OJ L 210, 10.8.1999, p. 13.

L 110/14

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Official Journal of the European Union

16.4.2004

(82) However,

a

customers,

large number of

farmers'
associations and crop consultants have brought forward
arguments that point to the conclusion that markets are
still national. Crop protection products must still be
registered in a Member State before they may be
marketed. Distribution is organised on a national basis,
with suppliers having in most cases national
sales
organisations or distributing via the sales organisation of
another manufacturer operating in the relevant Member
State. Parallel-imported products are seen as difficult to
reasons because brand
commercialise, among other
names and formulations may vary between Member
States, because registration fees may be high, and
because it may take a long time to register the products.

(83)

The market investigation has shown that the markets for
formulated products and growth regulators must be
analysed at a national level. The various arguments for
this conclusion are given below.

REGISTRATION OF PRODUCTS

(84)

the Member

States of different

The Commission notes
that Directive 91/414/EEC
harmonises national regulations. The Directive, and later
amendments and implementing directives, establishes a
positive Community list of active substances whose use
can be deemed in advance to be acceptable for human
or animal health or the environment (the Annex I list).
It furthermore establishes a system for the authorisation
by
formulations
containing the active substances in the positive list, in
accordance with the requirements laid down in the
Directive and according to uniform principles;
the
mutual recognition of acceptance by the Member States,
provided that
and
the plant health,
environmental conditions are comparable in the regions
concerned;
the
requirements on information, protection of information
and
concerning
harmonised
labelling and packaging; harmonised rules concerning
the development of plant protection products; and
provisions on the exchange of
information between
Member States and the Commission.

confidentiality;

harmonised

agricultural

concerning

rules

rules

less

(85) However, the full effects of the Directive are still not
being felt. For
than 10 active
the moment,
ingredients have been registered at European level
(Annex
active
substances on the market are not yet covered by the
Community-wide system. Over time, companies will,
however, have to re-register all the active ingredients
to continue selling. The continuing
that

approximately 800 other

they want

I). The

(86)

(87)

(88)

process of screening the existing active substances for
inclusion in Annex I requires that
large amounts of
information have to be produced by the companies. The
full
the
existing active ingredients will have to be produced by
May 2003.

information packages

the majority of

for

The harmonisation of national registration procedures
referred to by the parties concerns active ingredients
included in Annex I. Since the number of active
ingredients already in Annex I is very limited, clearly the
national registration systems are still the important step
for companies.

It should also be noted that a product has to be
registered by the national authorities before farmers in
that Member State can use the product. Furthermore,
even if the exact same product is available in another
Member State, farmers are typically not allowed to buy
a product in another Member State and use it in their
home country without asking permission by their
national authorities.

Finally, it is the producers that decide which products to
register in which countries. Often, products which are
available in one Member State cannot be bought in the
next, or similar products based on the same active
ingredients may be introduced in different formulations
in different Member States. Hence, even when all active
ingredients
the
harmonisation of registration procedures envisaged by
crop protection
Directive 91/414/EEC is
companies will still have the opportunity to segment the
European market. A concrete investigation of the way in
which competition works will
still be
necessary at that point.

in Annex

complete,

therefore

entered

and

are

I

PARALLEL IMPORTS

(89)

The rules for parallel
imports vary from country to
country. Some countries have only recently introduced
legislation (France) while others still have no legislation
in place (Finland and Greece).
In some countries a
separate permit is requested for each batch (Belgium)
import registration lasts as
while for others a parallel
long as the original product is registered (Denmark). In

16.4.2004

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Official Journal of the European Union

L 110/15

most countries the product has to be exactly the same
as the original registered products, while in others small
differences are allowed. According to the parties, the
average time from request to decision varies from two
weeks (Belgium) to three to five months (Italy) while the
costs vary from zero (Denmark) to 2 000 EUR (Austria).

target, the resulting products and the dosage with which
the products would be used. His decision will depend on
the seed variety,
the climatic conditions,
previous disease occurrence and other relevant factors.
The outcome of these decisions is closely linked to the
intensity of cereal farming, with yields ranging from 6
t/ha or less up to 10 t/ha or more.

the soil,

(90) Generally, the market investigation has shown that there
are still many practical difficulties for parallel importers,
both in getting import permits and in finding reliable
and stable sources of supply. In particular producers can
and do establish systems
they can trace
Europe-wide the final destination of their product. The
overall level of parallel imports is therefore quite low,
and the wide price differences for identical products
between the various Member States (see recital 98) show
clearly that parallel
imports do not effectively restrain
producers from segmenting the European market for
pricing purposes.

so that

DISTRIBUTION

(91)

three distributors

in 1999 created a

Crop protection distribution systems
vary widely
between Member States. In Denmark, cooperatives and
smaller dealers have formed buying groups. The three
largest distributors, which operate in all of Denmark,
represented, according to AstraZeneca, [90 to 100]* %
(respectively [30 to 40]* %, [30 to 40]* % and [20 to
30]* %) of total sales in 1999. Furthermore, one of
these
joint
purchasing company with a major Swedish distributor.
Italy is at the other end of the spectrum with [more
than 5 000]* distributors (according to AstraZeneca), no
distributor operating on a national
the largest
distributor having [0 to 5]* % of total sales and the top
10 distributors together around [10 to 20]* %. France,
Greece, Spain and Portugal also have quite fragmented
distribution systems, Austria, Finland, Norway and
Sweden have quite concentrated systems while Belgium,
the Netherlands and the United
Germany,
Kingdom are somewhere in between. The distribution
systems also vary with respect
to that part of crop
protection sales that goes through cooperatives, from [0
to 5]* % in the United Kingdom and [5 to 10]* % in
Belgium to [60 to 70]* % in France and [60 to 70]* %
in Norway.

Ireland,

level,

(93)

importance of disease

The
varies between areas.
Powdery mildew, septoria leaf and glume blotch, and
frequently in all EEA
fusarium head blight occur
countries. Eyespot occurs
frequently in the United
Kingdom,
Ireland, northern Germany and northern
France, yellow rust in the same countries and Belgium,
while septoria leaf spot or blotch occurs frequently in
the United Kingdom, Ireland, Germany, France, Belgium,
the Netherlands, Scandinavia and Austria. On the other
hand, brown rust occurs frequently in France, southern
Germany,
Italy, Spain, the southern United Kingdom,
and Belgium.

in different Member States.

(94) Another way to approach this is to look at the most
important diseases
In
Denmark, Germany, the Netherlands, Norway, Sweden
and the United Kingdom the two most
important
diseases are septoria and powdery mildew. In France they
are septoria and rust, in Italy rust and fusarium and in
Spain rust and powdery mildew. Products which are
particularly strong against the most important diseases
that occur in a Member State will obviously have a
strong competitive position in that country.

(95)

The number of spray programmes also varies between
Member States. In particular, the number of fungicide
treatments is related to the intensity of cereal farming,
ranging from zero in the whole of Greece up to three
(or four) sprays for wheat and two for barley in the
most productive areas such as northern France,
the
southern United Kingdom, Germany and Belgium.

VARIATIONS IN USE

(92)

Climatic conditions have an influence both on which
crops are grown and on the levels of crop protection
which are needed in the various Member States. A good
example of this is cereal fungicides. A farmer will decide
on the optimal number of treatments, the diseases o

impact of

independent

research institutes,

(96) A further reason for the existence of national variations
technical product
in use is the significant
evaluations by
as
indicated by the parties as an argument for national
markets for sugarbeet seeds. These institutes publish
crop protection
recommendations
products, which are widely consulted by both farmers
and crop consultants. These
research
institutes are typically national and a recommendation
by a given institute will therefore primarily influence
use in one Member State only.

the use of

independent

for

L 110/16

EN

Official Journal of the European Union

16.4.2004

DIFFERENCES IN MARKET SHARES

is

climatic

conditions,

in the undertakings' market

the large variation in market

(97) Another indication that the geographic markets are not
EEA-wide
shares
between the different Member States that not only the
parties but also their competitors have in many product
markets. The parties admit in the notification that there
are differences
shares
between Member States but do not
regard this as
evidence
supporting a national market definition.
According to the parties, these differences can partly be
attributed to the different product requirements created
by
Europe. The
Commission finds that this is an argument in favour of
narrower geographic market definitions than the (at
least) EEA-wide definition advocated by the parties.
Furthermore, it should be noted that often the identity
of the participants in the various national markets is not
the companies
the same. As was explained above,
their
decide in which countries
to
the companies decide not
products. Sometimes
in all countries, and typically
register
the product
companies will
products
simultaneously in all the countries where they plan to
register their products. There may be a lag of several
years between the first and the last registration of a
product.

to try to register

introduce

across

their

etc.,

not

PRICE DIFFERENCES

(98)

The market investigation has shown that prices can vary
substantially between Member States. The parties'
internal documents refer on some occasions to the need
it also appears
to have price convergence; however,
that
from their
there are still
internal documents
important price differences (28).
In the notification
AstraZeneca gave examples of the variations in price
per kg active ingredient
in the EU and Norway for
several of its most important active ingredients. In 1999
the ratio of the highest price to the lowest price was
[>1]* for Azoxystrobin, [>1]* for chlorothalonil, [>1]*
for
for
for
hexaconazole
for
fluazifop-p-butyl. The parties argue that some of these
differences are due to different pack sizes, smaller pack
sizes having a higher price per kg active ingredient.
However, AstraZeneca has also provided pricing on a
brand-specific basis. For azoxystrobin, the two brand
names for which prices are given, are Amistar and
Quadris. For Amistar
the ratio highest/lowest price
in 1999 was [>1]*, for Quadris [>1]*. For
differential

flutriafol,
and

[>1]*
[>1]*

fluazinam,

diquat,

[>1]*

[>1]*

for

(28) [Novartis business secret — price differentials]*.

the active ingredient hexaconazole, the ratio was [>1]*
for the brand name Anvil, and [>1]* for the brand
name Planete (where, however, figures are given for two
countries only). Some examples of the same ratio for
Novartis are [>1]* for the product Topik EC240, [>1]*
the
the product Moddus 250ME and [>1]* for
for
product Mavrik 240.

CONCLUSION

(99)

this case the
For the purpose of
markets for formulated products and growth regulators
must be considered national in scope.

the assessment of

C. ASSESSMENT

C.1 FUNGICIDES

CEREAL FUNGICIDES

Disease control in cereals

for some 87 % of

(100) The cereals market consists of crops such as wheat,
barley, oats, rye, triticale and a number of other crops
such as mixed grain, sorghum, buckwheat, millet and
others. Wheat and barley are the two most important
crops and they account
the total
cereals cultivated area in the EU and for some 95 % of
cereal
fungicide consumption. The other crops are
grown mostly in Nordic countries and Portugal, where
they are used for direct farm consumption as cattle feed.
The use of
fungicides in these other crops is lower
because the crops are grown on a fairly extensive basis
and on less productive soils. Only in Sweden, Germany
and Finland are these crops estimated to account for
more than 10 % of fungicide consumption. These crops
will not be dealt with further below, as wheat and
barley are considered to be representative for all cereals,
even for Sweden, Germany and Finland,
since the
diseases and the fungicides are the same for these crops
as for wheat and barley. In addition, the availability of
market data for these other crops is limited.

(101) The main

wheat

diseases

eyespot
in
(Pseudocercosporella
powdery mildew
herpotrichoides),
(Erisiphe graminis), brown rust (Puccinia recondita, Puccinia
hordei), yellow rust (Puccinia striiformis), Septoria leaf spot
or blotch (Septoria tritici), Septoria leaf and glume blotch

are

16.4.2004

EN

Official Journal of the European Union

L 110/17

(Septoria nodorum) and Fusuarium head blight (Fusarium
culmorum, F graminearum, F avenaceum, Microdochium
nivale). The main diseases in barley are eyespot, powdery
mildew, brown rust (also wheat diseases), net blotch
(Drechslera teres) and leaf blotch or scald (Rhynchosporium
secalis).

(106) Brown rust develops in warm weather (15 to 22 °C).
Dry and windy conditions favour the spread of
the
disease.
It occurs more predictably in the warmer
climates of southern Europe, and more rarely in cooler
northern Europe. It is less important in barley than in
wheat. It reduces the number and size of the grain and
can give yield decreases of some 10 to 15 % with
sometimes up to 50 %.

(102) These diseases occur under different circumstances
relating to climatic optimum and sensitivity to the seed
variety. Their presence and importance differs to some
extent in the different Member States. What they have
in common is that they all can lead to important yield
decreases when they occur
in the crop. A rough
subdivision can be made between diseases attacking the
stem base, the leaves and the ear of the plant. The
relevance of this distinction is that this influences the
optimal date for treating the crop, and hence in which
spray (if multiple sprays are made) a fungicide targeted
at the specific disease is best used (see section ‘spray
programmes' below).

(103) Eyespot is a disease attacking the stem base of the plant.
Its climatic optimum for development is cold and wet
weather. It therefore does not occur in southern Europe,
but occurs frequently in the United Kingdom, Ireland,
northern Germany and northern France. It also occurs
in the rest of Germany and France, as well as in Austria
and Scandinavia. The disease has an impact on the ear
filling (i.e. weight of grain on the plant), causes
shrivelled grain and can lead to the crop falling down
before harvesting (lodging). Yield decreases can be in the
range of 5 to 20 %.

(104) The group of fusarium pathogens can cause stem or ear
diseases. They are difficult to predict, but wetness is a
guide to potential infection (more important on the ear
in wet years and on stem bases in warm, dry soils). The
disease has become more prevalent in recent years and
can cause lodging of the crop (stem base related) or can
reduce
toxin
production. It occurs in all countries.

the grain and cause

the quality of

high

relative

(105) The leaf diseases on wheat and barley are powdery
mildew and brown rust. Powdery mildew is a leaf and
ear disease occurring with warm weather (12 to 20 °C)
and
by
humidity.
It
temperatures
frequently occurs in all EEA countries. The influence of
the seed variety on the disease occurrence is high. It
strikes at the green leaf area and the grain filling with
yield decreases of some 10 to 15 %, and sometimes up
to 40 %.

above 25 °C and by heavy rain.

inhibited

is

It

(107) The leaf diseases that only occur on wheat are the
septorias and yellow rust. Net blotch and scald are
barley leaf diseases, but they can also infect the ear.

(108) Septoria tritici

is currently the most important wheat
disease in Europe. The further north, the more common
it becomes. Its development is favoured by 15 to 20 °C
and rainfall to spread infection. Its cultural optimum is
linked to early sowing and high nitrogen fertilisation.
Septoria nodorum is favoured by warmer conditions than
tritici (18 to 25 °C) and also infects the ear. It is now
less common and less predictable than septoria leaf spot.

(109) Yellow rust occurs primarily on the leaf, but may also
infect the ear. It is favoured by 10 to 15 °C with dry,
windy days for spore dispersal. It occurs more in the
United Kingdom and Ireland and the influence of the
seed variety seed on the prevalence of the disease is
very high.

(110) The barley diseases net blotch and scald are both
favoured by cool and wet conditions. For both,
the
influence of
the seed variety is high. Especially net
blotch can cause important yield decreases (10 to 40 %).
Both diseases frequently occur in the United Kingdom,
Ireland, northern Germany, northern France, Belgium
and Scandinavia. Net blotch also occurs frequently in
Austria and scald frequently in the Netherlands.

Spray programmes

(111) The farmer, advised by his distributor, independent crop
consultant or technical institute, decides on the optimal
number of treatments and the diseases to target. This
the
decision is based on the seed variety,

the soil,

L 110/18

EN

Official Journal of the European Union

16.4.2004

climatic conditions, previous disease occurrence and
other relevant factors. After this decision is made, the
spray programme are
products
in his
determined as well as
the dosage with which the
products should be used.

to include

(112) The outcome of

these decisions differs substantially
among the different Member States and is closely linked
to the intensity of cereal farming with yields from six
tons/ha or less up to 10 t/ha or more. Related to the
intensity is the number of fungicide treatments, ranging
from none, as in the whole of Greece, up to three (or
four) sprays for wheat and two for barley in the most
productive areas. Expressed as expenditure on cereal
fungicides per hectare,
this goes from EUR 0/ha in
Greece up to EUR 68/ha in the Benelux countries and
Ireland.

(113)

In a triple-treatment programme for wheat, the stem
base treatment (T1) would target eyespot and fusarium,
the leaf treatment (T2) powdery mildew, septoria and
yellow and brown rust, whereas the ear treatment (T3)
In some
would be aimed at
circumstances, a very early spray (T0) is done to target
eyespot. In a typical double-treatment programme for
barley,
treatment would target
eyespot, rhynchosporium and powdery mildew, the T2
leaf/ear treatment net blotch, scald and rust.

the T1 stem and leaf

fusarium and septoria.

cure the disease and the duration of the protection (for
curative substances this relates to the maximum period
during which the disease is already present in the crop
but can still be cured by the fungicide; for protective
substances
to the maximum period of
remaining protection). Other factors that are taken into
account are the potential of the product to be mixed by
the farmer with other products containing other active
substances in his spraying tank.

relates

this

of

for

the

chemical

this reason,

(115) The active substances currently used as cereal fungicides
belong mainly to three different chemical classes. The
morpholines are the oldest of these classes, introduced
in 1969, and mainly active against powdery mildew
and,
still part of modern mixture
products. They have some curative effect. In 1976 active
substances
class were
triazole
introduced. There are around 15 active substances of
this class currently on the market, with some being
introduced only in recent years. Their main strength is
with septoria,
recent
chemical class,
introduced in 1996
combine a broad spectrum (powdery mildew, rusts,
septoria) with yield increase. In addition to these three
classes, there are some other active substances, the most
important being cyprodinil, the ‘gold standard' to treat
eyespot, and quinoxyfen, the most effective substance
against powdery mildew. The following table classifies
most active substances according to their efficacy using
the following classification (source: ITCF/parties):

rusts and fusarium. The most

the strobilurins,

Technical strength of the active substances used for
cereal crops

(114) Each active substance has a typical activity vis-à-vis a
particular disease in a cereal crop, and this will
influence the farmer's choice. The activity of a substance
relates to the efficacy with which it can prevent and/or

XXXX

XXX

XX
X
0

Excellent efficacy — the best active substance
for this disease
Good efficacy-important active substance for
controlling this disease
Some efficacy
Side effect only
No useful efficacy on this disease.

16.4.2004

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Official Journal of the European Union

L 110/19

Active Ingredient (subdivided by
chemical class)

Powdery
mildew

Rusts

Septoria

Eyespot

Fus. Nivale

Fus.Roseum

Rhynchos-
porium

Pyrenophora

Azoxystrobin

Picoxystrobin

Trifloxystrobin

Kresoxim-methyl Basf

BAS500 BASF

Famoxadone Dupont

Fenpropidin

Fenpropimorph

Tridemorph Basf

Spiroxamine Bayer

Cyproconazole

Difenoconazole

Flutriafol

Hexaconazole

Propiconazole

Epoxiconazole Basf

Bromuconazole Aventis

Fluquinconazole Aventis

Prochloraz Aventis

Tebuconazole Bayer

Triadimefon Bayer

Triadimenol Bayer

Flusilazole Dupont

Metconazole Cyanamid

Tetraconazole Aventis

Carbendazim Dupont

Benomyl Dupont

Cyprodinil

Chlorothalonil

Anilazine Bayer

Pyrazophos Aventis

Iprodione Aventis

Quinoxyfen Dow

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L 110/20

EN

Official Journal of the European Union

(116) The active substances shown in bold in the above table
are the parties' substances. The first group are the
strobilurins
together with famoxadone, which is
technically not a strobilurin (and also lacks the greening
effect found with strobilurins), but which because it has
the same mode of action as strobilurins, is governed by
the same resistance-management
rules. The second
group is the morpholines and the third group is the
triazoles.

16.4.2004

(%)

YEAR

1997

1998

1999

All Strobilurins
% market share of
total cereals

[10 to 20]*

[30 to 40]*

[40 to 50]*

% market share in
strobilurins

1997

1998

1999

BASF

[60 to 70]*

[50 to 60]*

[50 to 60]*

(%)

Strobilurin-based cereal fungicides

AstraZeneca

[20 to 30]*

[40 to 50]*

[40 to 50]*

(117) The strobilurin-based products that are on the market
today contain one of three strobilurin active substances.
These are BASF's kresoxim methyl
(hereafter KM),
AstraZeneca's azoxystrobin and Novartis' trifloxystrobin.
The first
two were introduced in 1996 and 1997.
Trifloxystrobin has received registration in the relatively
small Norwegian and Belgian markets in 1999 and in
March 2000 it obtained registration in the United
Kingdom, a major cereal market. It is expected to be
registered in France and Germany in 2000.

(118) BASF has introduced KM only in co-formulations with
one or two of its active ingredients belonging to other
chemical classes. It has three different formulations: one
consisting of KM and its triazole epoxiconazole; one
with the morpholin fenpropimorph; and one consisting
of the three active substances.

fungicide consumption in the EEA.

(122) The abovementioned countries account for over 90 % of
total cereal
is
evident from these figures that BASF's overall share has
decreased from [60 to 70]* % in 1997 to [50 to 60]*
% in 1999. AstraZeneca has increased its share from
[20 to 30]* % to [40 to 50]* %.

It

(123) As France, Germany and the United Kingdom account
for considerably over 90 % of strobilurin-based cereal
fungicide use, these will be discussed in more detail
below. An overview will also be given for the Nordic
markets.

Strobilurin-based cereal fungicides in France

(119) AstraZeneca sells azoxystrobin mainly as a straight
product under the brand name Amistar. It also has a
mixture product with its triazole flutriafol (Amistar Pro)
and is introducing in France a mixture with its other
triazole
1999,
(Amistar
AstraZeneca had capacity constraints on its strobilurin
products, so that the sales potential of the products
could not be fully exploited.

hexaconzole

Ter). Until

(124) France is by far the largest cereal fungicide market with
total strobilurin sales accounting for almost EUR 200
million in 1999, some [40 to 50]* % of total cereal
fungicide sales in France. The strobilurin sales were
and AstraZeneca.
evenly
Compared to 1998, AstraZeneca increased its sales with
[…]* whereas BASF's sales [BASF business secret]*.

between

shared

BASF

(120) Novartis will launch trifloxystrobin as a straight product
(Twist/Flint), but also in mixtures with its strongest
triazoles,
and
propiconazole (Rombus/Stratego).

(Sphere/Dexter)

cyproconazole

(121) The introduction of strobilurin-based cereal fungicides
has had an enormous impact on the cereal fungicide
spectacular growth and the relative
markets. Their
weight of
can be
existing active
the
illustrated by the following table, containing the market
share of strobilurin-based products in cereals in France,
Germany, United Kingdom, Denmark, Belgium and the
Netherlands:

ingredients

three-quarters of
In addition,

(125) The introduction of the strobilurin-based products in
1997 had an important impact on the French market.
After two campaigns (1997 to 1998 and 1998 to 1999),
farmers
these
some
products.
independent
the
technical institute ITCF recommends strobilurins for all
the different regional programmes as it is economically
viable for the farmer to include the maximum number
of strobilurins in his spraying programme (29) (in a one
spray programme, a strobilurin should be included; in a

already use

influential

(29) ITCF recommendations in ‘Perspective agricoles,

février 2000',

p. 61 onwards.

16.4.2004

EN

Official Journal of the European Union

L 110/21

two sprays programme, it should be included twice and
in a three-spray programme,
it should be included
twice (30) as well). As there are currently, on average,
2,25 sprays in France and strobilurins are only used in
concluded that
it
0,98 sprays,
is
in the
further
scope
considerable
importance of strobilurins in France.

can be
a
for

increase

there

(126) BASF has,

in line with its general European policy,
introduced its strobilurin (kresoxim-methyl or KM) only
In
in co-formulations with other active ingredients.
1997,
it has introduced a mixture of KM with its
triazole epoxiconazole (generally recognised as the best
triazole on the market), sold under the brand names
Ogam and Ludion.
In 1998, BASF has introduced a
mixture of KM with fenpropimorph, a morpholin with
good curative activity against powdery mildew to
complement KM in the face of resistance issues (brand
names Senso and Larso). In 2000, BASF has introduced
its
and
fenpropimorph. However, it is not expected that it will
lead to a major increase in sales as the tests undertaken
by the ITCF give similar results to those of Ogam (KM +
EPOXI). It might be used instead of Ogam in the event
of severe powdery mildew occurrence. Ogam accounts
for almost all sales of KM in France in 1999 and overall,
BASF's sales remained stable from 1998 to 1999. Ogam
is used in all treatments and to a very large extent
without any other tank mixing.

three-way mixture of KM,

epoxiconazole

(127) AstraZeneca

this mixture will

introduced in 1997 both its

straight
azoxystrobin product
(Amistar) and a mixture with
fenpropimorph (Amistar Pro). It introduces in 2000 a
third product, Amister Ter, a mixture of azoxystrobin
and its triazole hexaconazole. This mixture will only be
introduced in France, because hexaconazole is not
registered outside Belgium and France. It is expected by
further increase the
the ITCF that
the curative
penetration of azoxystrobin in view of
show
results
the triazole, and the test
activity of
superior results to straight azoxystrobin on septoria and
the rusts. Total azoxystrobin sales increased by more
than [20 to 30]* % in 1999 compared to 1998, and
some [60 to 70]* % of AstraZeneca's strobilurin sales
are the straight Amistar. Azoxystrobin is mostly used in
wheat as a T3 treatment and it sets the ‘gold standard'
for barley. Overall, Amistar is mostly used in tank mixes
with other products.

(128) Novartis will

introduce its trifloxystrobin products in
2001. It expects sales in this first year to reach […]*,
increasing to […]* in 2004.

Strobilurin-based cereal fungicides in Germany

(129)

greater

sold Juwel

impact on cereal

In Germany, too, the introduction of the strobilurin in
1996 had a major
fungicide
competition, with strobilurin-based products accounting
in 1999 for about half of the around EUR 240 million
total expenditure on cereal fungicides. BASF's strobilurin
sales were until 1999 considerably
than
AstraZeneca's sales. However, the rapid development of
powdery mildew resistance with the first resistant strains
being found in 1998 in northern Germany, and what
the market considers to be an inappropriate strategic
seems to have tarnished BASF's
reaction by BASF,
product positioning to the benefit of AstraZeneca.
In
(a mixture of KM and
1998, BASF
epoxiconazole) and recommended its use in T1 and T2.
As a reaction to the growth of powdery mildew
resistance, in 1999 it withdrew its Juwel product (and
withdrew its stocks, a very exceptional course of action
in the crop protection business) and replaced it by Juwel
Top (three-way mixture of KM + epoxiconazole
+ fenpropimorph). The product
is positioned as a
T1-only treatment; for T2 BASF recommends the use of
Opus Top (epoxiconazole + fenpropimorph). Juwel Top
is considered by leading advisors to be an inappropriate
anti-powdery mildew resistance product, as the content
of fenpropimorph in the mixture is too low. BASF also
promotes a tank mixture of its Juwel Top with Dow's
Fortress (quinoxyfen). For the 1999 to 2000 campaign,
BASF and Dow have launched a twin pack of Juwel Top
and Fortress, called Juwel Forte, that is recommended in
T1, while Juwel Top is recommended for T2. This
package is considered by an independent expert (31) to
the powdery mildew efficacy of
reach almost
the
original
Juwel product, but with less residual activity
against septoria and rusts. BASF has thus changed its
product portfolio and positioning with every annual
cycle.

(130) AstraZeneca has had a very consistent approach with
Amistar, positioned for all sprays. A particular element
for Germany is that tank-mixing recommendations with
other products is more prescriptive of dose and that
these doses have to be agreed by the two companies.
Amistar's recommended partners for T1 wheat is Bayer's
tebuconazole (Pronto) prior to 1999 and Pronto Plus
(tebuconazole + spiroxamine) for 1999. For T1 barley,
is Dupont's Harvesan
the
recommended partner
is
(flusilazole + carbendazim).
In 2000, Amistar
recommended
(Novartis'
propiconazole and fenpropidin mixture) for T1 and with
Gladio
and
propiconazole,
for T2. These mixtures are
tebuconazole mixture)
fenpropidin than
recommended at

in wheat with Agent

lower dosages of

fenpropidin

(Novartis'

(30) In view of resistance management, a maximum of two strobilurin

sprays is recommended.

(31) Dr. Manfred Bartels in Top Agrar 1/2000, p. 53.

L 110/22

EN

Official Journal of the European Union

16.4.2004

are

allowed.

(offering

competitors

than the mixtures

competitors offering fenpropimorph and quinoxyfen
The AstraZeneca-Novartis
products
mixtures are thus cheaper
that
Novartis'
fenpropimorph,
quinoxyfen) are allowed to recommend for tank-mixing
with Amistar. In their Reply, the parties have indicated
that the tank-mix recommendation with Pronto Plus is
It can be noted that
cheaper than that with Gladio.
Pronto
fenpropimorph,
fenpropidin or quinoxyfen. Moreover, the tank-mix with
Agent is cheaper than that with Pronto Plus. For T3,
Amistar is recommended on its own.

contain

does

Plus

not

(131) The total acreage treated with strobilurins has, as a
consequence of the resistance issues, decreased in 1999
compared to 1998, an exceptional feature within the
European countries. The increase, by around onethird,
of the surface area treated with Amistar (from […]* to
[…]* hectares) has not compensated the decline of BASF
products from […]* (including […]* treated by Jewel in
1998) to […]* (including […]* with the new Juwel Top).
However, for the first time Amistar accounts for more
than […]*, compared to around […]* in previous years.
Amistar could have been more successful if it had not
faced capacity constraints. In total sales, BASF's products
are still somewhat more important (as BASF's products
than
are mixture products,
Amistar).

they are priced higher

(132)

It can be noted that the independently recommended
treatments consist typically of one of the Juwel mixtures
as T1 and Amistar as T2. The mixing partner changes
according to circumstances. This ‘natural division' will
be challenged by Novartis (see recitals 134 to 137).

(135) There appears to be a ‘natural division' between the two
producers' products, with BASF's products forming part
of the first spray and AstraZeneca's Amistar in the later
spray. In 1999, BASF had somewhat higher sales than
AstraZeneca. [Competitor business secret]*.

(136) A specific feature of the United Kingdom market is that
it is the first major market where Novartis' strobilurin,
trifloxystrobin, under the brand name Flint
is being
introduced following registration in March 2000. It is
thus the first market where the ‘natural division' is being
challenged by a new market entrant. According to
provisional sales estimates, Flint achieved sales of some
[…]*. Despite the late introduction, these sales account
for an estimated [10 to 20]* % of strobilurin sales. The
merged entity can thus be expected to account, in 2000,
for over [50 to 60]* % of strobilurin sales.

(137) Based upon its

that

its product

technical profile as a very broad
spectrum fungicide with excellent activity on septoria
(just as azoxystrobin) combined with mildew activity
(contrary to azoxystrobin, but slightly inferior to KM),
Novartis endeavours to position […]*. Overall, Novartis
[…]*. Another big benefit
claims
compared to Amistar, with which it has to rival
to
provide the best tank-mixing solution (as opposed to
KM that is only sold in pre-formulated mixtures), is said
to be its increased dose flexibility […]*. On barley,
KM,
where Amistar's
trifloxystrobin has […]*. An additional advantage of
Novartis' trifloxystrobin is that it will also be offered in
pre-formulated mixtures with Novartis'
strongest
triazoles, cyproconazole and propiconazole.

lead was

unrivalled

by

(133) According

to

Novartis' marketing

its
trifloxystrobin products will be introduced in 2001.
Sales in that year are estimated to account for […]*,
thus accounting for [10 to 20]* % of
the German
strobilurin-based cereal fungicide sales.

plan,

Strobilurin-based cereal fungicides in the United
Kingdom

(134)

In the United Kingdom, too, strobilurins, introduced in
1997, had the significant impact on the market that they
had in the other major cereal-producing countries
(accounting for almost [40 to 50]* % of value in 1999).
As powdery mildew resistance is less of a problem in
the United
(the
anti-resistance strategy of a maximum of two strobilurin
treatments remains), the progress of strobilurin usage
continues.

Kingdom than

in Germany

Strobilurin-based cereal fungicides in the Nordic
countries

(138)

Sweden

In Denmark,
Finland, AstraZeneca
and
accounted in 1999 for over [70 to 80]* % of sales in
each of these markets [Competitor business secret]*. As
BASF's strobilurin products are not registered in Finland,
AstraZeneca has [90 to 100]* % of strobilurin sales in
Finland. Novartis expects to register its trifloxystrobin in
Sweden and Finland in 2001.

New strobilurin-based products

(139) Following

industry quickly
recognised the broad spectrum disease coverage of

first patents,

the

the

16.4.2004

EN

Official Journal of the European Union

L 110/23

in strobilurin research. Whilst

strobilurins in many different crops, so that all R & D
based crop protection companies have been or are
active
the market
investigation has enabled the Commission to have a
good overview of the current position of each of the
this information is
major companies in this respect,
confidential and can, therefore, not be disclosed as such
in the
can be
concluded that from now until at least 2004 strobilurin
products will come only from the merged entity and
BASF.

following description. However,

it

known about the technical performance of the Bayer
substance, but an AstraZeneca estimate shows that the
substance will not be better than picoxystrobin. [Bayer
business secret]*.

(145) Bayer has entered into a […]* supply agreement for
[…]* azoxystrobin with AstraZeneca to develop a
mixture with its
spiroxamine active substance. The
territories would be limited to […]* and Bayer will be
the […]* distributor of the product. The product has
been registered in Sweden since February 2000. [Bayer
business secret]*.

(140) Novartis is gradually introducing its new strobilurin,

trifloxystrobin, on the EEA markets.

(141) AstraZeneca,

has

too,

new strobilurin under
a
development, the first second generation strobilurin. The
product's name
is
expected to be launched in […]*. It is indicated in the
investment proposal
for picoxystrobin manufacture
presented to the AstraZeneca board on 30 September
1999, that […]*.

is picoxystrobin. The product

[…]*

that BASF will

internal documents

indicate that
launch in […]*

they
(142) Both parties'
expect
its
second-generation strobilurin, BAS500F. As stated in the
previous recital, the technical merits of this compound
are less than that of picoxystrobin, with the exception
of eyespot. It can be expected, in view of the narrower
spectrum of KM and the problems caused by the
powdery mildew resistance management, that BASF will
position this product to replace its KM product portfolio
and, if possible, expand further. [BASF business secret]*.

(143)

[…]*

(144)

considered too distant

[Competitors' business secrets]* Bayer has a strobilurin
in development and expects [Bayer business secret]* first
market launches in the year [Bayer business secret]*,
thereby confirming the parties' estimate. However, this
time horizon is
the
Commission to take into account for the purpose of
assessing the consequences of this operation, in view of
the uncertainties
the
registration data that Bayer will have to
additional
collect between now and the year
[Bayer business
secret]*. The uncertainty is probably best illustrated by
[…]*. Not much is
reference to the experiences of

related to the outcome of

for

It

relates

strobilurins.

(146) The parties have also referred to the launch of products
that, whilst technically not strobilurins, have the same
mode of action as
to the
substances famoxadone from Dupont and fenamidone
it appears from the public
from Aventis. However,
documents submitted by the parties that fenamidone is
not active on cereals (its uses being downy mildew on
grapes and vegetables and late blight on tomatoes).
testing results and
Furthermore, AstraZeneca internal
the ITCF classification indicate that famoxadone has at
most weak to average results in cereal diseases. This is
also explicitly
internal AstraZeneca
documents (32) and finds confirmation in the low sales
results of the product in the markets where it has been
launched.

confirmed by

Strobilurin sales forecasts

(147) Novartis' marketing plan foresees steadily increasing
sales of its strobilurins. With sales in 2000 in Belgium
and the United Kingdom of […]* up to sales in 2003
for a total of […]*. These EEA sales projections for
2003 are estimated to account for [10 to 20]* % of
total cereal fungicide sales.

(148) Probably the highest-level overview of

the parties'
expected future market share in Europe in cereals comes
from the document of September 1999 by which
to a
AstraZeneca's board was
picoxystrobin investment. Translating the data in this
document into strobilurin-based cereal fungicides gives
the following table:

requested to agree

(32) [….]*

L 110/24

EN

Official Journal of the European Union

16.4.2004

[table based on internal AZ document]*

Strobilurins

Pico

Ami

Zeneca

BASF

Novartis

Others

Total sales

Early wheat

[…]*

[…]*

[…]*

[…]*

Late wheat

Barley

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

Sales (USD million)

[…]*

[…]*

[…]*

[…]*

[…]*

Total share in strobilurins

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

(149) The above overview gives

the merged entity a combined share of above [>50]* % of
strobilurin-based products. It may be noted that a competitor foresees similar market shares for the
merged entity for 2003. Furthermore, most competitors expect that, instead of a penetration rate of
[…]* strobilurin-based products will account for some 60 to 70 % of total sales.

(150) The following table provides the forecast of future market shares of the merged entity (33) and
BASF, the only companies offering these products up to 2004 (at least), for the EEA and for each of
France, Germany and the United Kingdom for the years 2000 to 2004. The forecast is based on the
companies' projected sales.

EEA

FR

DE

UK

Syngenta

BASF

Syngenta

BASF

Syngenta

BASF

Syngenta

BASF

2000

2001

2002

2003

2004

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

(151) On the basis of the sales forecasts of each of AstraZeneca, Novartis and BASF as summarised in the
above table, it is plain that the merged entity would be the clear market leader in the EEA as a
the United Kingdom and Germany (34) with sales accounting for more than
whole, France,
[>50]* % in the years to come in the EEA, France and the United Kingdom.

(152) A substantial number of the respondents in the market investigation have expressed concerns as to
the future market position of the new entity in the domain of strobilurin-based cereal fungicides.
All comments point to the fact that the already strong position of the parties in strobilurins in
terms of market shares will be cemented by Syngentas opportunitities for mixing and bundling its
strong strobilurins with its strong non-strobilurin-based fungicides. To further develop this
argument,
it is necessary to consider first the overall market context of the cereal fungicides
markets.

(33) […]*
(34) […]*

16.4.2004

EN

Official Journal of the European Union

L 110/25

Overall cereal fungicides markets

The French cereal fungicide market

EEA Market Shares

(153)

In 1998, the global fungicide markets were worth about
EUR 5 billion, and [40 to 50]* % of this market was in
Europe (EUR 2 134 million). Fungicide applications in
cereals represent [40 to 50]* % of the total European
fungicide market with a value of EUR 934 million (875
million according to the parties) and some [10 to 20]*
% of total crop protection expenditure in Europe. Cereal
fungicides and cereal herbicides (EUR 943 million) are
by far the most important crop protection markets.

in 1998,

(154) For cereal fungicides in the EEA, the parties estimate
that,
they commanded a combined market
share of [30 to 40]* % (N [10 to 20]* % + AZ [10 to
20]* %) with sales of EUR […]*. BASF had [30 to 40]*
% (sales of EUR […]*). Bayer, with sales of EUR […]*,
would be the third player with [5 to 10]* %. Other
competitors were Aventis with EEA sales of EUR […]*
giving it a [5 to 10]* % market share and DuPont with
EEA sales of EUR […]* giving it a [0 to 5]* % market
share. The Commission's market investigation broadly
confirms this estimate. The main difference is that
Syngenta and BASF realised similar sales [Competitors'
business secrets]*.

(155) For 1999,

the EEA sales remained stable. From the
information available to the Commission, it seems that
all companies except AstraZeneca and Bayer have lost
sales. BASF has lost some sales. Novartis has lost some
[10 to 20]* % of its sales. However, the increase in sales
by AstraZeneca (more than [20 to 30]* %) means that
the merged entity market's lead is further increased. The
merged entity has a [30 to 40]* % market share (N [10
to 20]* % + AZ [20 to 30]* %). BASF has [30 to 40]*
%. Bayer has [5 to 10]* %, followed by Aventis [5 to
10]* % and the others each less than [0 to 5]* %.

(156) The three most

important national cereal

in the EEA. These markets

fungicide
markets are France, Germany and the United Kingdom.
They account for almost 90 % of total cereal fungicide
the best
sales
documented and will be described in recitals 157 to
173. In addition to these three national markets, a short
description will also be given of the Nordic markets,
where the concentration is considered to lead to the
creation of a dominant position.

are

Market share figures

(157) As indicated above, France is by far the largest cereal
fungicide market. This is shown by the large cereal
acreage of around 7,5 million hectare, of which 5,2 are
wheat and 1,6 barley, and one of the most intensive
uses of fungicides, with around EUR 49/ha. Only in the
smaller Benelux and Irish market
there a more
intensive use of cereal fungicides (around 68 EUR/ha).
This overall figure for France hides some considerable
regional differences. In the South of France, only one to
two sprays are used, whereas in the north three sprays
are the norm with sometimes even an additional early
‘eyespot' treatment.

is

(158) The parties estimate that in 1998 total sales were some
EUR […]*. According to their estimate,
they have a
combined market share of [30 to 40]* % (N [20 to
30]* % + AZ [10 to 20]* %), BASF has [30 to 40]* %,
Aventis [5 to 10]* %, Bayer [5 to 10]* % and DuPont
[0 to 5]* %. The Commission's market investigation,
based on the replies of the above companies as well as
Dow and American Cyanamid, indicates that estimated
sales of the responding companies are slightly above the
parties' estimate for the total market. On the basis of
the market investigation, the market shares of Syngenta
the
and BASF would be
percentage difference remains broadly the same. It also
appears that the respective sales of N and AZ are more
even than suggested by the parties' estimate. The market
shares of the other companies are broadly confirmed. —
Syngenta would appear to have [40 to 50]* % (N [20
to 30]* % + AZ [20 to 30]* %), followed by BASF with
[30 to 40]* %. Bayer has [5 to 10]* %, Aventis [5 to
10]* %, Cyanamid and Dupont [0 to 5]* % and Dow
[0 to 5]* %.

somewhat higher, but

(159) The 1999 French market grew by [0 to 5]* % compared
to 1999. Novartis has suffered a loss of sales accounting
for some [0 to 5]* % market share. However, this loss
has been almost totally offset by the increase in sales of
AstraZeneca.
stable
compared to 1999. Of the other companies, DuPont's
sales have decreased substantially. Syngenta would have
[30 to 40]* % (N[10 to 20]* % + AZ [20 to 30]* %).
BASF has [30 to 40]* %. Bayer has [10 to 20]* %,
Aventis [5 to 10]* %, Cyanamid [0 to 5]* %, Dupont
[0 to 5]* % and Dow [0 to 5]* % .

remained

BASF's

have

sales

Products and companies

(160) With regard to the continuously growing importance of
the strobilurins, reference is made to the recitals 124 to
128 dealing with strobilurin-based cereal fungicides in
France.

L 110/26

EN

Official Journal of the European Union

16.4.2004

and

(straight

strobilurins,

In addition to the

and mixtures with
chlorothalonil)

(161) There are over 100 cereal fungicide products offered in
France.
the most
important products are BASF's epoxiconazole product
respectively
range
fenpropimorph
and Novartis'
cypridonil product range (straight and mixtures with
respectively fenpropidin and propiconazole). BASF's
epoxiconazole products, and in particular the straight
product (brand name Opus), are generally considered
the best starting block for a non-strobilurin spray and,
recommendation to use a
in view of
maximum of
to its being
recommended as T1 of any three spray programme. It is
also often tank-mixed in later sprays with Amistar.
Novartis'
eyespot
product and thus tank-mixed in the T0 or T1 spray.
Other important Novartis products are based on its
triazoles
its
morpholines fenpropidin and fenpropimorph (the latter
shared with BASF), and sulphur.

propiconazole,

cyproconazole

the general

strobilurins,

the most

cyprodinil

effective

leads

and

this

is

either

(162) Bayer's position is still strongly based on its triazole
tebuconazole,
in mixtures. The
straight or
strength of these products is in wheat and barley rusts.
In 1999, it introduced products based on spiroxamine, a
morpholine-like product with a good effect on powdery
fungicide portfolio is based
mildew. Dupont's cereal
straight or
around its triazole flusilazole, either
in
mixtures. Dow entered the market
in 1998 with its
mildewicide quinoxyfen. Aventis' products are based on
fluquinconazole,
(bromuconazole,
its
four
triticonazole
fluquinconazole
Its
prochloraz).
product (brand name Flamenco) was introduced in 1999
and is particularly well suited to be tank-mixed with
Its best-selling product, with
AstraZeneca's Amistar.
brand names Tango Duo and Capitole, is a mixture of
its morpholin tridemorph with BASF's epoxiconazole.

triazoles
and

Distribution

territory. The distributors are

in France. AstraZeneca has
distribution of Amistar
succeeded in setting-up a selective distribution system
with […]* distributors who are granted exclusivity in
their
committed to
reaching an agreed minimum sales figure, not to sell
any directly competing product, unless agreed by
AstraZeneca, and to sell only to final consumers or
other exclusive distributors. The respect of these latter
clauses is controlled by means of a […]*. The contract
has a […]* duration and has allowed AstraZeneca […]*,
In this way,
as well as combatting dosage reduction.
AstraZeneca can further develop the relationship for the
from the preferential
following years and benefits
treatment
vis-à-vis Ogam (BASF's
KM + Epoxi strobilurin mixture).

of Amistar

The German cereal fungicide market

(164) Germany is still predominantly a one-spray country ([80
to 90]* % of
sales), with some two spray
treatments and a three spray programme proving very
rare. Expenditure on cereal fungicides accounts for an
average of EUR 39/ha.

total

[0 to 5]* %. On the basis of

(165) The parties estimate that in 1998 total sales were some
EUR […]*. According to their estimate, BASF is the
market leader with [40 to 50]* %, followed by Syngenta
with [30 to 40]* % (N [5 to 10]* % + AZ [10 to 20]*
% + [0 to 5]* % of their products distributed by a third
party), Aventis [5 to 10]* %, Bayer [5 to 10]* % and
DuPont
the market
investigation, total sales almost reach EUR 250 million.
BASF's and Syngenta's respective market shares would
be somewhat lower than the parties' estimate, but the
percentage difference remains broadly the same. With
the exception of DuPont
the
other companies' market shares are in line with the
parties' estimate. BASF has [40 to 50]* %, Syngenta [30
to 40]* % (N [5 to 10]* % + AZ [20 to 30]* %),
Aventis [5 to 10]* %, Dupont and Bayer [5 to 10]* %,
Cyanamid [0 to 5]* % and Dow [0 to 5]* %.

(higher market share),

(163)

In France,
in keeping with the situation in the other
important cereal-producing countries, cereal fungicides
are very attractive products for distributors and they are
estimated to account for about [10 to 20]* % of the
distributor's
total profitability on crop protection
products. Distributors have, in general, a wide range of
products available from all different producers. Exclusive
or selective distribution for crop protection products is
rare. The common way of operation in the sector is to
have an agreement on the support actions (field tests,
product demonstrations, mailings and so forth) that the
distributor is going to take and the cooperation and/or
compensation he receives for this from the producer.
There is, however, a notable exception, namely the

(166)

In 1999, BASF lost considerable market share to the
benefit of almost all other competitors. As a result,
BASF lost its market leadership to the merged entity.
Syngenta has [30 to 40]* % (N [10 to 20]* % + AZ
[20 to 30]* %), BASF [30 to 40]* %, Aventis and Bayer
[5 to 10]* %, Dow and Cyanamid each less than [0 to
5]* %. BASF has thus lost [5 to 10]* % market share.

(167) The importance of the strobilurins is outlined above.
Specific reference is made to the powdery mildew
resistance problems of BASF and the resulting decline in
market share.

16.4.2004

EN

Official Journal of the European Union

L 110/27

Pronto Plus

(168) With regard to the non-strobilurin products, it can be
noted that Novartis, contrary to its position in most
other European countries, has substantially increased its
total sales in 1999, especially with its propiconazole
mixtures
(Gladio and Tilt Top brands). The other
competitors, too, and especially Bayer, have succeeded
in increasing their sales. As noted above, Bayer's main
product,
ideal
tank-mixing partner to Amistar. It is also positioned as
an effective
a disease whose
occurrence and the resulting toxin production is subject
of debate
In addition, Cyanamid is
positioning its product (metconazole — Caramba brand)
in this segment as a direct competitor to Bayer's Folicur
(straight
indicated
tebuconazole). Dow has, as was
above, linked its Fortress (quinoxyfen) to BASF's Juwel
Top and both are now selling the Juwel Forte pack. Dow
has stopped selling Fortress as a straight product.

fusarium treatment,

in Germany.

is marketed

the

as

(169) The German market is very prescriptive with regard to
the oppportunities open to a producer to state that its
product can be tank-mixed with that of other producers.
Contrary to the other Member States, this requires the
agreement of both producers, even with respect to the
respective dosage with which the tank-mix can be
recommended. In this respect, reference is made to a
the 2000 campaign) between
recent agreement
Zeneca
to recommend tank-mixing
between azoxystrobin and fenpropidin based products.
As the dosage at which this mixture is recommended is
lower than the prescribed dosage for other mixtures,
this gives the companies the chance to offer the most
attractive mixture
the other
companies' mixture candidates based on fenpropimorph
or quinoxyfen (powdery mildew segment).

(for
and Novartis

to the detriment of

[30 to 40]* % (N [10 to 20]* % + AZ [10 to 20]* %),
BASF [30 to 40]* %, Bayer and DuPont [5 to 10]* %
each and Aventis less than [0 to 5]* %. On the basis of
the market investigation, total sales are below EUR 150
million and BASF would be the market leader, closely
the two
followed by the merged entity. Together,
companies would account for around [60 to 70]* %.
Bayer would account for over [5 to 10]* % and the
other companies would account for considerably below
[5 to 10]* %. The total market is estimated at EUR
[…]* with BASF accounting for [30 to 40]* %, followed
by Syngenta with [30 to 40]* % (N [20 to 30]* % +
AZ [10 to 20]* %). Bayer has [10 to 20]* %, Dupont
and Aventis each [0 to 5]* %. Dow has [0 to 5]* % and
Cyanamid less than [0 to 5]* %.

(172)

companies,

and in particular Novartis,

In 1999, the overall market has grown. However, this
overall growth hides considerable shifts between the
companies, with spectacular growth by AstraZeneca
(sales doubled) and a further growth for BASF. The
lost
other
considerable sales. Overall, BASF would remain market
leader, closely followed by the merged entity. The overall
market is EUR […]*. BASF has [30 to 40]* %, having
increased its sales with almost EUR […]*. Syngenta has
[30 to 40]* % (N [10 to 20]* % + AZ [20 to 30]* %).
Novartis lost over EUR […]* of sales, but AstraZeneca
increased its sales with EUR […]*. Bayer has [5 to 10]*
%, Aventis [0 to 5]* %, Dupont and Dow [0 to 5]* %.

The United Kingdom cereal fungicide market

(170) Average expenditure in the United Kingdom on cereal
fungicides is EUR 44/ha. In the United Kingdom, T2 is
the most important spray for wheat, followed by T1 and
T3. T3 is popular only during a wet summer and
increasingly Amistar at low dose is becoming popular.
Of the total of two sprays, barley responds better to an
application at T1. As to area treated, over onethird of
the total area receives two sprays, with most of the
remainder being more or less equally spread over one
and three sprays. From a value point of view, almost
[40 to 50]* % of the market is accounted for by the
three spray programmes (with the T2 being the most
valuable), [30 to 40]* % by two sprays (with the T2
being the most valuable) and little over [5 to 10]* % by
the one spray area.

(171) The parties estimate that in 1998 total sales were some
EUR […]*. According to their estimate, Syngenta has

(173)

trifloxystrobin product alone,

It can be noted that estimated sales for 2000 of
Novartis'
launched in
March 2000, would account for almost as many sales as
Novartis' total sales in 1999 EUR […]* sales accounting
for an estimated [10 to 20]* % market share.
It is,
therefore, beyond doubt that the merged entity would
be the market leader in 2000.

The Nordic countries: Sweden, Finland and
Denmark

(174) The parties estimate that the Swedish market in 1998 is
worth EUR […]* and Syngenta would have a [90 to
100]* % market share (N [50 to 60]* % + AZ [30 to
40]* %). BASF would have a [0 to 5]* % market share.
This is broadly confirmed by the market investigation.
the parties maintained
In the growing 1999 market,
substantial gains of
their market
share, with the
the loss of Novartis.
AstraZeneca compensating for
BASF is the other relevant market player.

L 110/28

EN

Official Journal of the European Union

16.4.2004

(175) AstraZeneca was not present on the cereal

its

BASF

before

introduced

fungicide
market until the introduction of Amistar in 1997, two
years
Mentor
(KM + fenpropimorph). In those two years, AstraZeneca
captured around two-thirds of the total market, and the
result could even have been better had the product been
limits on
more widely available, since shortages put
sales
in
capturing less than [5 to 10]* % of the market and its
sales are considerably below those of AstraZeneca in the
Amistar launch year.

activities. BASF

succeeded only

support

the 160 million sales in the third most
fraction of
important market,
the United Kingdom. The parties
estimate that Syngenta would have an [80 to 90]* %
market share (N [40 to 50]* % + AZ [40 to 50]* %).
BASF would have a [5 to 10]* % market share and
Bayer [0 to 5]* %. In 1999, the overall market increased
lost considerable sales and
somewhat but Novartis
than
market
compensated
Syngenta
maintained
share. The market
investigation indicates that the merged entity's market
share was above [60 to 70]* % in 1998 and that this
has further increased in 1999 to almost [70 to 80]* %.

share. However, AstraZeneca more

losses. Overall,

high market

those

for

its

(176) Before the introduction of the strobilurins, Novartis was
the uncontested market leader with its propiconazole
and fenpropimorph based products (mostly mixtures).
Also BASF has a straight
fenpropimorph product
this only has very limited
on the market, but
sales, even when compared to the sales of Novartis
fenpropimorph+propiconazole mixture (Tilt Top). This
Novartis mixture product had thus successfully blocked
the development of BASF's straight product (see also
Denmark, at recitals 179 et seq.). Novartis succeeded in
registering its cyprodinil + propiconazole mixture in
1999 (Stereo), a competitor to Amistar in barley. The
only other triazole on the market is Aventis' Sportak
(prochloraz), distributed by BASF. It has lost a lot of its
market share and, on account of its limited spectrum, it
has a narrow application window.

(180)

In Denmark,
in line with the other Nordic countries,
few crop protection products are registered. This is also
true of cereal fungicides. Several of the new triazoles
have been tested in the Nordic countries, but they have
not been able to pass the registration tests. A typical
feature for the Danish market is that the dosage usage
rates are extremely low compared to the rest of Europe.
Where Amistar is recommended at 1 l/ha and used
straight in the range of 0,6 to 0,9 l/ha, the Danish
farmer only uses 0,3 l/ha.

(177) The parties estimate that the Finnish market in 1998 is
worth EUR […]* and Novartis would have a [60 to
share whilst AstraZeneca was not
70]* % market
present. This is confirmed by the market investigation.
However, AstraZeneca entered the market in 1999 and
accounted for less than [5 to 10]* %. Furthermore,
therefore, be
sales.
Novartis
concluded that the merged entity's market share is some
[80 to 90]* % in 1999.

increased its

can,

It

(Bayfidan), Aventis

(181) Since the introduction of Novartis' Tilt in 1982, it has
had around [80 to 90]* % market share in the years
before the introduction of strobilurins. The other players
were Bayer
(Sportak) and BASF
(Corbel). A competitor indicated that at the time there
were only two major
fungicide products registered,
namely fenpropimorph (shared between Novartis and
BASF) and propiconazole (Novartis only), Novartis
sales
succeeded
straight
in
fenpropimorph/
launching
fenpropimorph
propiconazole mixture.
Folicur
Bayer's
In
(tebuconazole) obtained registration, eight years after
the application for
registration was made. Folicur
achieved a market share of around [5 to 10]* % in
1998, but sales dropped considerably in 1999.

of BASF's
the
1997,

blocking
by

(178) All crop protection products are imported on the
Finnish market by either Berner or Kemira. These
companies have agreements with one or more of the
manufacturers for their whole portfolio. Amistar was
only introduced in 1999, with Berner as the local
registration holder. Contrary to the experience in the
other Nordic countries, it captured only a small part of
the overall market. Novartis portfolio (Tilt and Stereo),
imported by Kemira, still accounts for much of
the
remainder of the market.

(182) The introduction of Amistar in 1998 was extremely
successful, capturing [40 to 50]* % of the market in
two years. BASF introduced its KM + fenpropimorph
mixture Mentor in 1999, but realised sales considerably
year.
below those of AstraZeneca
the
not
it
Furthermore,
KM + epoxiconazole mixture will be registered in any of
the Nordic countries. On the other hand, AstraZeneca
has not made use of its registration of Amistar Pro in
1998 and 1999.

the previous
that

expected

is

(179) The Danish market is the fourth most important cereal
fungicide market. However, with total sales estimated,
it accounts for only a
by the parties,

to be […]*,

(183) Novartis'

product,
leading
zole + fenpropimorph), has

Top

(propicona-
Tilt
lost considerable sales

16.4.2004

EN

Official Journal of the European Union

volume which was only partly compensated by the
introduction of
the new cyprodinil + propiconazole
mixture (Stereo) in 1999. However, Novartis remains the
clear number two producer on the Danish market with
its triazole + morpholin product portfolio. It may be
noted that the possibility for a tank-mixture between
Amistar and Tilt is considered as […]*. The merger thus
auomatically eliminates this […]*.

The other cereal fungicide markets

(184) The parties also estimate that they are probably market
this is not confirmed by the
leaders in Spain, but
In Ireland, the parties lost their
market investigation.
market leadership ([40 to 50]* % in 1998) to BASF in
1999. In all other countries, BASF is the market leader
or the parties have at most around [20 to 30]* %
market share. The highest market share is in Austria
with [30 to 40]* %, where Bayer has [20 to 30]* %.

New products

(185) As was

indicated in recital 139,

the only new
strobilurin-based products from now until the end of
2003 will come only from the merged entity and BASF.
Novartis is currently introducing its new strobilurin,
trifloxystrobin, on the EEA markets. AstraZeneca has
the new strobilurin picoxystrobin under development,
the first second generation strobilurin, to be launched in
[…]*. Both parties'
internal documents indicate that
they expect that BASF will launch in 2002 its second
generation strobilurin, BAS500F.

(186) No new non-strobilurin active substance is expected to
reach any of the EEA cereal fungicide markets before
[…]*. The only new products will be mixtures of
existing active substances and some new launches of
existing products in other countries.

Overview of current market shares

L 110/29

(%)

All cereal fungicides

1998

1999

Syngenta

BASF

Syngenta

BASF

EEA

[30-40]*

[30-40]*

[30-40]*

[30-40]*

FR

DE

UK

DK

SV

FIN

[40-50]*

[30-40]*

[30-40]*

[30-40]*

[30-40]*

[40-50]*

[30-40]*

[30-40]*

[30-40]*

[30-40]*

[30-40]*

[30-40]*

± [60-70]*

±[10-20]* ± [70-80]*

±[10-20]*

[90-100]*

[0-5]*

[80-90]*

± [5-10]*

[60-70]*

[80-90]*

Expected future market shares

(188) As indicated above, it is beyond doubt, in view of the
estimated sales of Novartis' strobilurin in the United
Kingdom, that in 2000 the merged entity will be the
market leader in the United Kingdom as well.

(189) For AstraZeneca's Amistar, the marketing year 1999 to
2000 will be the first for which there will be no supply
shortage problems.
In previous years, capacity for
manufacturing Amistar was limited, which resulted in
the allocated amounts for some of the countries being
sold in an extremely short time. The sales of Amistar so
far are, therefore, below the potential of the product. As
to France, AstraZeneca expects for the 1999/2000 year
to increase its overall market share by […]* to obtain a
[…]* market share, entailing an increase in sales of
Amistar, Amistar Pro and Amistar Ter of around […]*.
For the United Kingdom,
is clear from the 1999
it
marketing plan that the overall objective is to be […]*.

(190) Novartis' marketing plan foresees an overall

[…]*

… share of the EEA cereal fungicide markets in 2003.

(187) The following table provides an overview of the market
shares in 1998 and 1999 of the merged entity and BASF
on the overall cereal fungicide markets. This overview is
provided for the EEA and for the six national markets of
the United Kingdom,
France, Germany,
concern:
Denmark, Sweden and Finland.

(191) Probably the highest-level overview of

the parties'
expected future market share in Europe in cereals comes
from the document of September 1999, mentioned in
the section on strobilurins, by which AstraZeneca's
board was asked to agree to a picoxystrobin investment.
The expected sales of BASF and Novartis are indicated
in this same document in the following form:

L 110/30

EN

Official Journal of the European Union

16.4.2004

EU Cereal Fungicide Market Shares — 2005

Strobilurins

Zeneca

BASF

Novartis

Others

Total sales

Early Wheat

Late Wheat

Barley

[10-20]*

[10-20]*

[20-30]*

[40-50]*

[10-20]*

[0-5]*

[20-30]*

[5-10]*

[10-20]*

Sales (USD million)

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

Share of total cereal
fungicides

[30-40]*

[10-20]*

[10-20]*

[50-60]*

Other fungicides

Zeneca

BASF

Novartis

Others

Total sales

Early Wheat

Late Wheat

Barley

Sales (USD million)

Share of total cereal
fungicides

[0-5]*

[20-30]*

[10-20]*

[0-5]*

[5-10]*

[5-10]*

[20-30]*

[10-20]*

[10-20]*

[10-20]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[10-20]*

[10-20]*

[10-20]*

[40-50]*

[…]*

[0-5]*

(%)

(%)

(%)

Total fungicides

Zeneca

BASF

Novartis

Others

Total sales

Early Wheat

Late Wheat

Barley

[20-30]*

[30-40]*

[30-40]*

[0-5]*

[40-50]*

[20-30]*

[10-20]*

[20-30]*

[20-30]*

[20-30]*

[20-30]*

[10-20]*

Sales (USD million)

[…]*

[…]*

[…]*

[…]*

Total market share

[30-40]*

[20-30]*

[20-30]*

[10-20]*

[…]*

[…]*

[…]*

[…]*

(192) The above overview gives the merged entity a combined market share of [50 to 60]* % for the
overall cereal fungicide markets. It can be noted that another competitor foresees similar market
shares for the merged entity for 2003. Furthermore, most competitors expect that strobilurin-based
products will account for some 60 to 70 % of total sales. If, on the basis of this assumption,
strobilurins were to account for [60 to 70]* % of total sales, the merged entity's market share of
the overall cereal fungicide markets would rise by another [0 to 5]* %.

(193) The following table provides the forecast of future market shares of the merged entity and BASF on
the overall cereal fungicide market for the EEA for the years 2000 to 2004. The table is based on
the forecast sales that AstraZeneca, Novartis and BASF,
respectively, have supplied to the
Commission. The estimate for the total market size is that provided by BASF (35) […]*.

(35) Only Novartis and BASF have provided estimates for the total EEA market, and BASF's estimate for 2000 comes
closest to the total market value resulting from the market investigation for 1999. Only BASF has provided
estimates for the national markets. Even for Germany and the United Kingdom the 2000 estimate is relatively close
to the 1999 market value emerging from the Commission's market investigation. This is not the case for France,
where BASF's estimate for 2000 is considerably below sales in 1999. However, for consistency reasons, the estimate
is used.

16.4.2004

EN

Official Journal of the European Union

L 110/31

EEA

2000

2001

2002

2003

2004

Syngenta

[40-50]*

[50-60]*

[50-60]*

[50-60]*

[50-60]*

(%)

BASF

[20-30]*

[20-30]*

[30-40]*

[30-40]*

[30-40]*

(194)

It can be seen from the above table that for each of the years, the merged entity would have a lead
of at least [10 to 20]* % from 2000 onwards, compared to a lead of [0 to 5]* % in 1999.

(195) According to the same methodology, the result for France, Germany and the United Kingdom is as

follows (36):

(%)

France

Germany

UK

Syngenta

BASF

Syngenta

BASF

Syngenta

BASF

[50-60]*

[30-40]*

[40-50]*

[30-40]*

[50-60]*

[30-40]*

[60-70]*

[30-40]*

[40-50]*

[30-40]*

[60-70]*

[20-30]*

[60-70]*

[30-40]*

[50-60]*

[40-50]*

[60-70]*

[30-40]*

[60-70]*

[30-40]*

[50-60]*

[40-50]*

[60-70]*

[40-50]*

[60-70]*

[30-40]*

[50-60]*

[40-50]*

[70-80]*

[40-50]*

2000

2001

2002

2003

2004

(196)

It is apparent from the above table that on each of the national cereal fungicide markets, the
merged entity will the clear market leader in 2000 with a lead of between 11 and 23 percentage
points. This lead will only grow further in each of the three countries.

(197) As indicated above, the methodology used is based upon the estimate of the total market as
provided by BASF and expresses the merged entity and BASF's sales projections in the form of a
percentage of this estimate. Using this estimate, the total of each parties' projections can be above
[90 to 100]* %. However, the advantage of this estimate is that the relative strength of each
company is expressed as a function of one input-element. The Commission has also calculated
future market shares on the basis of projections of all major R & D-based competitors. In this
scenario, the total estimated market size is the sum of each company's own projections. Also on
this basis the merged entity would have a market share of [40 to 50]* % in Germany, [40 to 50]*
% in France and [50 to 60]* % in the United Kingdom. BASF would account for [30 to 40]* %,
[20 to 30]* % and [30 to 40]* % respectively. The merged entity would thus have a market share
lead of between some 10 and 25-plus percentage points.

(198) The above large market shares strongly suggest that the notified operation will lead to the creation
of a dominant position in the cereal fungicide markets. This conclusion is corroborated by the fact
that Syngenta's large portfolio of strong strobilurin and non-strobilurin-based fungicides will allow
it to pursue product portfolio strategies that no competitor can match and that will, in fact, enable
Syngenta to exploit
its dominant position. These latter arguments will be developed in the
following sections.

(36) The data available to the Commission does not allow a similar projection for the Nordic countries to be made.

L 110/32

EN

Official Journal of the European Union

16.4.2004

Product portfolio strategies

are

introductions

and product

(199) The above overviews of the actual and future market
based on
shares
assessments of the situation prior to the merger and,
therefore, on assessments of competition between three
companies offering strobilurin products and each having
their own non-strobilurin products. They do, therefore,
not take into account the benefits that the merged entity
can derive from combining the products of Novartis
and AstraZeneca.

Past examples

(200) As an illustration of

fungicide markets,

the possibilities that portfolio
management can offer a company on the European
cereal
reference is made to the
previously described situation on the Danish market
several years ago. The two major products registered
were propiconazole and fenpropimorph based. Novartis
had products with both active substances, whilst BASF
had fenpropimorph. By a mixture of the two substances,
Novartis managed to capture a large market share to the
detriment of BASF's previous position.

(204)

for

and Flamenco could be

the other
it was quite important
azoxystrobin,
producers with some good mixing partners to be able
to use this possibility. In this respect, reference may be
made to Bayer's products Pronto and Pronto Plus
(tebuconazole and spiroxamine) and Aventis' Flamenco
(fluquinconazole). From the Table giving the overview
of the active substances' respective strength (recital 115),
it can be seen that the strength of a mixture between
Amistar
a
pre-formulated mixture of azoxystrobin and Novartis'
cyproconazole. The strength of Bayer's Pronto/Plus
replaced by a
could also to a
combination of
the
cyproconazole
one
morpholins. Only with respect
to Fusarium Roseum
does the merged entity seem to be lacking a top
product. In this segment, tank-mixing remains necessary.
It can, however, be noted that
the best strategy for
avoiding a fusarium roseum-risk is to plough the field if
the previous crop was maize and to sow less sensitive
varieties. (37).

replaced by

extent be

large

and

of

In their reply, the parties have stated that the merged
entity will be obliged to continue selling azoxystrobin
straight because of its spectrum primarily as a straight
product, competing as such directly with mixtures.
Other reasons given by the parties relate to the farmers'
preferences
cost penalty of
mixtures, the resulting loss in market share and the fact
that the development of a new pre-formulated mixture
requires
for development and
registration.

three to four years

tank-mixing,

the

for

and Novartis

(201) Reference is also made to the position on the German
market, described above, where the agreement between
to recommend tank-mixing
Zeneca
between azoxystrobin and fenpropidin-based products
the most attractive
enables the companies to offer
the other companies'
mixture to the detriment of
mixture
or
fenpropimorph
candidates
quinoxyfen (powdery mildew segment).

based

on

Withdrawal of straight strobilurin products

(202) There is considerable scope for the merged entity to
leverage its position further by the withdrawal of
straight strobilurin or, at least, not launching any new
the in-house
straight strobilurins. This is possible if
pre-formulated mixtures provide for full disease control
and allow proper resistance management.

(203)

It has been described above how, unlike BASF,
AstraZeneca's overall portfolio did not offer a lot of
scope for the development of such mixtures, so that it
interest of AstraZeneca to offer
was in the overall
success of
azoxystrobin straight.

In view of

the

(205) The Commission acknowledges the time-lapse that is
required before new mixtures could be brought on the
market. However, in a competitive environment where
the only other strobilurin producer (BASF) does not
offer its strobilurins straight and where the merged
entity has a portfolio of possible mixing partners, this
may be a viable course of action. It may be noted that
the parties' arguments presuppose a straight strobilurin
alternative for the farmer, which there would no longer
be if the merged entity were to decide so.

Halting the collaboration with competitors over
mixtures

(206)

[…]* It would be in the economic interests of Syngenta
to stop this cooperation, as the product clashes with
It may be noted that
Syngenta's internal products.

(37) See article of Dr. Manfred Bartels, o.c. and Perspectives agricoles,

février 2000.

16.4.2004

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Official Journal of the European Union

L 110/33

picoxystrobin would also bring the excellent powdery
mildew control
In
addition, one of the morpholins could be added with a
view to resistance management.

is achieved with quinoxyfen.

that

(207)

It is also conceivable that it would not necessarily be in
the long-term interests of the merged entity to prolong
the supply agreement of azoxystrobin to Bayer for its
Nordic mixture with spiroxamine. By the time the
agreement ends, picoxystrobin can be expected to be on
the market, a substance that controls powdery mildew
even better.

plus one half prochloraz. On the other hand, the whole
current marketing argumentation of Novartis is built
around
to prochloraz,
cyprodinil offers good value for money (it costs more,
but
this is more than compensated by the higher
margin due to better disease control).

compared

that,

idea

the

(210) As was observed above,

it

the parties appear

is only with respect

to
fusarium roseum that
to have a
weakness in their portfolio. For all the other diseases,
their products are already part of
the ‘best in class'
mixture (39) and the position of other parties' products
can be weakened by new in-house formulated products
as well as by the introduction of the new strobilurins.

Introduction of new combinations — Syngenta
portfolio

Distribution

(208)

In the European cereal fungicide markets, generally open
to new products, the Syngenta portfolio offers ample
scope for introducing new, potentially very successful
mixtures to enhance sales further,
in addition to the
mechanisms described above. The merged entity would
formulations on the market.
have today 31 different
According
new
combinations can be envisaged, of which 10 are only
following the merger. They are, mixtures
feasible
and
hand,
between,
picoxystrobin respectively (both AZ) and, on the other
hand,
cyproconazole,
fenpropidin,
acibenzolar-S-methyl.
[…]* (38).

propiconazole,
and

competitor, 12 additional

azoxystrobin

respectively

cyprodinil

one

the

on

to

a

(209) The parties have stated that a mixture of azoxystrobin
and cyprodinil would require a full dose of cyprodinil to
control eyespot and thus make it a very expensive
solution for the farmer. It is argued that a farmer would
use a more economic strobilurin + prochloraz solution.
In addition, a triazole would have to be added to ensure
a sound resistance strategy and obtain the benefit of
to
curative
costs.
Additionally,
loss of efficacy
strobilurines with
when formulating mixtures of
cyprodinil. These arguments can be doubted, as Novartis
has recently launched a mixture of cyprodinil and its
triazole cyproconazole where cyprodinil
is not at ‘full
dose', and an addition of a strobilurin to this would be
an appropriate ‘all-in' T1 product.
true that
prochloraz is cheaper than cyprodinil and that the ITCF
is studying the possibility of having one half cyprodinil

there are indications of

activity,

further

adding

the

is

It

(38) […]*

is expected. This allows

(211) The merged entity would have two campaigns before
full
BASF's new product
the perceived weakness of
advantage to be taken of
the
BASF's current strobilurin portfolio. Furthermore,
merged entity would introduce at
the same time as
BASF an even stronger new product (picoxystrobin). In
such a situation, the merged entity could implement
AstraZeneca's distribution method for Amistar in France
or similar mechanisms. This might, for the same reasons
as in France, be attractive to the distribution chain
access
(guaranteed margin,
new products,
from competition). And, with
distinguishing element
two leading strobilurins, the two leading distributors (in
a country or region) could each receive an exclusive
product. Even if no exclusivity were to be given for a
strobilurin molecule portfolio, the numerous mixtures
would allow the merged entity to give the leading
distributors each a ‘unique' product in their region or
country.

to

(212) A similar mechanism could accord with the strategy
devised by Novartis in the United Kingdom to reward
the distributor
in achieving an important minimum
expenditure for each farmer it services on Novartis
products. Such mechanisms, which are not necessarily
limited to fungicides, all have the potential to succeed
by virtue of the larger overall portfolio of the merged
entity and its global weight on the market.

(213) Cereal fungicides are one of the most important markets
for the profitability of the distributors in all Member
States. A close cooperation with the merged entity will

(39) See

Journée UIPP,

fongicides

céréales, 12 octobre 1999,

‘Traitements et interventions de printemps'.

L 110/34

EN

Official Journal of the European Union

16.4.2004

allow them to maintain their margin. Therefore, rather
than attempting to use any countervailing power that
they might have, the distributors can be expected to
pass-on a price increase to the farmer.

Consequences for other competitors

constitute separate markets. Strobilurins account for half
of the sales of all cereal fungicides, and this is expected
to increase further. Prior to 2000, there were only two
strobilurin competitors: BASF and AstraZeneca. BASF is,
EEA-wide, rapidly losing its market leadership. Where in
1997, BASF had [60 to 70]* % of the market, it has [50
to 60]* % in 1999. Novartis is now launching its new
strobilurin.

(214) The other non-strobulurin producing companies will
not be in a position to challenge the parties' position.
As was indicated above,
the merger will allow the
parties to reduce even further the market opportunities
open to these companies, by withdrawing straight
strobilurin products and developing in-house formulated
products.

(219) Without the merger, competition would have developed
between the three companies on the basis of
their
innovative products. As a consequence of the merger,
one of these innovators is removed from the market
which may reduce the incentives to further innovate. In
any event, the merger will bring together two out of
only three strobilurin producers and will reduce the
competition that would otherwise have developed with
the existing and immediate pipeline products.

BASF's position

(215)

In the abovementioned September 1999 Picoxystrobin
board document, AstraZeneca
indicates, discussing
picoxystrobin's price, that: […]*

(216) BASF's future sales prospects confirm [BASF business
secret]* There are, however, some doubts as to the
magnitude of the future success of its new products. It
is clear from AstraZeneca's own test results that its new
strobilurin is superior to BASF's product. On the other
hand, [BASF business secret]* its sales forecast might
not have taken into account this element.

(217) On the basis of AstraZeneca's own assessment and the
above considerations as to BASF's future sales, it may be
concluded that it would not be in the interests of BASF
to challenge the merged entity's position; rather BASF
would follow the price leadership of the merged entity.
Furthermore,
the merged entity has, with multiple
strobilurin options, the chance to position one of its
strobilurin mixtures vis-à-vis BASF current KM-based
products and can thus retaliate effectively if necessary.
The reverse is not directly possible.

Conclusion

(218) Strobilurin-based fungicides are the key drivers of the
fungicide markets. As was observed
European cereal
above, there are strong indications that they may even

(220) The 1999 situation is not

representative of

future
development. As early as 2000 the merged entity's
combined sales will exceed those of BASF. First, the year
2000 is the first year in which there will be no more
capacity
strobilurins.
Secondly, in view of the perceived weakness of BASF's
products, a decline in sales
is
its new
expected. Thirdly, Novartis
strobilurins and expects considerable sales from this
product.

constraints on AstraZeneca's

these products

launching

for
is

(221) The merged entity will be able to increase its market
leadership because of
introduction of a new
the
strobilurin (AstraZeneca's picoxystrobin). Products based
on this substance will be technically superior to BASF's
new strobilurin products. No new products of
competitors are expected to reach the market before
2004. On the basis of AstraZeneca's own market
estimates, the merged entity would account for over [60
to 70]* % of Community strobilurin-based cereal
fungicide sales by […]*. On the basis of
the sales
projections of each of the companies, this would be less.
However, the biggest cause for the difference between
these two figures relates to AstraZeneca's own figures.

(222) On the overall cereal

fungicide markets,

the merged
entity was the EEA market leader even in 1999, with
almost [30 to 40]* %. This is also the case on the
French and German markets. In the United Kingdom,
BASF maintained a very small lead in 1999, but, it is
beyond doubt,
the estimated sales of
Novartis' strobilurin in the United Kingdom, that the
merged entity will be the market leader in 2000 in the
In Denmark, Sweden and
United Kingdom as well.
Finland the merged entity is the clear market leader

in view of

16.4.2004

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Official Journal of the European Union

L 110/35

with market shares above [70 to 80]* %. In view of the
increasing importance of
the strobilurin-based cereal
fungicides on the whole cereal fungicide market and the
parties' consequent position (see above),
the merged
entity will, according to AstraZeneca's estimate, reach a
market share of [50 to 60]* % in the Community in
[…]*. On the basis of two other methodologies with
regard to sales forecasts, it also follows that the merged
entity will become
leader. One
methodology indicates a lead of between 11 and 23
in […]*, which will be further
percentage points
increased in later years. Another gives the merged entity
market shares in […]* of [40 to 50]* % in Germany,
[40 to 50]* % in France and [50 to 60]* % in the
United Kingdom and a lead of between some [10 to
30]* % percentage points over BASF.

clear market

the

they currently have to sell

(223) The merged entity has the ability to leverage its position
further by means of strategies that are feasible and make
economic sense. Such strategies are, for example, the
withdrawal of straight strobilurin products (containing
only strobilurin active substance) and their replacement
by formulated products with substances of other
chemical classes within the merged entity's product
portfolio. As a consequence, other competitors will lose
their
the opportunities
non-strobilurin products as a tank-mix partner with
AstraZeneca's straight strobilurin. Another strategy is to
expand AstraZeneca's French distribution strategy of
selective distribution for its strobilurin product to other
the
Member States,
distributors.
from the market
appears
It
investigation that BASF would not be in a position to
challenge the merged entity; rather, would it follow the
price leadership of the merged entity. The Commission
considers,
the notified
operation would lead to the creation of a dominant
position on the cereal
fungicide markets in France,
Germany, the United Kingdom, Denmark, Sweden and
Finland.

thereby ensuring the loyalty of

the above reasons,

also

that

for

growing season with powdery mildew followed by
cercosporiose,
followed by ramularia and rust. When
powdery mildew develops, typically two treatments will
be necessary. In its absence, one treatment might suffice.
Most of the registered fungicides treat all diseases, but
their efficacy may differ.

(225) The fungicide treatment

is highly influenced by the
technical advice given by independent institutes such as
the ITB in France and the KBIVB-IRBAB in Belgium. In
Greece, the farmers are contractually obliged to follow
the recommendations of
the Hellenic Sugar Industry,
which purchases the products by international tender.

EEA description

(226)

In 1997, the total sales of sugar beet fungicides in the
EEA accounted, according to the parties, for EUR […]*,
with Novartis having a [40 to 50]* % share and
AstraZeneca [10 to 20]* %. DuPont has [10 to 20]* %
and Aventis [5 to 10]* %. In 1998, the parties estimated
total sales of EUR […]*. Novartis has [40 to 50]* %,
AstraZeneca [10 to 20]* %, Dupont [10 to 20]* % and
Aventis [0 to 5]* %. For 1999 (40),
total sales are
estimated at EUR […]*, with Novartis accounting for
[40 to 50]* %, Dupont [10 to 20]* %, AstraZeneca [5
to 10]* %, Sipcam [0 to 5]* %, Aventis and BASF [0 to
5]* %.
the parties' market
estimates do not identify the companies responsible for
sales accounting for around [10 to 20]* %.

It may be noted that

(227) The most

important national market

is France, with
sales of EUR […]* in 1998 and EUR […]* in 1999,
followed by Italy (EUR […]*), Spain [(EUR […]* million
[…]* million in 1999 and Germany (EUR
in 1998,
[…]*). There are no sugar beet
fungicides used in
Finland, Sweden, Norway and Iceland. In the other EEA
reaching a
states,
minimum of EUR […]* in Denmark in 1999).

sales are all below EUR […]*

SUGAR BEET FUNGICIDES

Technicalities

(224) The main diseases in sugar beets are powdery mildew
(both also common in cereals),
(erisyphe),
cercospora (a disease unique
to sugar beets) and
ramularia (a disease also found in vegetables). The
diseases start to develop during different periods in the

rust

The parties' products

(228) Novartis' current portfolio consists of nine branded
products; of which five are straight products with the
active substances cyproconazole (Alto), difenoconazole
(Thiovit)
(Score/Bardos), propiconazole (Tilt), sulphur

(40) The 1999 data, provided in reply to a questionnaire, seem to be
based on a different methodology than the information contained
in the CO form. This applies to all the 1999 data given in this
sugar beet fungicide part.

L 110/36

EN

Official Journal of the European Union

16.4.2004

for

and

intends

(Spyrale)

fenpropidin

the market

this market',

that Novartis

trifloxystrobin,

difenoconazole

and thiabendazole (Tecto). There are four mixtures,
namely cyproconazole + carbendazim (Alto Combi),
cyproconazole + fentin acetate (Alto Bs), difenoconazole
+
+
propiconazole (Armure). Novartis sells its products in all
the ‘sugar beet countries'. Contrary to the information
in the CO Form indicating that ‘Novartis has no pipeline
investigation
products
to launch its new
shows
strobilurin,
a mixture with
[…]* in
cyproconazole. First sales are expected for
France and Italy and for […]* in Belgium, Greece, the
Netherlands and Spain. Novartis indicates that
‘total
yield and sugar yield (of the mixture) have been similar
to current standard treatments'. Nevertheless, it is clear
from the trifloxystrobin marketing plan that important
sales are expected, accounting for some[…]* of the total
EEA market value. Moreover,
the plan reveals that
Novartis considers its current leading EEA position […]*
to be sustainable over the long term as it plans to have
[…]* (41).

in

(229) AstraZeneca has four products containing flutriafol (one
straight and three mixtures of different combinations
with carbendazim) of which at
least one is sold in,
respectively, Belgium, France, Greece, Italy and Spain. In
Greece
a
chlorothalonil based product. AstraZeneca is due to
launch azoxystrobin (Amistar) for sugar beets in […]*
(according to the CO Form) or […]* (according to a
reply to a questionnaire) in Austria, Italy, Germany and
Greece. […]*.

additional marginal

sales

has

of

it

(230) The merger

creates

an overlap of

currently sold
products in France, Italy, Spain, Greece and Belgium. For
the reasons indicated below, the Commission considers
that the merger will lead in all these countries with the
to the creation of a dominant
exception of Greece,
position.

identify the producer(s)
1997 and 1998 do not
accounting for some [0 to 5]* % of the total market.
For 1999, the parties' figure of ‘unidentified' sales is [10
to 20]* %.

(232) According to the ITB (Institut Technique Français de la
Betterave Industrielle), the merged entity would have a
1998 market share of [60 to 70]* % (N [50 to 60]* %
+ AZ [10 to 20]* %) and [50 to 60]* % in 1999 (N
[50 to 60]* % + AZ [5 to 10]* %). In 1998, Dupont
would have a [20 to 30]* % market
share (no
information given for 1999). These estimates are based
upon some 500 replies that the Institute receives out of
2000 questionnaires sent out
to French sugar beet
farmers.

(233) However, the parties' (higher) estimates for their own
market shares have been confirmed by competitors, and
it is noteworthy that according to AstraZeneca's own
figures, its sales of the Anterès product (where the ITB
estimates a 0 % market share) are higher than the sales
of
to which the ITB attributes AstraZeneca's
total market share.

Impact

(234) The parties'

strength can also be seen from the
recommendations given by the ITB. For
the 1999
season, the ITB recommended five different products for
a single-treatment programme (used in some [10 to
20]* % of cases). Three of these products were from
Novartis, one from AstraZeneca and one from Dupont.
For the double-treatment programme (used in some [70
to 80]* % of cases),
the ITB recommended four
to choose from for each treatment and
products
recommended to alternate the products. Out of the four
T1 products,
from
AstraZeneca and one from Dupont. Out of the four T2
three were from Novartis and one from
products,
Sipcam.

from Novartis, one

two were

France

(231) According to the parties, the merged entity would have
market shares of [70 to 80]* % in 1997 (N [50 to 60]*
% + AZ [10 to 20]* %), [70 to 80]* % in 1998 (N [60
to 70]* % + AZ [5 to 10]* %) and [60 to 70]* % in
1999 (N [50 to 60]* % + AZ [10 to 20]* %). The next
is Dupont with estimated market of
competitor
respectively [10 to 20]* %, [10 to 20]* % and [10 to
20]* %. Sipcam has a [0 to 5]* % market share in
It may be noted that the parties' estimates of
1999.

(235) For the recommendations for use in the year 2000, out
of the five ‘single treatment' products, two are from
Novartis, two from Dupont and one from AstraZeneca.
For a two spray programme, out of
the five T1
products, two are from Dupont and one a piece from
Novartis, AstraZeneca and BASF. Out of the four T2
products, three are from Novartis and one from Sipcam.
However, two Novartis products are recommended ‘with
priority'. Other products that are on the market, and
that are not recommended at all, are Aventis' Castellan
S, Antarès (AstraZeneca), sulphur products (accounting
for [5 to 10]* % total sales according to the ITB, used
as a cheap powdery mildew treatment with very good
efficacy but only average persistence) and Microthiol
spécial (TotalElf).

(41) […]*

(236) Two new products are introduced on the French market
and included in the 2000 recommendations summarised

16.4.2004

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Official Journal of the European Union

L 110/37

above. These products are BASF's Monnaie (epoxico-
nazole + fenpropimorphe, identical in formulation to a
product called ‘Opus Team'
in cereals) and Dupont's
Initial (flusilazole + fenpropimorph, available in cereals
with different formulations, but in the same proportion).
It can thus be expected that Dupont may gain market
share and that BASF will achieve,
for the first time,
some sales on the French sugar beet fungicide market. It
must be noted, however,
is the
most expensive on the market without achieving the
best effect on powdery mildew, the key target disease
for the T1 spray for which it is recommended. The best
effect on powdery mildew is given by Novartis' Spyrale,
overall the best product on the market. Compared to
the other T1 recommendations, Punch CS is of similar
quality but available at half the price. Dupont's new
product
Initial has exactly the same efficacy and
persistence as its older product, Punch CS. However, it
is [5 to 10]* % more expensive, but still in the ‘low
price' segment.

that BASF's product

(237) The ITB considers BASF's KM + epoxiconazole mixture
to be the most important product to enter the French
market before 2005.
it provided excellent
In tests,
results on powdery mildew and rusts and good efficiacy
on cercosporiose (ramularia is becoming rare in France).

(238) However, Novartis

to

also

have

expects

its
trifloxystrobin + cyproconazole mixture launched in
France in […]* with expected sales in that year of EUR
[…]* million and EUR […]* million in […]*, giving it a
[10 to 20]* % market share. The mixture provides
comparable activity to the current market standards.
AstraZeneca has indicated that it does not intend to
develop its strobilurins in France. […]* In addition, as a
consequence of
the merger, azoxystrobin could be
combined with any of the other Syngenta triazoles (such
as cyproconazole).

(239) Novartis thus has a consistently high market share
(above [50 to 60]* %) and, according to its own
documents, this market share is sustainable over the
long term in view of
its
trifloxystrobin mixture.

the expected success for

be expected to be a strong product. This allows the
merged entity to develop similar distribution techniques
as indicated above for cereal fungicides.

(241) Therefore, the Commission considers that the operation
will lead to the creation of a dominant position on the
French sugar beet fungicide market.

Italy

(242) As was

for

Italy is

indicated above,

the years 1997 to 1999, account

the second most
important national market, with sales in 1997, 1998 and
1999 of respectively EUR […]*. Syngenta's products
would,
for
respectively [60 to 70]* % (N [20 to 30]* % + AZ [20
to 30]* % + [10 to 20]* % Novartis' products
distributed by Aventis), [50 to 60]* % (N [20 to 30]* %
+ AZ [20 to 30]* % + [5 to 10]* % Novartis' products
distributed by Aventis) and at least (42) [50 to 60]* %
(N [30 to 40]* % + AZ [10 to 20]* % (43)).

(243) The rest of the market is scattered between several local
and international producers such and Sipcam with [5 to
10]* %, Isagro [5 to 10]* % , Dow [5 to 10]* % , Bayer
[0 to 5]* %, Siapa [0 to 5]* % , Dupont [0 to 5]* %
and Caffaro [0 to 5]* %.

(244) According to Novartis' own marketing plans,

the
merged entity's strong position cannot be challenged by
the introduction of new competing products. Novartis
its difenoconazole
expects […]* the sales in Italy of
based products between 1999 and 2002 (from […]*) to
account for over [10 to 20]* % of the total market.
[…]* Novartis'
replacing the
trifloxystrobin mixture,
cyproconazole based products, will account for another
[10 to 20]* %. Therefore, Novartis expects to maintain
its[…]* market share. Even if AstraZeneca's flutriafol
based products were to lose some of its [10 to 20]* %
market share, this can be expected to be offset by the
introduction of Amistar,
current
Novartis' triazole.

[…]* or a

and,

(245) The Commission, therefore, considers that the merger
will lead to the creation of a dominant position on the
Italian sugar beet fungicide market.

(240) The merged entity will thus combine Novartis' strong
position with the addition of the third largest producer
(having more than a [5 to 10]* % market share) with
well-established products on the market and with a new
in combination
active substance (azoxystrobin)
with one of the triazoles of the merged entity, can also

that,

(42) Novartis indicates that Aventis has sales of [5 to 10]* % in 1999
from the sales of Novartis

that could, totally or partly, result
products.

(43) Calculated on the basis of using AstraZeneca's reply to the
questionnaire and multiplying this with the same factor ([20 to
30]* % increase) as results from the correlation between the AZ
reply for 1998 and the data in the CO Form.

L 110/38

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Official Journal of the European Union

16.4.2004

Spain

(246) According to the parties, the Spanish market was worth,
in the years from 1997 to 1999, between […]*. Novartis
is increasing its market share: [20 to 30]* % in 1997,
[30 to 40]* % in 1998 and [30 to 40]* % in 1999.
AstraZeneca's share has been stable at around [10 to
20]* %. The merged entity would thus account
for
some [40 to 50]* % of the market.

(247) Novartis'

increase has been at the expense of Dupont
that lost [5 to 10]* % market share (from [20 to 30]*
% to [10 to 20]* %). For the remaining [30 to 40]* %
of the market, no producer has been identified by the
parties.
It appears from the market investigation that
Bayer and Cyanamid have each around [0 to 5]* %
market share.

(248) Novartis also plans

to introduce its

trifloxystrobin
mixture in Spain in […]*, but no sales estimates are
available. However, further progress is expected from its
dinenoconazole based products, which are expected, by
themselves, to account for a [20 to 30]* % market
share by […]*. In addition, the other existing products
would still represent almost [5 to 10]* % in […]*. Thus,
even without
sales of
trifloxystrobin, Novartis considers that it will maintain a
[30 to 40]* % market share over the longer term.

into account

taking

the

(249) The merged entity would thus hold over the longer
term, with its existing products alone, around [40 to
50]* % of the market, namely [30 to 40]* % accounted
for by Novartis and the remainder with sales of
AstraZeneca's existing product (that accounts currently
for some […]*).
launch its
trifloxystrobin mixture. This can,
in keeping with the
expectations for other Member States, be considered to
account for at least […]* of the total market […]*. In
addition, the merged entity will have the possibility to
evaluate the potential for mixtures of azoxystrobin with
one of Novartis' successful molecules.

In addition, Novartis will

(250) On the basis of the merged entity's ability to maintain
its current market share of some [50 to 60]* %, the
Commission considers that the merger will lead to the
creation of a dominant position on the Spanish
sugarbeet fungicide market.

40]* % (1997), [40 to 50]* % (1998) and [40 to 50]* %
(1999). AstraZeneca has increased its market share from
1997 to 1998 from [30 to 40]* % to [30 to 40]* %.
The 1999 data, provided by Novartis (on behalf of both
parties) do not attribute sales in Belgium to any other
identified competitors (all being ‘unidentified'). From
AstraZeneca's sales figures for 1999, a market share of
at least [20 to 30]* % can be deduced. The merged
entity would thus account for a market share of [60 to
70]* % in 1997, [80 to 90]* % in 1998 and at least [60
to 70]* % in 1999.

(252) The only other competitors are Aventis and Dupont,

with around [5 to 10]* % each in 1998.

(253) The strength of the merged entity is clear from the fact
that
the seven
it would have five (4N+1AZ) out of
available active substances on the market. This strength
can be considered sustainable in view of the launch of
the trifloxystrobin mixture in Belgium in 2003 with
projected sales accounting for [40 to 50]* % of the
total market. The Novartis marketing plan reveals […]*.

(254) The Commission, therefore, considers that the merger
will lead to the creation of a dominant position on the
Belgium sugar beet fungicide market.

FUNGICIDES FOR VEGETABLES

(255) There are some 30 vegetable crops but

the diseases
affecting those crops and/or the products used to treat
these diseases are broadly similar.

(256) The parties estimate that

total EEA sales account

in
1998 for EUR […]* and Syngenta has an EEA wide
market share of[…]* [20 to 30]* % (N [10 to 20]* % +
AZ [5 to 10]* %). The largest national markets are,
according to the CO Form, Spain […]*, Italy […]* and
France[…]*.

Belgium

(251) The Belgian market accounts for EUR […]* and the
market investigation has confirmed the strength of the
parties to the merger on this market. According to the
parties' estimates, Novartis has a market share of [30 to

(257) According to the CO Form, the 1998 French market is
worth EUR […]* with Syngenta accounting for [30 to
40]* % (N [10 to 20]* % + AZ [10 to 20]* %) […]*
and Aventis […]* [30 to 40]* %. It can be noted that
the competitors have presented substantially different
estimates for the total market and for the market shares
and that
the parties' estimates for the 1999 market
differ considerably: Novartis estimates that the French
market accounts for EUR […]* (N [10 to 20]* % + AZ

16.4.2004

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Official Journal of the European Union

L 110/39

[5 to 10]* %) and AstraZeneca estimates a market size
of EUR […]*, giving itself […]* [10 to 20]* % (no
estimate being provided for Novartis).

(263) The Commission does not need to decide on the basis
of this evidence whether the notified operation would
lead to the creation of a dominant position, since any
competitive problems would be removed as a result of
the implementation of the commitments submitted for
the French market to treat botrytis on grapes.

(258) More detailed information on this market is found in an
internal AstraZeneca document of January 2000 that
prepares the launch of AstraZeneca's azoxystrobin in
the French vegetable market (brand name Ortiva). This
document gives (on the basis of panel data for the years
from 1996 to 1998)
the
‘competitors in value': […]*.

the following overview of

(259) According to this document, the 10 most important
brands account for [70 to 80]* % of total sales and
seven of these are distributed by the parties, four by
Novartis and three by AstraZeneca. The Novartis brands
are the leading brand (Acylon) and the numbers three
(Pulsan),
The
and
AstraZeneca brands are the numbers five (Sumisclex),
eight (Orzin) and nine (Sumico). BASF has the second
brand (Ronilan) and Aventis the fourth (Rovral). In the
reply, the parties state that the estimate for the size of
the total market underlying the figures presented in this
document are too low and that this has been confirmed
by the assessment of an independent French company.

(Dithane).

(Score)

seven

six

introduce azoxystrobin under

(260) As to the introduction of new products, AstraZeneca
will
the brand name
Ortiva, from February 2000 onwards in more and more
vegetable crops. It expects to achieve [20 to 30]* %
market share in nearly all crops and [10 to 20]* % for
the crops where botrytis is an issue. Overall, this should
give Ortiva a market share of [20 to 30]* %. As with
is an issue.
all
Accoridngly, Ortiva needs to be alternated with other
substances (Ortiva can be used for two sprays at most).
The broad portfolio of
the merged entity gives the
opportunity to combine the strength of Ortiva (its wide
range) with Novartis strong triazole fungicides. If the
projected future sales are expressed as a percentage of
the
size, Ortiva would
account for some [10 to 20]* % in […]*.

resistance management

current market

strobilurins,

‘corrected'

(261) The potential of newly introduced products of

the
[Competitors business

competitors
secrets]*.

is

rather

limited.

SWEDISH POTATO FUNGICIDE MARKET

(264) According to the CO form,

the Swedish market

[60 to 70]* % of

for
potato fungicides accounts for a turnover of EUR […]*
In 1997, AstraZeneca
in 1997 and […]* in 1998.
accounted for
the market with
fluazinam and Novartis had [20 to 30]* % with
(metalaxyl + mancozeb). Aventis had [5 to
Ridomil
10]* % with its newly launched Tattoo (propamocarb +
mancozeb), and American Cyanamid launched a new
product, Acrobat MZ (dimethomorph + mancozeb),
realising [0 to 5]* %.

(265)

In 1998 and 1999, Syngenta maintains a [80 to 90]* %
market share (AZ [50 to 60]* % + N [20 to 30]* %).
Both Aventis and American Cyanamid have a [5 to
10]* % market share each in these two years. The
market investigation has confirmed these estimates.

(266) Even if AstraZeneca's market

share has decreased,
Novartis' market share has increased. The introduction
of the products of Aventis and American Cyanamid in
1997 has thus not affected the parties' overall market
share.

(267) Furthermore,
product,
metalaxyl-M. The registration of
Ridomil MZ (a mixture between metalaxyl
mancozeb) […]*.

in 2000 Novartis has launched a new
fluazinam and
of
its other product
and

its mixture

Epok,

(268) Novartis has indicated that

the merger with AstraZeneca.

[…]* The decision was,
according to Novartis' reply of 28 March 2000, taken ‘a
few weeks ago', that is to say, after the announcement
of
therefore
considered that
the decision […]* may also be
influenced by the proposed operation as the merged
entity would have not so much to gain from […]* than
Novartis competing with AstraZeneca.

is

It

(262) Novartis' marketing plans estimate that

its products
would have a [20 to 30]* % market share in […]*.
AstraZeneca would add Ortiva (accounting for some [10
to 20]* %) and its current portfolio for which it has not
supplied a projection of the sales potential.

(269) The parties have indicated that new products such as
Dupont's famoxadone straight or mixed with cymoxanil,
straight or mixed, have
and Aventis'
a
to
similar
from the market
fluazinam. However,
the new
investigation that
products that competitors intend to have on the market

fenamidone,
ecotoxycological

the market shares of all

regulatory

appears

profile

it

L 110/40

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Official Journal of the European Union

16.4.2004

by 2003 are estimated to account by 2003 for less than
[10 to 20]* %.

(270)

In view of the high overall market share of the merged
entity [80 to 90]* %; the substantial addition ([50 to
60]* % + [20 to 30]* %); the introduction in 2000 of a
new Novartis product; and the limited market share
expectations for new products to be introduced on the
the Commission
market between now and 2003,
considers that the concentration will lead to the creation
of a dominant position on the Swedish potato-fungicide
market.

POWDERY MILDEW, DOWNY MILDEW AND BOTRYTIS
FUNGICIDES ON GRAPES

(271) Grapes are treated with between seven and 15 fungicide
sprays per season to control grape diseases. The most
important markets for fungicides used on grapes are
those for
the treatment of downy mildew (sales in
Europe of EUR […]*), powdery mildew EUR […]* and
grey mould EUR […]*.

Downy mildew

(272) For downy mildew, Aventis is the EEA market leader
with [20 to 30]* % and Syngenta would achieve [10 to
20]* % (N [10 to 20]* % + AZ [5 to 10]* %). On a
national level, Syngenta's market share is below [20 to
30]* % in 1999 and its main active ingredients
azoxystrobin from
(metalaxyl
below
AstraZeneca)
formulations based on cymoxanil
(Dupont) and ethyl
phosphite alumunium (Aventis).

from Novartis
realise

considerably

sales

and

Powdery mildew in Austria

(273) For powdery mildew, Syngenta would be market leader
at the EEA level with [30 to 40]* % (N [20 to 30]* %
+ AZ [5 to 10]* %) in 1998 and [20 to 30]* % (N [20
In 1998,
to 30]* % + AZ [5 to 10]* %)
Atochem accounted for [10 to 20]* % and Aventis,
Dupont, Bayer and BASF between [5 to 10]* % each. In
1999, Bayer had [10 to 20]* %, Atochem [5 to 10]* %,
Aventis [5 to 10]* % and BASF, Dow and Dupont each
below [0 to 5]* %.

in 1999.

(274) The only national market where Syngenta products
would have more than [30 to 40]* % is the Austrian

the smallest market

for powdery
market EUR […]*,
mildew. In Austria, Novartis accounted in 1999 for [30
to 40]* % ([20 to 30]* % with the triazole penconazol
and [5 to 10]* % with sulfur) and afaplant distributes
Novartis' pyrenifox realising [5 to 10]* %. Kwizda
(azoxystrobin) and
distributes AstraZeneca's Quadris
realised [5 to 10]* %. Syngenta substances thus account
for [40 to 50]* % of the market.

the

strobilurin

kresoxim-methyl,

(275) The closest competitor would be, according to the
parties, Agrolinz, distributing BASF's products (Discus,
containing
and
Kumulus, containing sulphur), with a [10 to 20]* %
market share. RAG has [5 to 10]* % with a sulphur
product, Cyanamid [5 to 10]* %, Bayer [5 to 10]* %
(of which the spiroxamin product accounts for [0 to
5]* %) and Aventis [0 to 5]* %. Afaplant distributes
another product, in addition to Novartis' pyrenifox, with
which it realises [0 to 5]* %. In the reply, the parties
indicate that Bayer's market share with its spiroxamin
product was [10 to 20]* % in 1999.

In

the

per

season.

interests

(276) As indicated above, there are between seven and 15
sprays
of
resistance-management, the number of sprays for several
classes are limited to a given number per season. Such
recommendations to limit use are made by the FRAC.
With regard to powdery mildew in grapes,
the
recommendations are to limit the use of DMI's such as
triazoles to four sprays per season. Also strobilurins
should be limited to a maximum of two out of seven
sprays, three out of eight to 11 sprays and four out of
12 or more sprays. Strobilurins should be preferentially
alternated with fungicides of another class.

for

the

the

spray

triazole,

triazoles

limitations

(277) The parties are in the unique position to be able to offer
to the farmer sulphur, triazoles and strobilurins. Having
a complete powdery mildew package enables them to
use
and
strobilurins to their own benefit. This can be done, for
instance, by using the strength of Novartis' Topaz, with
[20 to 30]* % of the total market by far the most
popular
to push azoxystrobin, which is
generally recognised as technically the weaker powdery
BASF's
mildew
kresoxim-methyl. This is particularly feasible in Austria
as
as
kresoxim-methyl ([5 to 10]* % market share each). For
the remaining sprays, sulphur can be offered.
In the
reply, the parties indicate that because azoxystrobin is
technically weaker than most of the powdery mildew
products for vines available to growers, azoxystrobin
would not be the first choice of growers that need to
manage vine powdery mildew epidemics. They suggest
therefore, not work for
that such a strategy could,

azoxystrobin

strobilurin

compared

currently

‘popular'

to

as

is

16.4.2004

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Official Journal of the European Union

L 110/41

azoxystrobin. However, such a strategy is explicitly
envisaged by Novartis
its
for
trifloxystrobin[…]*, for which it plans to capture a [20
to 30]* % market share by 2005.

the introduction of

the combined entity,

(278) The Commission considers that,
share of

in view of the high
market
the unique
position for offering a complete powdery mildew
of
package
trifloxystrobin, the merger will lead to the creation of a
dominant position on the Austrian market for powdery
mildew in grapes.

forthcoming

introduction

and

the

Botrytis

(279) Botrytis is,

in value terms, the smallest of the three
grape-disease markets, with EEA sales of EUR […]* in
1999. Syngenta would be market leader on the EEA
level with [30 to 40]* % (N [20 to 30]* % + AZ [10 to
20]* %). Aventis accounts for [30 to 40]* %. The other
(bigger) competitors are Cyanamid ([5 to 10]* %), Bayer
[5 to 10]* %) and BASF [5 to 10]* %) .

(280) By far the largest national market is France EUR […]*,
followed by Italy EUR […]*. The other national markets
are Germany […]*, Spain […]*, Portugal […]*,Greece
[…]* and Austria […]*. Both parties' products are sold
in France, Portugal, and Austria.

(284) Aventis sells two substances, being the market leader
pyrimethanil (Scala) and iprodione (Rovral). The other
competitors each sell one product. The parties argue
that the main advantage of Aventis' pyrimethanil ([20 to
30]* % market share) is that it is granted an import
tolerance status in the USA and that sales are still
growing. However, such predicted growth will not be at
the expense of at least Novartis' portfolio, as its internal
marketing documents also foresee further growth.
In
addition,
the recently introduced fluazinam is also
expected to reach a [5 to 10]* % market share. It can,
therefore, be concluded that the merged entity's market
share is sustainable over the longer term.

(285) The merged entity will have a large product portfolio at
its disposal. This will give Syngenta ample opportunities
to position its products ideally vis-à-vis Aventis'
two
products. Furthermore, two of its products are recently
introduced.

(286)

the combined high market share of

the
In view of
parties, the large portfolio of products, the fact that two
of
those products are recently introduced and have
important chances for further growth, the Commission
considers that the notified operation will
lead to the
creation of a dominant position on the French botrytis
market.

(281) For the reasons indicated at recitals 282 to 288, the
Commission considers that the merger will lead to the
creation of a dominant position on the French and
Austrian market.

The Austrian botrytis market

The French botrytis market

(282) The merged entity would account for [50 to 60]* % (N
[20 to 30]* % + AZ [20 to 30]* %) of this […]*
market. The next competitor is Aventis with [30 to
40]* %. Philagro, BASF and Bayer have each [0 to 5]*
% or less.

(287) Novartis is the clear market leader with its Switch brand
accounting for [50 to 60]* %. Sales of AstraZeneca's
chlorothalonil based product (Provin) by the Austrian
formulator/distributor Kwizda account for another [5 to
10]* %. The merged entity would thus have [50 to
60]* %. The next competitor is Bayer with [10 to 20]*
%, and Agrolinz, Aventis and Cyanamid each have
below [5 to 10]* %. One competitor
to
introduce a new product before the end of 2003 on the
market. However, no sales projections have been
provided.

intends

(283) Out of the 10 products on the market,

five will be
distributed by the merged entity. Novartis sells straight
fludioxonil mixed with
fludioxonil
cyprodinil
third party
substances, two of Sumitomo (Sumisclex and Sumico)
and ISK's fluazinam for which it has acquired far
reaching European distribution rights.

(Geoxe)
(Switch). AstraZeneca

sells

and

(288) Therefore, the Commission considers that the notified
lead to the creation of a dominant

operation will
position on the Austrian botrytis market.

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Official Journal of the European Union

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C.3 HERBICIDES

MAIZE HERBICIDES

Maize cultivation and weed control

(289) Maize cultivation is an important agricultural activity in
Europe. An major factor in maize cultivation is the
extent to which farmers are able to control the weed
infestations that influence the crop yield. Unsuccessful
or only partly successful treatments in maize cultivation
could result in yield losses in the range of [20 to 30]*
%. There are some factors specific to the maize crop
that
can be
controlled.

the way in which weeds

influence

treatments only is, however, not an option, as they
would result in excessively high yield losses in maize
cultivation.
the principal
dividing line in maize is between early post-emergence
products and post-emergence products in the strict
sense of the term (44).

In the northern countries,

(293) The differences between maize herbicide programmes in
in fact, also related to the
the EEA countries are,
registration status of
the various active substances.
Where the traditionally important and cost effective
registered
broad spectrum herbicide atrazine is still
(France and Spain),
it is used on the vast majority of
maize fields, either straight or in mixes, to increase the
performance of the treatment programme. Among the
traditional graminicides,
the acetalinides (metolachlor,
alachlor, dimethenamid, acetochlor, flufenacet), alachlor
is banned in Germany and Italy and acetochlor
is
registered only in Spain and France. Also, where
atrazine is banned (Germany,
the Netherlands,
Denmark), growers tend to use more post-emergence
products, in particular for broadleaf control.

Italy,

In the

(290) The maize crop is a crop that develops slowly compared
early
surrounding weed plants.
with the
development stages of maize,
these weeds
have a particularly negative impact on maize growth, as
they take lots of nutrients and sunlight away from the
young maize crop. For this reason, the competition for
nutrients and sunlight caused by weeds has to be
eliminated, especially during the early development
stages of maize.

therefore,

(294)

In general,
it appears that in all of the major maize
growing countries of Europe there is an increasing weed
pressure and a growing diversity of weed infestations
from annuals
(grasses and broad leaf weeds) and
perennials. As a result, the weed control strategies in
maize are becoming more complex. Often, the strategies
require
and
post-emergence products to control both grasses and
tend to
broad leaf weeds. Consequently,
implement a broad non-focused weed-control strategy,
on the basis of broad spectrum products and mixtures
of different products.

combined

farmers

both

pre-

use

the

of

the use of herbicides.

(291) Soil and climatic reasons influence growing maize and
the weed
the situation, spectrum and dynamics of
In the
population and, hence,
south of Europe, temperatures from the sowing date
onwards will statistically provide a faster growing of the
crop, so that the period in which it is critical for the
farmer to control weed competition will be shorter. In
is an
such circumstances, pre-emergence treatment
adequate way of controlling weeds. For this reason, a
majority of farmers in countries like France and Italy
the practice of pre-emergence application of
adopt
herbicides
if needed, by post-emergence
followed,
herbicide application.

(292)

In the north of Europe, the situation is slightly different.
The northern regions are likely to get longer mid-warm
periods from sowing onwards, resulting in a slower
crop growth, longer periods before the crop covers the
fields and an increased likelihood of ‘reflushes' of weeds
early
In
during
post-emergence treatments (before the appearance of
four to five maize leaves) are optimal. As a result,
in
countries such as Germany and the Netherlands such
early post-emergence treatments are practised to a
considerable extent. Relying on later post-emergence

situations,

period.

such

this

European maize herbicide markets and parties' market
shares

(295) The European maize herbicide market is a large market
with sales accounting for EUR […]*. In the EEA, it is

treatments. This holds

treatments are often no different

(44) This is also illustrated by the fact that the products used in early
than the
post-emergence
products used in pre-emergence
for
example for the chemical class of acetanilides (alachlor, acetochlor,
commonly
metolachlor, dimethenamid,
referred to as a pre-emergence herbicide class, although [10 to
20]* % is
treatments.
in
Post-emergence treatments
sense are typically
applied from 4 to 10 weeks after planting. Typical products
applied in post-emergence include sulcotrione, rimsulfuron and
nicosulfuron.

early
in the proper

flufenacet), which is

post-emergence

applied

16.4.2004

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Official Journal of the European Union

the second most important herbicide market, after the
market for herbicides in cereal crops. Within the EEA,
three countries account for roughly [70 to 80]* % of
the
sales of maize herbicides: France EUR […]*,
Germany EUR […]* and Italy EUR […]*. Austria, the
three maize herbicides
Netherlands and Spain are
markets of about equal size EUR […]*. Other, smaller
markets are Belgium, Portugal, Greece, Denmark and the
Sweden,
United
Luxemburg, Norway,
the
cultivation of maize crops is economically insignificant,
and hence the use of maize herbicides is insignificant as
well.

Iceland and Liechtenstein,

Kingdom.

Finland,

Ireland,

In

(296) For maize herbicides in the EEA, the parties estimate
that they command a [40 to 50]* % market share (N
[20 to 30]* % + AZ [10 to 20]* %) with sales of EUR
[…]*, with variations on a national market basis [30 to
40]* % in Austria up to [60 to 70]* % in the
Netherlands. Competitors have provided data
that
broadly confirm the parties' EEA estimates. The
following table gives a detailed overview of the market
shares on a per country basis (45).

Market share data for maize herbicides — 1998

(%)

Novartis

AstraZeneca

Total

Austria

[30-40]*

[30-40]*

Belgium

[20-30]*

[30-40]*

[50-60]*

Denmark

[40-50]*

[40-50]*

France

[20-30]*

[20-30]*

[50-60]*

Germany

[30-40]*

[5-10]*

[40-50]*

Greece

[30-40]*

[5-10]*

[30-40]*

Italy

[20-30]*

[10-20]*

[30-40]*

Netherlands

[30-40]*

[30-40]*

[60-70]*

Portugal

[10-20]*

[20-30]*

[30-40]*

Spain

[20-30]*

[10-20]*

[30-40]*

(45) All figures contained in these tables have been rounded to the
nearest one percent. This explains why the sum of the figures in
the first and the second column does not always seem to equal the
total in the third column. In the countries that are not mentioned
Ireland, Sweden, Luxemburg, Norway,
in the table (Finland,
Iceland,
is
the
Liechtenstein),
insignificant. In Austria [5 to 10]* %, Greece [0 to 5]* % , Italy [0
to 5]* % and France [0 to 50]* %, Novartis and AstraZeneca have
additional sales through third parties. Even though comparatively
small, these figures have been included in the above market share
data

cultivation of maize

crops

L 110/43

(%)

Novartis

AstraZeneca

Total

United
Kingdom

[40-50]*

[40-50]*

EEA

[20-30]*

[10-20]*

[40-50]*

(297)

In the EEA as a whole, Aventis occupies the second
place, with an EEA-wide market share of about [10 to
20]* % (variations on a national market basis vary from
[0 to 5]* % in Belgium to up to [20 to 30]* % in
Austria). Other main players are BASF with a market
share of [5 to 10]* %, Dupont, Monsanto and American
Cyanamid (each with slightly lower figures) and Bayer
and Dow with considerably lower market shares.

(298) For 1999, total maize herbicide sales in the EEA have
remained at about the same level as the year before,
EUR […]*. From the preliminary information available
to the Commission, it appears that the combined market
share of the parties in the EEA has remained about the
same as well, [40 to 50]* %. Novartis lost market share
(from [20 to 30]* % to [20 to 30]* %), but
AstraZeneca gained market share (from [10 to 20]* %
to [10 to 20]* %).

(299) As was

recital 295,

indicated at

the three most
important national maize herbicide markets are France,
for almost [70 to
Germany and Italy. They account
80]* % of total maize herbicide sales in the EEA. These
markets are the best documented and will be described
in more detail.
In addition to these three national
markets, a short description will also be given of the
smaller national markets where the concentration will
lead to the creation or strengthening of a dominant
position.

French maize herbicide market

(300)

In France, the parties estimate that total maize herbicide
sales in 1998 were worth about EUR […]*. According
to their estimate, they had a combined market share of
[50 to 60]* % (N [20 to 30]* % + AZ [20 to 30]* %),
BASF had [5 to 10]* % and Aventis [5 to 10]* %. No
information
other
competitors. According to the replies of the competitors
that were consulted during the Commission's market
investigation (BASF, Aventis, Bayer, DuPont, Dow and
American Cyanamid), the total market size in 1998 was
probably a little higher than the parties' own estimate.
Only one firm indicated a market value below the

provided

been

has

the

on

L 110/44

EN

Official Journal of the European Union

16.4.2004

the market share of
parties' estimate. On this basis,
Syngenta would be somewhat lower than the indicated
[50 to 60]* %,
in the range of [40 to 50]* %. The
market investigation has confirmed the market shares
given for BASF and Aventis and has identified market
shares of [10 to 20]* % for Monsanto, [5 to 10]* % for
DuPont, [5 to 10]* % for American Cyanamid, [0 to
5]* % for Dow and [0 to 5]* % for Bayer.

somewhat higher than the parties' estimate, about [30
to 40]* %. According to the market
investigation,
Aventis had about [10 to 20]* %, DuPont [5 to 10]* %,
American Cyanamid [5 to 10]* %, Dow [0 to 5]* %
and Bayer [0 to 5]* %. The market role of BASF in Italy
is minor.

(301) From the preliminary information available to the
Commission it appears that the combined market share
of
in
the parties in France has increased somewhat
1999, from [50 to 60]* % to [50 to 60]* %. Novartis
lost market share (from [20 to 30]* % to [20 to 30]*
%), but AstraZeneca gained market share (from [20 to
30]* % to [20 to 30]* %).

(305)

it appears from the preliminary information
In 1999,
available to the Commission that the combined market
share of the parties has decreased somewhat, from [30
to 40]* % to [20 to 30]* %. Novartis lost market share
(from [20 to 30]* % to [10 to 20]* %), and so did
AstraZeneca (from [10 to 20]* % to [10 to 20]* %).

German maize herbicide market

Smaller maize herbicide markets

The

competitors.

(302) The parties estimate that in 1998 total maize herbicide
in Germany were worth about EUR […]*.
sales
According to their estimate,
they had a combined
market share of [40 to 50]* % (N [30 to 40]* % + AZ
[5 to 10]* %), BASF had [10 to 20]* % and Aventis [10
to 20]* %. No information has been provided on the
other
Commission's market
investigation indicates that the total market size in 1998
than the parties' own
was probably a little higher
estimate. On this basis, the market share of Syngenta
would be somewhat lower than the parties' estimate,
about [40 to 50]* %. The indicated market share of [10
to 20]* % for BASF is accurate, but Aventis'market
share is lower, at about [5 to 10]* %. The market
investigation has further identified market shares of [5
to 10]* % for DuPont, [5 to 10]* % for Bayer, [5 to
10]* % for American Cyanamid, [0 to 5]* % for Dow
and [0 to 5]* % for Monsanto.

(303)

it appears

In 1999,
from preliminary information
available to the Commission that the combined market
share of the parties has decreased somewhat, to [40 to
50]* %. Novartis lost market share (from [30 to 40]* %
to [30 to 40]* %), but AstraZeneca gained market share
(from [5 to 10]* % to [10 to 20]* %).

Maize herbicide market in Italy

(304) The parties estimate that

in 1998 total sales in the
Italian maize herbicide market were some EUR […]*.
According to their estimate, Syngenta had [30 to 40]*
% (N [20 to 30]* % + AZ [10 to 20]* %) and Aventis
[10 to 20]* %. No information has been provided on
the other competitors. According to the Commission's
market investigation, the total market size in 1998 was
probably a little below the parties' own estimate. On the
basis of this, the market share of Syngenta would be

(306)

In the Netherlands, the parties estimate that the 1998
maize herbicide market was worth EUR […]* and that
Syngenta would have a [60 to 70]* % market share (N
[30 to 40]* % + AZ [30 to 40]* %). BASF has a [10 to
20]* % market share, Aventis [10 to 20]* %. The
market investigation broadly confirms these figures. In
1999, it appears that the combined market share of the
parties was about the same: [60 to 70]* % (N [20 to
30]* % + AZ [30 to 40]* %).

(307)

(308)

In Belgium, the parties estimate that the total market in
1998 was worth about EUR […]*, of which Syngenta
held a [50 to 60]* % market share (N [20 to 30]* % +
AZ [30 to 40]* %). BASF would have a [10 to 20]* %
market share and Aventis [0 to 5]* %. These estimates
investigation. Other
are
competitors identified by the market investigation are
DuPont ([10 to 20]* %), American Cyanamid [5 to
10]* % and Monsanto [5 to 10]* % .
it
appears that the combined market increased to [50 to
60]* % (N [20 to 30]* % + AZ [30 to 40]* %).

confirmed by the market

In 1999,

shares

[…]*. However,

In Austria ([30 to 40]* %), Denmark ([40 to 50]* %)
and the United Kingdom ([40 to 50]* %) Novartis had
large market
given that
AstraZeneca was hardly present in those countries in
those markets are not affected by the
that year,
concentration. Whilst the market share and the overlap
for the Portuguese market is substantial ([40 to 50]* %,
namely N [20 to 30]* % + AZ [10 to 20]* %), the
Commission does not need to decide on the basis of this
evidence whether the notified operation would lead to
the
any
competitive problems would be removed as a result of
the implementation of the commitments submitted for
the national maize herbicide markets where the merger
is found to lead to the creation of a dominant position.

a dominant position,

creation of

since

16.4.2004

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Official Journal of the European Union

L 110/45

(309) The high market shares that the new combination will
have, both on an EEA-wide level ([40 to 50]* %) and in
France, Germany, the Netherlands and Belgium (where
the parties' positions overlap), as well as the fact that
the new entity will be at least four times as large as its
next competitor from an EEA-wide perspective, strongly
suggest
lead to the
the merger operation will
creation of a dominant position in the markets for
maize herbicides in the countries in question.

that

(310) This

by

corroborated

conclusion is

the market
investigation among customers, competitors, consultants
and farmers' associations. A substantial number of the
respondents have expressed concern as to the future
market position of the new entity in the domain of
maize herbicides. All comments point to the fact that
the already strong position of the parties in terms of
shares will be cemented by a strong and
market
in all
ubiquitous presence of
segments of the maize herbicide market: pre-emergence
and post-emergence, grass weed control and broadleaf
weed control.

the parties' products

the markets,

through the

(311) As indicated in the section on the determination of the
relevant product markets, broadleaf weed herbicides are
no realistic substitute for graminicides, or vice versa. It
existence of broadspectrum
is only
products that there is any competitive link between the
two extremes of
the main competitive
constraints are, however, imposed within the respective
segments of grass control and broadleaf control. In the
application,
decision
pre-emergence or post-emergence, it also transpires that
the relationship between the two available products,
pre-emergence and post-emergence herbicides,
is not
always just one of substitutability, but also one of
complementarity. Even in terms of timing, therefore, the
main competitive constraints are imposed within the
respective
and
post-emergence control.

pre-emergence

segments:

control

timing

the

the

on

of

(312)

In order to conduct a proper analysis of the competitive
impact of the merger between the parties it is necessary
to consider also what strength the parties will have in
each of the respective segments. Furthermore, in view of
the segments
the partly complementary nature of
involved,
perspective
(grass/broadleaf) and from a time perspective (pre/post),
to which the
it
parties have strong positions in all of the segments.

is necessary to consider the extent

from a

control

both

The four segments in maize weed control

(313) Syngenta will have an ‘ideal' range of products that fully
covers
the grass and broadleaf weed control and
provides solutions in both pre- and post-emergence
seen from a
is particularly well
control. This
comparison of Syngenta's range of active substances
with the body of all important active substances that are
available in the market or will become widely available
s-metolachlor,
in
isoxaflutole, mesotrione). The following table provides
such a comparison. It is compiled from the parties' and
respondents' submissions.
it covers all
active substances of which the parties have indicated
that they are leading in the control of at least one of the
30 most
broadleaf weeds
grass
encountered in Europe (46), (47).

In particular,

(acetochlor,

important

future

near

and

the

(meadow grass). The most

(large crabgrass), Setaria spp.

(46) According to the parties, the most important perennial grasses are
Elymus repens (couch grass), Cynodon dactylon (bermuda grass) and
Sorghum halepense (Johnson grass). The most
important annual
grass weeds are Avena fatua (wild oat), Alopecurus myosuroides
(blackgrass), Apera spica-venti (loose silky bent), Lolium multiflorum
(Italian rye grass), Echinochloa crus-galli (barnyard grass), Digitaria
(foxtail), Panicum spp.
sanguinalis
(Panicum), and Poa spp.
important
perennial broadleaf weeds are Convolvulus arvensis (field bindweed),
Cirsium arvense (Canada histle) and Rumex obtusifolius (round leaved
dock). The most important annual broadleaf weeds are Amaranthus
retroflexus (pigweed), Chenopodium album (common lambsquarters),
Mercurialis annua (annual mercury), Galium aparine
(cleavers),
(Geranium), Lamium pupureum (red deadnettle),
Geranium spp.
Matricaria spp. (mayweeds), Papaver rhoeas (field poppy), Polygonum
spp. (knotweeds), Capsella bursa pastoris (Shepherd's Purse), Sinapis
(Charlock), Solanum nigrum (black nightshade), Stellaria
arvensis
media (chickweed), Veronica spp.
(speedwells) and Viola arvensis
(field pansy).

(47) In their reply to the statement of objections, the parties maintain
that isoxaflutole (Aventis)
is a broadspectrum herbicide; Aventis
itself, however, considers it to be a broadleaf herbicide (and so do
the competitors that discuss isoxaflutole). The parties consider
terbuthylazine (generic)
to be a broadleaf herbicide; certain
the British Crop
competitors and the Pesticide Manual of
Protection Council classify it as a broad spectrum herbicide. The
parties consider rimsulfuron (DuPont) to be a broad spectrum
herbicide; Dupont, however, submits that it is a graminicide. In
their reply to the statement of objections,
the parties further
present nicosulfuron as broad spectrum herbicide. AstraZeneca,
however, has classified it as a graminicide in its
reply to
Commission question 2ph2, q49 and in its internal documents
(e.g. in the ABR product briefings ). This view is confirmed by the
Pesticides Manual and the Farm Chemicals Handbook 2000. The
parties also maintain that some more active substances of the
competitors should be included as they will be introduced in the
years to come. In the Commission's view, these substances should
not be included, as their introduction date is not expected in the
two-three years to come or because they cannot be considered
the companies' market
important enough (on the basis of
expectations for these substances).

L 110/46

EN

Official Journal of the European Union

16.4.2004

Active substances of importance in the EEA

Graminicides

Broad spectrum herbicides

Broadleaf herbicides

Novartis:
atrazine (g)
terbuthylazine (g)

PRE
(or early post)

Novartis:
metolachlor (g)
s-metolachlor

AstraZeneca:
acetochlor

Monsanto:
acetochlor
alachlor (g)

BASF:
dimethanamid

Bayer:
flufenacet

POST

AstraZeneca:
nicosulfuron (ISK)

Novartis:
atrazine (g)
terbuthylazine (g)

DuPont:
thifensulfuron

(Aventis:)
nicosulfuron (ISK)

(BASF:)
nicosulfuron (ISK)

Novartis:
terbutryn (g)

AstraZeneca:
mesotrione

AmCy:
pendimethalin

Dow:
metosulam

Aventis:
isoxaflutole
aclonifen

Novartis:
dicamba (g)
pyridate
prosulfuron
primisulfuron

AstraZeneca:
sulcotrione
mesotrione

BASF:
2-4D (g)
bentazone

DuPont:
thifensulfuron

Aventis:
bromoxynil (g)

Dow:
clopyralid
fluroxypyr
metosulam

g !

active substance also produced by generic producers (Europe);
produced by generic producers, it is not necessarily the case that these producers can also sell formulated products.

it must be noted that even when a substance is

ISK ! nicosulfuron is the property of ISK. AstraZeneca is the main distributor for ISK in the EU; it has distribution rights
the United Kingdom (exclusively), Spain (with Aventis), Greece

Italy (exclusively),

for France (with Aventis),
(exclusively) and Portugal (exclusively) […]*.

(314) As for the strength of the individual active substances on which AstraZeneca's and Novartis
products are based, the parties and their competitors have been asked to indicate which substances
are the most effective on the key weeds in European maize cultivation (48). From this survey
(included in the statement of objections) it transpires that the leading herbicide products in maize
are based, or will be based, on the following active substances:
in pre-emergence, acetochlor
(AZ/Monsanto), (s-)metolachlor (N), mesotrione (AZ), isoxaflutole (Aventis) and in post-emergence:
sulcotrione (AZ), mesotrione (AZ), nicosulfuron (ISK/AZ/Aventis/BASF) and dicamba (N/generic).
From the analysis of Syngenta's herbicide portfolio it becomes apparent that its portfolio is unique
in terms of both the number and scope of leading active substances for effective weed control in
maize. Furthermore, their portfolio will contain at least four other important active substances,
namely pyridate, prosulfuron, atrazine and terbuthylazine.

(48) Based on the aforementioned 30 important weeds, the parties (Novartis) and their competitors have provided a

further categorisation of weeds as a function of their economic importance.

16.4.2004

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Official Journal of the European Union

L 110/47

Current market shares of the parties in the respective segments

shares

(315) The extent to which the effectiveness of the parties' current products on key weed species translates
into market
in the respective segments, grass weed control and broadleaf control,
pre-emergence and post-emergence is indicated in the tables contained in recitals 316, 317 and 318.
The market shares are given for the year 1999 and are obtained for grass weed control by adding
up the sales in graminicides and broadspectrum herbicides and for broadleaf control by adding up
the sales in broadspectrum herbicides and broadleaf herbicides (49).

(316)

In the EEA as a whole, the new entity will have the following positions in the distinguishable
segments:

EEA

Grass weed control

Broadleaf weed control

pre-emergence

post-emergence

[30-40]* %
(N [20-30]* %,
AZ [0-5]* % of
EUR […]*)

[40-50]* %
(N [10-20]* %,
AZ [20-30]* % of
EUR […]*)

N [30-40]* %
(N [20-30]* %,
AZ [5-10]* % of
EUR […]*)

[30-40]* %
(N [30-40]* %,
AZ [0-5]* % of
EUR […]*)

[50-60]* %
(N [20-30]* %,
AZ [30-40]* % of
EUR […]*)

N [40-50]* %
(N [20-30]* %,
AZ [20-30]* % of
EUR […]*)

P [20-30]* %
(N [20-30]* %,
AZ [0-5]* % of
EUR […]*)

P [50-60]* %
(N [20-30]* %,
AZ [30-40]* % of
EUR […]*)

insgesamt: [40-50]* %
(N [20-30]* %,
AZ [10-20]* % of
EUR […]*)

(317)

In the largest national market, France, the new entity will attain the following positions:

FRANCE

Grass weed control

Broadleaf weed control

pre-emergence

post-emergence

[20-30]* %
(N [20-30]* %,
AZ [0-5]* % of
EUR […]*)

[90-100]* %
(N [10-20]* %,
AZ [5-10]* % of
EUR […]*)

N [30-40]* %
(N [20-30]* %,
AZ [10-20]* % of
EUR […]*)

[20-30]* %
(N [20-30]* %,
AZ [0-5]* % of
EUR […]*)

[70-80]* %
(N [20-30]* %,
AZ [50-60]* % of
EUR […]*)

N [60-70]* %
(N [20-30]* %,
AZ [30-40]* % of
EUR […]*)

P [20-30]* %
(N [20-30]* %,
AZ [0-5]* % of
EUR […]*)

P [70-80]* %
(N [20-30]* %,
AZ [50-60]* % of
EUR […]*)

total maize:
[50-60]* %
(N [20-30]* %,
AZ [20-30]* % of
EUR […]*)

(49) The figures have been provided by Novartis based on its datasource, Impact. Due to the fact that some products are
double counted (notably broad spectrum products but also products that can be used both pre and post), the
figures do not add up.

L 110/48

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Official Journal of the European Union

16.4.2004

(318)

In the second largest national market, Germany, the new entity will have the following positions in
the distinguishable segments:

GERMANY

Grass weed control

Broadleaf weed control

pre-emergence

post-emergence

[50-60]* %
(N [50-60]* %,
AZ 0 % of
EUR […]*)

[30-40]* %
(N [30-40]* %,
AZ 0 % of
EUR […]*)

N [40-50]* %
(N [40-50]* %,
AZ 0 % of
EUR […]*)

[50-60]* %
(N [50-60]* %,
AZ [0-5]* % of
EUR […]*)

[40-50]* %
(N [20-30]* %,
AZ [10-20]* % of
EUR […]*)

N [40-50]* %
(N [30-40]* %,
AZ [10-20]* % of
EUR […]*)

P [60-70]* %
(N [60-70]* %,
AZ 0 % of
EUR […]*)

P [40-50]* %
(N [20-30]* %,
AZ [10-20]* % of
EUR […]*)

total maize:
[40-50]* %
(N [30-40]* %,
AZ [10-20]* % of
EUR […]*)

(319)

is

tremendously strong.

It follows from the above tables that the parties' combined position is not just very strong in the
overall maize herbicide market, but that it is in fact, very strong in all of the four segments of it:
pre-emergence grass control, post-emergence grass control, pre-emergence broadleaf control and
post-emergence broadleaf control. In some countries, the parties' position in one or more of the
segments
for
post-emergence grass control
is accounted for by either AstraZeneca (with nicosulfuron) or
Novartis (with atrazine). In post-emergence applications as a whole, still [70 to 80]* % is held by
the parties. In Germany, Novartis has a particularly strong position in pre-emergence applications
(with its broad spectrum products based on metolachlor, terbuthylazine and pyridate); AstraZeneca
is not present in Germany, not yet, at least. In the Netherlands (not indicated in the form of a
table), the parties will have [50 to 60]* % in the segment of grass control and [60 to 70]* % in
broadleaf control. In Belgium, the parties will have [60 to 70]* % in post-emergence broadleaf
control, in Austria [40 to 50]* % in pre-emergence grass control.

[90 to 100]* % of

for example,

In France,

sales

(320)

In addition to the current strong market positions that the parties have, the parties also have three
major new, or recently introduced, products that are likely to further strengthen the parties'
positions: acetochlor, s-metolachlor and mesotrione.

Parties' new products in pre-emergence grass weed control

(321)

In the new entity's maize herbicides portfolio there are two major pre-emergence maize substances
for the control of grass weeds that have been recently introduced or that will be introduced in the
near future: acetochlor and s-metolachlor.

A c e t o c h l o r

(322) The registration of the active substance acetochlor in Europe is shared between AstraZeneca and
Monsanto. At the moment, acetochlor-based products are being marketed only in Spain (since
1995) and in France (since 1999). Other markets are to follow, in particular Germany and Italy in
[…]*. The market investigation has shown that acetochlor has the potential of becoming an
important product in Europe, just as it has become an important product in the United Kingdom.
In the America maize herbicide market, it has captured a [10 to 20]* % market share, largely by
replacing the once leading product alachlor of Monsanto (50). It is expected that this substitution of
alachlor by acetochlor will also occur in Europe. Alachlor is currently registered for the use in

(50) Acetochlor and alachlor belong to the same chemical class, the acetalinides (to which also metolachlor, flufenacet
and dimethenamid belong). Acetochlor has a generally better efficacy in weed control than alachlor. Acetochlor is
also reported to be a better solution to the farmer than dimethenamid and flufenacet. Acetochlor and metolachlor
are both considered best in their class.

16.4.2004

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Official Journal of the European Union

L 110/49

maize in France, Italy, Portugal and Spain. In France, the
largest maize market, alachlor sales were worth about
EUR […]*, leading to a [10 to 20]* % market share in
maize. In Italy, the third largest maize market, alachlor
sales were about EUR […]* or [10 to 20]* % market
share. The share of acetochlor is therefore expected to
grow significantly in the Community (51).

(323) The fact that the registration of the active substance
acetochlor in Europe is shared between AstraZeneca and
Monsanto is related to the following. Although the
potential of acetochlor was recognised as early as the
mid-1980s, its commercialisation was delayed for many
years owing to technical problems with the related
safeners. Safeners are chemicals which are incorporated
in some herbicide formulations to reduce the activity of
the herbicide on the crop and reduce the risk of damage
to the crop. In this sense, safeners are the means to
introduction of herbicides,
make possible the market
which otherwise would not be brought
to market,
owing to the potential for phytotoxic damage to the
crops. Safeners are difficult to discover, take many years
to develop and involve significant costs in field testing
and regulatory studies (52).

(324) Because of patent issues and the substantial cost and
complexity of generating the data packages necessary
regulatory
for obtaining
for both
approvals
the
acetochlor and the
related safener, Monsanto and
Zeneca entered into an agreement for the registration of
acetochlor-based products. This partnership has been
able to obtain registrations acetochlor products in Spain
(one for AstraZeneca with its safener dichlormid and
one for Monsanto with its safener MON 4660) and in
France, but in the latter country the registration has
containing
given
been
AstraZeneca's
to
Monsanto, it is unlikely that it will have an own safener
that is registerable in France and the other countries
ready by [Monsanto business secret]*. This situation
basically puts AstraZeneca in full control as far as
acetochlor in Europe is concerned (53).

product
dichlormid. According

only
safener

the

for

(51) As another reference, it can be noted that acetochlor achieved a
[10 to 20]* % market share during the first year of launch in
Hungary and even [20 to 30]* % in the Czech Republic.

(52) Registration packages for safeners also enjoy data protection.
According to AstraZeneca (AZ reply to 4ph2, q15), this affects the
safener for acetochlor in particular as the large scale trials are too
expensive to replicate, constituting an entry barrier.

(53) [Monsanto business secret]*

S - m e t o l a c h l o r

(325) S-metolachlor

is

related

closely

to metolachlor.
Metolachlor was discovered and patented as a herbicide
in the early seventies. Taken into the field, the product
showed excellent grass control and, combined with a
safener, good crop tolerance in key crops including
it eventually
maize. Sold for the first time in 1976,
gained registration in over 90 countries and more than
70 crops. From the beginning it was known to be a
molecule consisting of an active part (the s-isomer) and
a relatively inactive part (the r-isomer) in the proportion
50:50. Only in the late-1980s it became feasible, with
novel synthesis technologies, to selectively produce the
active isomer only (this
technology is patented by
Novartis). As the novel active substance is based on the
is called s-metolachlor.
it
s-isomer of metolachlor,
S-metolachlor provides identical performance with [60
to 70]* % of
the original use rate of metolachlor.
Because it can be used in lower doses, s-metolachlor is
more environmentally friendly than metolachlor (in the
United Stadtes of America it is a reduced risk pesticide).
First registrations with the new molecule were granted
1997 in the USA and the changeover process from
metolachlor to s-metolachlor will be finalised in Europe
in 2003.

(326) Perhaps

the most

reason to introduce
important
s-metolachlor is that it allows for the de-registration of
metolachlor, which has the effect of countering generic
competition in this domain. While de-registration is by
itself not
the
metolachlor market segment from generic entry, as third
parties can still re-register metolachlor, it will, according
to a Novartis metolachlor post patent strategy document
[…]*. The same post patent strategy document therefore
calls for the following Key action: […]* (54).

condition to protect

sufficient

a

(327) The role of s-metolachlor in replacing metolachlor is
further clarified by other Novartis internal documents,
saying that[…]*. In this context, mention is made of the
following business opportunity: […]*.

(328)

as will

In Europe, the patent for s-metolachlor will expire in
2002, but data protection will continue to keep out
the numerous mixture
generic producers,
patents. It is expected that in value terms, s-metolachlor
will be able to completely take over the position of
strong
metolachlor
position in this domain: […]* (55). In particular,
it is
likely that […]* (56).

and hence preserve Novartis'

(54) […]*
(55) […]*
(56) […]*

L 110/50

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Official Journal of the European Union

16.4.2004

(329) Acetochlor and (s-)metolachlor will be competing head
on in the segment of pre-emergence grass control.
Acetochlor and metolachlor are the strongest herbicides
in the chemical class of the acetalinides (to which also
alachlor, dimethenamid and flufenacet belong). That the
is mainly
competition in pre-emergence grass control
taking place between acetochlor and metolachlor is also
suggested by the US experience. It can be noted that, in
Novartis' internal documents, as one of the grounds to
substitute s-metolachlor for metolachlor was mentioned
the (future) competition from […]* (57). Also in internal
documents of AstraZeneca,
is mentioned that
metolachlor forms […]* (58). The combination of the
two leading pre-emergence grass weed herbicides in
maize would result in an insurmountable strength in
this segment.

it

mesotrione is intended to[…]* (63). As becomes clear from
an analysis of the technical capabilities, and as stressed by
a competitor, mesotrione and sulcotrione are very similar
except for the timing of application: mesotrione can also
be used pre-emergence, sulcotrione only post-emergence.
The […]* of sulcotrione […]* is by itself an indication of
the strength of the latter product, given that sulcotrione is
currently AstraZeneca's best-selling maize herbicide
(accounting for [50 to 60]* % of sales) and that this active
substance is actually patented […]* (64). In other words, by
the time that sulcotrione is no longer patent protected, the
new mesotrione will have taken over the market position
of sulcotrione, so that
the latter substance can be
de-registered making it much more difficult for generic
producer to come to the market with sulcotrione. This
strategy closely resembles, […]*.

The parties' new product in broadleaf weed control

(333)

(330) The most important development in the new entity's
maize herbicides portfolio in broadleaf control
is the
introduction of AstraZeneca's mesotrione.

[…]* For this reason, according to internal documents,
also be positioned in promising
mesotrione will
mixtures with […]* (65). As a result
total acetochlor
[…]* (66).
sales will
the manufacture of
in
shows
mesotrione
comparison with
extra
competitive advantage as well.

an improved cost
sulcotrione,

structure
an

offering

Finally,

M e s o t r i o n e

Arguments raised by the parties

(334) The parties argue that

the overall market shares of
Novartis and AstraZeneca are likely to decrease for a
number of reasons.

(331)

In the near future, AstraZeneca will bring to market
products based on a new active substance, mesotrione.
Registration in the EEA is expected in the year […]* and
a full launch is expected in the year […]*. Mesotrione is
a product with a unique technical profile, offering
exceptional broadleaf weed control. According to
internal documents it has the […]* (59). Uniquely, it is
both pre- and post-emergence, but it will be mainly
positioned […]* (60). In the United States of America it
is
risk pesticide. Novartis has high
expectations of the product: according to its internal
documents mesotrione could be more competitive than
[…]* (61).

reduced

a

(335) First,

the

product

of Novartis

and
portfolios
AstraZeneca contain a number of older products which
will need to be re-registered in the near future. Without
such a re-registration, the products can no longer be
sold in the Community. As the standards have been
raised for compliance with re-registration requirements,
both on the national and on the European level, the
extension of,
example, Novartis' atrazine-based
products in France might be at risk, as well as of
metolachlor in the Netherlands.

for

(332) Mesotrione is considered to take, by itself, a [5 to 10]* %
market share of the world-wide maize herbicide market by
[…]*, comprising [10 to 20]* % of post-emergence and [0
to 5]* % in pre-emergence treatments (62). In Europe,

(336)

It is indeed the case that atrazine has been deregistered
in Germany, Italy and the Netherlands because of its
rather unfavourable environmental properties. However,
whereas
atrazine being
a
de-registered in France at a certain point in time, it is
not evident that atrazine will be de-registered in the

there may be

risk of

(57) […]*
(58) […]*
(59) […]*
(60) […]*
(61) […]*
(62) […]*

(63) […]*
(64) […]*
(65) […]*
(66) […]*

16.4.2004

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Official Journal of the European Union

L 110/51

near future. No steps have so far been announced by
the French authorities.
the
instructions given by Novartis in 1999 to its national
branch in France do not point at the existence of any
problems with atrazine, rather to the contrary, in fact:
[…]*.

It must be noted that

in particular when it is used in mixtures
herbicides,
allows
active
(mixing
ingredients
manufacturers to better control
the actual use rates
applied by the farmers; for this reason, Novartis has also
decided to sell terbuthylazine only in mixtures, not as
straight products).

generally

(337) Furthermore,

the

that

used

for broadleaf

in both pre

control. This has

impact of any de-registration of
atrazine in France on the parties' market position must
not be overstated. In particular, a substantial part of the
sales from atrazine, which is after all a broadspectrum
and
can be
herbicide
post-emergence, may be expected to shift
into the
direction of one or more specific products in the four
segments of the product space (pre-post, grass-broadleaf
in particular, to combinations thereof. As
weed) and,
indicated in the section on maize cultivation and weed
control,
in the countries where atrazine is banned,
growers generally tend to use more post-emergence
products
allowed
AstraZeneca to increase its market share by promoting
sulcotrione and nicosulfuron for use in tank mixtures,
in post-emergence. Also in France, according to a
competitor, the less favourable environmental properties
of atrazine have already allowed AstraZeneca to increase
its market share in this way. Furthermore, it is useful to
point at the fact that, according to internal documents
of AstraZeneca, the promising new broadleaf product
mesotrione will,
among others, be positioned in
mixtures with […]* (67). It is therefore likely that the
specific pre-emergence combination mesotrione- […]*
will be able to further compensate possible losses of
atrazine sales due to de-registration (if this occurs) to a
considerable extent. This is all the more likely, given
that current generic producers of atrazine (see below)
have no clear pre or post-emergence alternative to
atrazine to offer, whereas Syngenta has.

(339) As far as metolachlor in the Netherlands is concerned, it
is Novartis' intention to […]*. As has been discussed in
the section on s-metolachlor above,
is Novartis'
strategy to […]*. S-metolachlor, on the other hand, is
closely related to metolachlor but can be used in much
lower dose rates, so that it is more environmentally
friendly. No registration problems for s-metolachlor are
expected.

it

(340) Secondly, the parties claim that there are several generic
producers for some of their off-patent active ingredients,
in particular of atrazine, terbuthylazine, acetochlor and
dicamba and that generic competition on metolachlor is
likely, as it will be off-patent soon.

(341) The impact of generic products on the parties' maize
herbicides portfolio is principally confined to two active
substances, atrazine and terbuthylazine. The Israel based
Makhteshim and the Danish Cheminova are well known
generic producers. According to some competitors,
however, the real
impact of these generic products is
quite low. Atrazine is used mainly in France and is
banned or restricted in its use in many other countries.
As for the situation in France, reference can be made to
the abovementioned instructions given by Novartis to
its national branch in France: […]*. These instructions
do not point at generic entry being much of a
disturbing factor as far as Novartis is concerned. As
terbuthylazine is used mostly in combination products,
the impact of ‘straight' generic terbuthylazine is thought
to be low. In fact, Novartis sells terbuthylazine only in
ready-mixed product formulations, — that is, combined
with other active substances.

(338) As far as product mixes of other active substances with
atrazine is concerned,
the de-registration of atrazine
less importance, given that there is an
would be of
acceptable substitute in the form of terbuthylazine. Even
though terbuthylazine is by itself a rather old compound
and off-patent, it was introduced in the maize market
only in the early 90s exactly because atrazine was
banned in Germany and Italy. Terbuthylazine has a
similar spectrum of control as atrazine but has weaker
activity. It is less likely to be prohibited for use in maize

(67) […]*

(342) Furthermore,

the mere fact

that generic producers
produce (or are able to produce) an active ingredient
does not mean that they can sell their product in the
EEA. This is most clearly the case for atrazine, which is
Italy and the
no longer
Netherlands.
legal protection of
registration data may,
in addition to the patent
protection, also prevent competition: the EU registration
the national
system (for
registration systems (for the product) usually grant data

registered in Germany,
Furthermore,

substance) or

the active

the

L 110/52

EN

Official Journal of the European Union

16.4.2004

from the

the registration of

time of
protection of 5 to 10 years
registration. In Germany, for example, the data package
for
terbuthylazine, although the
is off patent, continues to enjoy such legal
product
protection,
generic
competition in terbuthylazine.

absence

leading

the

of

to

are particularly demanding in France, Germany (the two
largest markets) and Austria. It is envisaged […]* (71).

(343) Another example is provided by acetochlor, which is
the leading
expected to become in Europe one of
herbicidal substances (as has been discussed above). So
far, only a partnership between AstraZeneca
and
Monsanto has been able to obtain a registration for a
maize herbicide containing acetochlor in Spain (1993,
for a product
for
two products) and France (1999,
containing the safener (68) dichlormid,
registered by
AstraZeneca alone). Although acetochlor is no longer
patent protected, the EU registration system for active
years.
substances
protection
Registration packages
safeners also enjoy data
protection. […]* (69). As a result, so far, none of the
generic producers of acetochlor has been able to obtain
a registration for their products in the EEA. Neither has
for that
the other R & D based competitors,
any of
matter. Therefore, as conceded by the parties, there is
no generic competition whatsoever on acetochlor in the
EEA. In short, the fact that a product is off-patent and
that there are generic producers of the active substance
does not imply that these products can be sold within
Europe.

of 10

grants

data

for

(345) Thirdly,

intends

the parties claim that

they do not have
exclusive rights to a number of their key products. As
mentioned, the registration of acetochlor in Europe is
shared between AstraZeneca and Monsanto. Further,
Novartis sources dicamba from BASF, which, according
to launch a dicamba-based
to the parties,
product of
latter
its own in Europe. While
statement is correct, it is unlikely that this product will
materially
the
Syngenta's
post-emergence broadleaf segment (72). Furthermore, as
explained above,
the merged entity has product
replacement strategies for dicamba as well and it will
have products that are perceived as superior in this
segment (sulcotrione, […]*). With regard to acetochlor,
the market investigation has indicated the strength of
AstraZeneca as compared to Monsanto (73) (see above).

position

change

this

in

(346) Fourth, the parties claim that several competitors will
launch new products in the near future, whereas only
AstraZeneca, not Novartis, will come up with new
products. These latter statements are to be disqualified.
First of all,
that some strong
products that have been introduced in the recent past in
only some of the EEA countries are being progressively
introduced in the other countries
(acetochlor and
s-metolachlor). Secondly, one of AstraZeneca's new
products, mesotrione,
is going to be an absolute key
product in the maize herbicides market for the future.

it disregards the fact

(344) For dicamba, data protection still applies in most of the
important maize countries. In France, for example, the
registration data are protected until 2006; for Germany
until 2009. Given that the registration procedures for
generic dicamba are particularly demanding in France
and Germany (70)
(the two largest markets), entry by
generic producers is unlikely. An exception as far as
data protection is concerned is Italy. In this country, the
first products of presumed generic origin have been
to market
brought
strategies are,
however,
in place to limit the impact of dicamba no
longer being patent protected. […]* Given that Novartis
will
increasingly use dicamba in mixed products, an
outright de-registration of straight dicamba might also
be an effective way to impede competition from generic
dicamba. Registration procedures for generic dicamba

in 1999. Several

(68) Safeners are chemicals which are used in combination with
herbicidal active substances and which reduce phytotoxity to levels
acceptable in modern agriculture. Not all herbicidal substances
require the use of a safener, but acetochlor and metolachlor do.

(69) […]*
(70) N reply to 4ph2, q67; Novartis Western European post patent

strategy for dicamba.

(347) The parties claim that the competitors have discovered,
recently introduced or will launch in the near future the
following maize herbicides: isoxaflutole (Aventis, 1998),
foramsulfuron
isoxachlortole
(Aventis, 2003), flufenacet (Bayer, 1999), amicarbazone
(Bayer, 2002), imazamox (American Cyanamid, 2000),
cycloxidim (BASF, 2001), diflufenzopyr (BASF, 2002/3)
and tritosulfuron (BASF, 2003).

(Aventis,

2003)

and

(348) With the possible

exception of

the
prospects of these products are not such as to conclude
that the companies producing them will be capable of
challenging Syngenta's market position (74). Nor are the

isoxaflutole,

(71) […]*.
(72) [BASF business secret]*
(73) [Monsanto business secret]*
(74) [Aventis business secret]* [Bayer business secret]* [BASF business

secret]* [Dow business secret]*

16.4.2004

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Official Journal of the European Union

L 110/53

by

the products

in question (provided

the above pipeline products of

prospects of the competitors' established products, for
that matter (75). Both conclusions are arrived at after a
careful comparison of the revenue projections for each
of
the
competitors) with existing sales levels. While the parties
the
maintain that
competitors have very good potential for example, the
foramsulfuron would be as good as
prospects of
nicosulfuron the Commission finds
it necessary to
attach significant relevance to the internal estimates of
the competitors given that they are probably the best
informed about the properties and market potential of
the products,
they are still under
development.

in particular as

acetochlor,

s-metolachlor,

competitors are able to stand up against the individual
and combined strength of Syngenta's combined range of
products. The strong presence of Syngenta in all four
(on the basis of its active
segments of weed control
nicosulfuron,
substances
the
sulcotrione, mesotrione)
flexiblity to make leading tank mix recommendations
and to develop leading mixture products, with the effect
of pre-empting the market for many of the competitors'
(new or existing) products. Equally, the strong presence
of Syngenta's active substances in all four segments of
weed control will confer to it substantial power vis-à-vis
the distribution chain.

to Syngenta

confers

(349) As for

its

the

that

combined market

isoxaflutole (Aventis),

this is a very strong
product indeed. As indicated in the section on weed
isoxaflutole is a product providing excellent
control,
in pre-emergence. The parties claim
broadleaf control
that the product has captured [5 to 10]* % of the EU
market in first two years and that the market share will
continue
recent
to grow rapidly in view of
introduction. According to the sales figures provided by
Aventis, isoxaflutole attained a 1999 market share of [5
in the representative maize countries
to 10]* % -
it is even
France, Germany and Italy. In this respect,
remarkable
shares of
AstraZeneca and Novartis in 1999 showed only a very
moderate decrease in comparison with the year before,
namely from [40 to 50]* % to [40 to 50]* %,
EEA-wide. While Aventis' revenue projections for 2003
confirm that there is still scope for isoxaflutole growing
the
in market
observation must be that three-fifths of its potential has
already materialized up to 1999. In their reply to the
statement of the objections, the parties maintain that
the
figure is a gross underestimation of
the latter
the
reason,
For
of
potential
this
to reconfirm their
Commission has asked Aventis
submission and to check whether
recent
developments
in the 2000 growing season might
perhaps give reason to adjust the market expectations
for the product. Aventis, however, saw no reason to
revise their sales forecasts as provided at an earlier stage.

isoxaflutole.

the most

business

[Aventis

secret]*,

share

(351) This

a

to

scenario is

indeed the scenario expressed by
numerous respondents, customers and competitors alike.
and
competitor,
According
‘unprecedented' maize portfolio will give the flexibility
to Syngenta to make leading straight and mixture
products, the strength of which would even be such to
(including
allow Syngenta to bundle product offers
seeds) at distributor and farmer level, using some of the
key products as a leverage for new or lesser products.

unique

the

(352) The next sections will

to
which a strong range of products is such as to confer to
for
Syngenta an exceptional position in the market
maize herbicides

further outline the extent

Possible (future) product combinations

(353) The unique maize portfolio will give Syngenta the
flexilibity
product
combinations. Competitors have typically pointed at the
following combinations as being outstanding.

to make

leading

further

(350)

Indeed,

In any event, whether isoxaflutole will effectively be able
to further realize its potential will depend on a number
of unknowns.
the structural change in the
industry that results if the merger operation as proposed
is probably the most
by the parties goes ahead,
is unlikely that
factor
important
the
isoxaflutole or

in this respect:
the other new products of

it

(75) [Aventis business secret]* [BASF business secret]* [DuPont business
secret]* [Dow business secret]* [American Cyanamid business
secret]* [Monsanto business secret]*.

(354) Several promising product combinations amount

combination

to
offering broad spectrum solutions for both pre and
post-emergence
of
applications. The
sulcotrione,
the best post-emergence broadleaf weed
control product, with metolachlor (and possibly atrazine
terbuthylazine) would offer outstanding broad
or
for both pre and post-emergence
spectrum control
of mesotrione
applications.
in
possibilities
The
[…]* equally offer
combination with s-metolachlor
excellent broad spectrum control
(for example as a
replacement to atrazine, as discussed at length in the
section on atrazine in France). Nicosulfuron, reputed to

L 110/54

EN

Official Journal of the European Union

16.4.2004

be the strongest post-emergence graminicide, is seen by
many competitors as a very good combination partner
for
or
metolachlor
terbuthylazine (76).

(s-metolachlor),

atrazine

(355)

In post-emergence, the best weed control solution will
be the ready mix combination of nicosulfuron and
It offers a complete solution against all
sulcotrione.
grasses and broadleaves. The
the
combination of nicosulfuron with the newly developed
mesotrione, an excellent broadleaf herbicides to be used
in pre or post-emergence (77).

same holds

for

(356) Other strong combinations, involving only the products
(broad
the parties, would be atrazine-acetochlor
of
atrazine-s-me-
spectrum control,
tolachlor
(broad spectrum control, pre-emergence),
atrazine-sulcotrione (broad spectrum control, both pre
and post-emergence), prosulfuron-nicosulfuron (broad
pyridate-
spectrum control,
nicosulfuron (broad spectrum control, post-emergence).

post-emergence)

pre-emergence),

and

(357)

It shows that both on the pre and the post-emergence
segment, Syngenta will have an ‘ideal' range of products
that fully covers grass and broadleaf activity in both
pre-emergence and post-emergence. Faced with such a
load of highly performing broadspectrum and wide
application products, the competitors of Syngenta will
find it difficult to sell their narrower spectrum products.

(358) The range of products at the disposal of the competitors
is much less important than that of the new entity. On
the pre-emergence segment, BASF has no compound
that has full broadleaf activity. BASF's product range
would be much more competitive if it could have access
to a mixture partner in order to complement the mainly
grass activity of its active substance dimethenamid. The
technically only possible partners of dimethenamid with
broadleaf activity would be atrazine (Novartis/generic),
terbuthylazine (Novartis/generic),
isoxaflutole (Aventis)
and pendimethalin (AmCy). From a price and efficacy
perspective, the two Novartis active substances would
isoxaflutole (Aventis) and
actually fit best, whereas
pendimethalin (AmCy) are not optimal
candidates,
among others, due to some phytotoxic problems.

(76) […]*
(77) […]*

(359) Aventis'

a

product

isoxaflutole,

pre-emergence
broadspectrum herbicide, would clearly benefit
from
being combined with active substances for extended
grass control. Monsanto's range of products would be
strengthened by coupling acetochlor with atrazine or
terbuthylazine in ready mix formulations (atrazine for
France, Spain, Portugal or Greece;
terbuthylazine for
Italy and Germany, where atrazine is not registered).
DuPont's range of products is primarily situated in the
post-emergence segment and has, in fact, no comparable
presence in pre-emergence herbicides.

(360) The range of products at the disposal of the competitors
on the post-emergence segment
is also much less
important than that of the new entity. For BASF, the
situation is that its broadleaf products bentazone and
bentazone mixed with dicamba need a full grass partner.
The best possible mixing partner is nicosulfuron, owing
to its efficacy in the grass post-emergence segment. In
fact, in Germany a bentazone and nicosulfuron mix is
currently being marketed. Another possible mixing
partner for bentazone would be rimsulfuron of Dupont,
but this combination is reported to be less attractive
than the combination of bentazone with nicosulfuron.

The

mesotrione

to further

in order
control.

(361) Aventis' post-emergence broadleaf herbicide bromoxynil
would be optimally combined with terbuthylazine
extend its
(Novartis/generic),
post-emergence
weed
broadleaf
broadspectrum product
foramsulfuron suffers from a
lack of residual control, a problem that could be solved
by combining the products with, ranked from most
attractive partner to least attractive partner: atrazine
(Novartis/generic),
(AstraZeneca),
terbuthylazine
(Novartis/generic), dicamba (Novartis),
metosulam/fluthiamid (Bayer) and pyridate (Novartis).
could
control
Extended
to
it with mesotrione
by
sparring
foramsulfuron
(AstraZeneca),
sulcotrione (AstraZeneca), prosulfuron
(Novartis),
again ranked in descending order of
attractiveness. Monsanto's range of products is primarily
situated in the pre-emergence segment and has no
in post-emergence herbicides.
comparable presence
DuPont's product range in Germany is showing a gap in
post-emergence herbicides with residual activity; in Italy,
DuPont would
to
pre-emergence products and a post-emergence broadleaf
weed compound with a different mode of action than
currently in DuPont's range.

from having

broadleaf

benefit

access

given

be

(362) Several

agreements
between the competitors and Novartis or AstraZeneca

development

cooperation

and

16.4.2004

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Official Journal of the European Union

L 110/55

currently

Similarly,

some of

in place.

the
are
competitors have shown concrete interest in combining
their products with either products of Novartis or of
AstraZeneca in ready mix formulations (78). In view of
the very complete range of products that Syngenta will
have ‘in-house' (both pre-emergence and post-emergence
solutions, graminicides, broad spectrum herbicides and
broadleaf herbicides, several modes of action), it is likely
that the new entity will seek to combine,
in the first
instance,
its own molecules. This development would
have an adverse effect on the ability to compete of
those competitors who currently have co-operation
agreements with the parties or who have an interest in
concluding such agreements, as
to
combine with products from other competitors are
limited in number and scope. Several competitors have
expressed concern that if Syngenta were to deny access
this would further enhance
to its key molecules,
Syngenta's market position.
the
competitors have indicated that access to Syngenta's
active
ability to
essential
compete (79).

the possibilities

substances

some of

Indeed,

their

for

is

(363) Similarly,

for

there is no basis

in view of Syngenta's range of performant
broadspectrum products,
it is likely that a strategy of
withdrawing straight herbicide products is an effective
and attractive strategy to ‘isolate' and render less useful
the competitors' products that are intended to be used
in farmers' tank mixes. This strategy as well will have an
adverse effect on the ability of competitors to compete.
In their response to the Statement of Objections, the
parties maintain that
these
assertions. Even in those cases where a mixture strategy
would be technically feasible,
it would be ‘economic
madness', as the mixture products would be more
lost by
expensive
abandoning straight products. While those arguments
apply for companies in a normal competitive position,
they do not necessarily apply to a company that is, in
view of its strong market position and its exceptionally
wide product portfolio,
in a position to profitably
pursue such a strategy. Even if there remain for the
competitors some possibilities to combine with products
these will be limited and
from other competitors,
the merged
involve economic transaction costs that
entity will not be burdened with.
it
should be recalled that the incentive for the merged

share would be

In this respect,

and market

(78) [Aventis business secret]* [BASF business secret]* [Bayer business

secret]*

(79) [AmCy business secret]* [Monsanto business secret]* Access to
generic products, where they are registered at least, is less of an
issue due to the wide availability of supply options and registration
data packages. This is not the case for terbuthylazine in Germany,
where Novartis is the only company who has a registration.

entity to adopt the mixtures strategy is reinforced by the
fact
that, as indicated before, developing ready mix
products is an effective way to extend the protected
status of
that have become
off-patent.

individual products

D i s t r i b u t i o n

(364) The span and strength of the Syngenta product range
across all of
the segments will be unique among
companies competing in the maize herbicide market.
This will allow Syngenta to construct very powerful
product marketing campaigns, designed to attract
farmers to purchase all of their herbicides mainly or
even exclusively from Syngenta. An example of
this
approach would be to use the power of the already
strong positions of metolachlor (s-metolachlor), atrazine,
acetochlor, sulcotrione (mesotrione) and nicosulfuron in
the market
In this
respect,
the strategic replacements of metolachlor by
s-metolachlor and sulcotrione by mesotrione have a
clear role to play as well (80).

to develop ‘product packages'.

(365) The span of products will enhance the future ability of
Syngenta to approach both distribution and growers
with differing product ranges which provide,
in fact,
very similar agronomic solutions. An example of such
an approach would be to offer a brand containing
acetochlor and atrazine to one group of distributors and
a brand containing metolochlor and atrazine to another.
The two products are made up of different active
to promote a
ingredients allowing the distributors
‘unique' product, whereas the field result will be almost
in this way is a
identical. Segmenting the market
powerful mechanism to reduce price
competition
between distributors, a feature well appreciated by
distributors, be they large or small. Higher achieved
prices increase the margin to distributors and provide a
further strong motivation to favour the promotion of
Syngenta
to the disadvantage of other
companies with maize herbicide offerings.

solutions

(366) Such a course of action is likely. In terms of pricing
strategies, […]* (81). It must be noted,
in this respect,
that distributors, as they commonly provide (solicited or
unsolicited) advice to the farmers on which products to
important
use
influencers just as well. A price strategy that can be
used is price segmentation by using different brands

combinations,

in what

and

are

(80) […]*
(81) […]*

L 110/56

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Official Journal of the European Union

16.4.2004

and/or labels, or different formulations to appeal to crop
growers with different perceived economic value. Whilst
AstraZeneca maintains that this price strategy allows the
brands to penetrate individual market segments whilst
producing the best economic returns to the customer
and AstraZeneca, it is likely that a company with such
an uncontested coverage of outstanding weed products
as Syngenta will have, will be able, and tempted, to use
marketing strategies (combining, branding, pricing) for
increasing profits only,
leaving the customers with
higher prices to pay.

Conclusion on maize herbicides

(367) On the basis of the above elements, in particular, the
high market shares that the new combination will have,
the fact that the new entity will typically be at least
[…]* times as large as its next competitor and the
strong and ubiquitous presence of the parties' products
in all
the maize herbicide market
(pre-emergence and post-emergence, grass weed control
and broadleaf control), the Commission concludes that
the notified operation will
lead to the creation of a
dominant position in the market for maize herbicides in
at least France, Germany, the Netherlands and Belgium.

four segments of

CEREAL HERBICIDES

(368) The market for cereal herbicides is, in value terms, the
most important market for selective herbicides. In 1998,
the EEA-wide turnover in cereal herbicides was ca. EUR
[…]* on a total EEA market size for selective herbicides
of ca. EUR […]*. The three most important national
cereal herbicide markets
(EUR […]*),
Germany (EUR […]*) and the United Kingdom (EUR
[…]*).

France

are

(369) For cereal herbicides in the EEA, the parties estimate
that they command a [10 to 20]* % market share (N
[10 to 20]* % + AZ [0 to 5]* %) with sales of EUR
[…]* , with upward variations on a national market
basis up to [30 to 40]* % in Portugal and Greece and
[30 to 40]* % in Italy. Aventis is currently the market
leader with EEA-wide sales of EUR […]* and an
EEA-wide market share of [30 to 40]* % (ranging from
[10 to 20]* % in Denmark to [50 to 60]* % in
Portugal). These figures are bound to decrease in the
future as, as a condition for the creation of Aventis in
1999, the merging firms (Rhône-Poulenc and Hoechst)

their

have undertaken to give a licence to another producer
for
(products
based on this active ingredient account for some [30 to
40]* % of Aventis' total cereal herbicide sales) (82).

IPU active ingredient

important

as

have

been

during

a whole,

are not, by

(370) The above market shares, given for the market for cereal
themselves,
herbicides
indications for a competition concern. However, several
concerns
the market
raised
investigation. A fair number of distributors have
indicated that the parties could obtain a strong position
in the post-emergence control of grass weeds in cereal
crops, as the parties would bring together two of the
three
leading products, namely Grasp/Achieve of
AstraZeneca (based on the active substance tralkoxydim)
and Topik of Novartis (based on clodinafop), the third
product being Puma/Proper of Aventis
(based on
fenoxaprop).

(371)

In the segment for grass control (that is graminicides
and broad spectrum herbicides combined), the countries
in which the parties would indeed have high market
shares would be Portugal with [30 to 40]* % (N [30 to
40]* % + AZ [0 to 5]* %), Spain with [30 to 40]* %
(N [20 to 30]* % + AZ [5 to 10]* %), the Netherlands
with [30 to 40]* % (but no overlap), Greece with [30
to 40]* % (N [30 to 40]* % + AZ [0 to 5]* %) and
Italy with [40 to 50]* % (N [40 to 50]* % + AZ [0 to
5]* %). At a more focused level,
the parties would
obtain strong positions in graminicides in Spain ([30 to
40]* %; N [10 to 20]* % + AZ [10 to 20]* %),
Portugal ([30 to 40]* %; N [30 to 40]* % + AZ [0 to
5]* %), Greece ([30 to 40]* %; N [30 to 40]* % + AZ
[0 to 5]* %), Belgium ([40 to 50]* %; no overlap),
France ([40 to 50]* %; no overlap), the Netherlands
([50 to 60]* %, no overlap) and Italy ([50 to 60]* %; N
[50 to 60]* % + AZ [0 to 5]* %).

(372)

It has become clear from the market investigation that
in the new entity's portfolio, Topik of Novartis will be
its sales are much larger than the
the main product;
sales of Grasp and they are growing. Grasp, on the
other hand,
is a product that is losing sales rapidly.
From 1998 to 1999, it […]* of its sales and further sales
losses are projected. Despite the fact that Grasp will
bring about some overlap in many of the countries, it is
unlikely that with the creation of
the
competitive
imposed upon Topik will
constraints
effectively diminish.

this merger,

(82) In IV/M.1378 Hoechst/Rhône Poulenc (Aventis), serious doubts
existed with respect to the position of the merging parties in the
production of herbicides containing Isoproturon (IPU), either
(IV/M.1378
straight or blended with other active substances
Hoechst/Rhône Poulenc (Aventis), point 31).

16.4.2004

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Official Journal of the European Union

L 110/57

(373) Furthermore, Aventis will

the

introduce

new
post-emergence graminicide iodosulfuron in 2001/2002
which is reportedly extremely efficient on Lolium, a key
weed for which graminicides are used in Italy. This
compound
Lolium than
clodinafop (Topik) and tralkoxydim (Grasp). Aventis is
expected
straight
formulations as well as mixtures with their proprietary
fenoxaprop active substance.

iodosulfuron

introduce

efficacy

better

has

on

to

in

(374)

Finally,
in the domain of cereal crop protection there
are very few products that are strictly pre-emergence
herbicides; most of the pre-emergence herbicides can be
applied in post-emergence as well and, as such, provide
considerable
post-emergence
herbicides such as Topik.

competition

pure

to

(375) On the basis of the above elements, it is unlikely that as
a result of the concentration a dominant position will
arise in the market for cereal herbicides.

POTATO HERBICIDES

(376)

the EEA-wide turnover

in potato cereal
In 1998,
four most
herbicides was
important national potato herbicide markets
are
Germany (EUR […]*), the United Kingdom (EUR […]*),
the Netherlands (EUR […]*) and France (EUR […]*).

about EUR […]*. The

(377) For potato herbicides in the EEA, the parties estimate
that they had in 1998 a [30 to 40]* % market share (N
[0 to 5]* % + AZ [20 to 30]* %) with sales of
EUR[…]*, with market shares exceeding [20 to 30]* %
in Ireland ([20 to 30]* % — AZ [20 to 30]* % + N [0
to 5]* %), Spain ([30 to 40]* % — AZ [20 to 30]* %
+ N [5 to 10]* %), Greece ([30 to 40]* % — AZ [20 to
30]* % + N [0 to 5]* %), Austria ([30 to 40]* % —
AZ [20 to 30]* % + N [5 to 10]* %), Germany ([30 to
40]* % — all AZ), the Netherlands ([30 to 40]* % —
AZ [30 to 40]* % + N [0 to 5]* %), Portugal ([40 to
50]* % — AZ [30 to 40]* % + N [5 to 10]* %),
Belgium ([50 to 60]* % — AZ [40 to 50]* % + N [0
to 5]* %) and France ([50 to 60]* % — AZ [40 to
50]* % + N [5 to 10]* %). In a later submission the
parties have indicated market shares for 1999. They had
combined market shares above [20 to 30]* % and an
overlap in Spain ([20 to 30]* % — AZ [20 to 30]* %
+ N [5 to 10]* %), Austria ([30 to 40]* % — AZ [20
to 30]* % + N [5 to 10]* %), the Netherlands ([30 to
40]* % — AZ [30 to 40]* % + N [0 to 5]* %),
Portugal ([20 to 30]* % — AZ [20 to 30]* % + N [0

to 5]* %), Belgium ([50 to 60]* % — AZ [40 to 50]*
% + N [5 to 10]* %) and France ([50 to 60]* % — AZ
[40 to 50]* % + N [5 to 10]* %). (83).

(378) The most important competitor was in 1998 Bayer with
an EEA market share of [20 to 30]* % and market
shares of [40 to 50]* % in Greece, [40 to 50]* % in
Austria, [30 to 40]* % in Ireland, [30 to 40]* % in
Denmark, Spain and Sweden, [30 to 40]* % in Belgium,
[20 to 30]* % in Italy, [20 to 30]* % in France, [20 to
30]* % in the Netherlands, [20 to 30]* % in Portugal
and [10 to 20]* % in the United Kingdom. Other main
competitors were Aventis with an EEA market share of
[5 to 10]* %, [30 to 40]* % in Denmark, [10 to 20]*
% in Spain, [10 to 20]* % in Portugal, [10 to 20]* % in
France, [10 to 20]* % in Greece, [10 to 20]* % in the
Netherlands, [10 to 20]* % in the United Kingdom, and
DuPont with an EEA market share of [5 to 10]* %, [10
to 20]* % in Germany, [10 to 20]* % in Austria and
the Netherlands, and [5 to 10]* % in the United
Kingdom.

terbutryn,

prometryn

(379) The parties' products in this market are either broad
spectrum herbicides or graminicides. Novartis' broad
spectrum products are based on the active ingredients
metobromuron,
and
terbuthylazine. These products account for [5 to 10]* %
of total EU sales in 1999 of broad spectrum herbicides
for use in potatoes.
In graminicides Novartis has
products (Agil/Falcon) based on the active ingredient
propaquizafop, which, according to Novartis, account
for [0 to 5]* % of total EU sales of graminicides for use
in potatoes, since they are only used in potatoes in Italy
(see, however, below). AstraZeneca's main broad
spectrum product
is Boxer/Defi, based on the active
ingredient prosulfocarb. This product alone has [20 to
30]* % of total EU sales of broadspectrum herbicides
for use in potatoes, with five other products accounting
for another [5 to 10]* % of sales in this segment. In
graminicides AstraZeneca has a product (Fusilade) based
fluazifop-p-butyl. Fusilade
on the active
total EEA sales of
accounts for [10 to 20]* % of
graminicides for use in potatoes.

ingredient

that has been phased out

(380) The parties argued in the notification that the majority
of Novartis' sales is based on an active ingredient
(metobromuron)
in 1999.
in a later submission the parties claim that
However,
metobromuron
on
(and
based
metobromuron) will be phased out
in 2000. The
products based on metobromuron were in 1999 sold in
Austria, Belgium, France, Italy and the Netherlands. This

formulations

the

(83) The parties have in a later submission argued that the market
shares of AstraZeneca for Greece and Ireland given in the
notification erroneously included sales of non-selective herbicides.
The parties would then not have a combined market share above
[20 to 30]* % in these two countries.

L 110/58

EN

Official Journal of the European Union

16.4.2004

leads to the parties having very high market shares in
Belgium and France ([50 to 60]* % and [50 to 60]* %).
In both countries both AstraZeneca and Novartis only
sold products in the broad spectrum segment where the
parties estimate that they had [60 to 70]* % in Belgium
and [60 to 70]* % in France. On the basis of the very
high market shares, which are furthermore concentrated
in one segment of the market, it can be concluded that,
with the
sale of metobromuron-based
products, the concentration would lead to the creation
of a dominant position on the Belgium and French
markets for potato herbicides.

continued

POST-EMERGENCE GRAMINICIDES FOR USE IN POTATOES

(381) Furthermore,

there is an issue in the market

for
for use in potatoes in
post-emergence graminicides
Denmark. Novartis' product Agil is registered for use in
potatoes in Denmark, yet Novartis does not indicate any
sales of Agil in potatoes, but instead allocate all sales of
in Denmark to other crops (oilseeds and sugar
Agil
beets). On the other hand, the parties have indicated
that AstraZeneca with Fusilade has [60 to 70]* % of
sales in the graminicides segment
in Denmark. The
parties claim that the remaining [30 to 40]* % is taken
active
by Dow's product Gallant, based on the
ingredient haloxyfop. However, Gallant is not registered
for use in potatoes in Denmark, and there is no other
similar product (post-emergence graminicide) registered
in Denmark. Hence, even if Novartis is correct in its
assumption that farmers have not until now used Agil
as a potato herbicide
the proposed
concentration would leave farmers with no other choice
than Syngenta's products
post-emergence
graminicides segment.

in Denmark,

in the

(384) Furthermore,

Fusilade

the most

[40 to 50]* % of

successful
is
post-emergence graminicide on the European market. In
internal documents AstraZeneca estimates that Fusilade
has
these
the Commission's
graminicides
share is
market
probably closer to [20 to 30]* % while Agil/Falcon's
share is around [10 to 20]* %. […]*

in Europe. However,

investigation shows

that Fusilade's

the overall

sales of

(385) Several

in

different

countries,

respondents

both
distributors, crop consultants and farmers' organisations,
have pointed to the very strong position that the new
entity would have in the post-emergence graminicides
markets as a result of the combination of Fusilade and
Agil/Falcon.

(386) For all the above reasons, in particular the fact that the
parties' products are the only products registered in
Denmark for use as potato graminicide,
the notified
operation will lead to the creation or strengthening of a
for
in
dominant
post-emergence graminicides for use in potatoes.

the Danish market

position

SUGAR BEET HERBICIDES

(387)

In 1998, the EEA-wide turnover in sugar beet herbicides
was ca. EUR […]*. The most important national sugar
beet herbicide markets are Germany (EUR […]*), France
(EUR […]*) and Italy (EUR […]*).

(388) For

in the EEA,

sugar beet herbicides

the parties
estimate that they in 1998 command a mere [0 to 5]*
% market share with sales of EUR […]*. The only
country in which the combined market share of the
companies exceeds [10 to 20]* % is Greece ([20 to
30]* %).

(382) AstraZeneca's internal documents reflect that there may
already be less competition in the post-emergence
graminicides market than in many other crop protection
markets. […]*

(383) The parties have indicated which products are the best
to control specific grasses in potatoes. Novartis indicates
that for the grasses agropyron repens, cynodon dactylon,
sorghum halepense, digitaria sanguinalis and echinochloa crus
galli either Agil/Falcon or Fusilade is the best product.
AstraZeneca indicates that
the grasses agropyron
repens, cynodon dactylon, sorghum halepense, avena fatua
and alepecurus myosuroides either Agil/Falcon or Fusilade
is
the best product. Agil/Falcon and Fusilade are
therefore considered by the parties to be technically
very good products compared with their competitors'
products.

for

reason for

(389) The market shares of the merging parties give not, by
themselves,
as
mentioned in the section on potato herbicides, Syngenta
would bring together two of the three leading products
treating grass post-emergence in several crops, among
which sugar beets
and
Agil/Falcon of Novartis).

(Fusilade of AstraZeneca

concern. Nevertheless,

POST-EMERGENCE GRAMINICIDES FOR USE IN SUGAR
BEETS

(390)

In this market the parties would have [50 to 60]* % in
the United Kingdom and [50 to 60]* % in Belgium. The

16.4.2004

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Official Journal of the European Union

L 110/59

in Denmark
parties have furthermore indicated that
they would have a combined share of [60 to 70]* %
(Fusilade [60 to 70]* %, Agil [0 to 5]* %) with Dow's
Gallant having the remaining [30 to 40]* %.

sorghum halepense, digitaria

(391) The parties have indicated which products are the best
to control specific grasses
in sugar beets. Novartis
indicates that for the grasses agropyron repens, cynodon
and
dactylon,
echinochloa crus galli either Agil/Falcon or Fusilade is the
best product. AstraZeneca indicates that for the grasses
agropyron repens, avena fatua and alepecurus myosuroides
either Agil/Falcon or Fusilade is
the best product.
Agil/Falcon and Fusilade are therefore considered by the
parties to be technically very good products compared
to their competitors' products.

sanguinalis

respondents in different
(392) As indicated above, several
countries, both distributors,
and
farmers' organisations, have pointed to the very strong
the new entity would have in the
position that
post-emergence graminicides markets as a result of the
combination of Fusilade and Agil/Falcon. […]*

crop consultants

(393) For all the above reasons, the concentration will create
or strengthen a dominant position in the market for
post-emergence graminicides for use in sugar beets in
the United Kingdom, Belgium and Denmark.

the

[…]*

based

in this

segment.

herbicides for use in oil seed crops with important
shares in France ([30 to 40]* %) and Spain ([10 to 20]*
In graminicides Novartis has
%)
products
ingredient
active
on
propaquizafop and another (Dual) based on metolachlor.
Dual accounts for [0 to 5]* % and Agil/Falcon for [10
to 20]* % of total EU sales of graminicides herbicides
for use in oil seed crops. Agil/Falcon has a share of [20
to 30]* % of this segment in Germany. AstraZeneca has
no broadleaf herbicides for
this crop. AstraZeneca's
is Racer based on
main broad spectrum product
flurochloridone, which has a share of [30 to 40]* % of
the broad spectrum segment in Spain. In graminicides
AstraZeneca has Fusilade based on the active ingredient
fluazifop-p-butyl. Fusilade accounts for [10 to 20]* % of
total EEA sales of graminicides for use in oil seed crops,
with shares of [30 to 40]* % in Germany and [10 to
20]* % in the United Kingdom. Looking at the market
shares of graminicides as a whole, the parties would
have [60 to 70]* % in Germany and [30 to 40]* % in
the United Kingdom.

The above analysis shows that there are no competition
concerns on the overall market for oil seed herbicides
but that the situation for post-emergence graminicides
warrants further attention.

OIL SEED HERBICIDES

POST-EMERGENCE GRAMINICIDES FOR USE IN OIL SEED
CROPS

(394)

In 1998, the EEA-wide turnover in oil seed herbicides
was about EUR […]*. The two most important national
oil seed herbicide markets are France (EUR […]*), and
Germany (EUR […]*).

(397)

(395) For oil seed herbicides in the EEA, the parties estimate
that in 1998 they have a [20 to 30]* % market share
(N [10 to 20]* % + AZ [5 to 10]* %) with sales ofEUR
[…]*, with market shares exceeding [20 to 30]* % in
Germany ([20 to 30]* %), Spain ([20 to 30]* %), Italy
([20 to 30]* %) and France ([30 to 40]* %).

(396) The parties' products

for oil

in the market

seed
herbicides are the following. Novartis has broadleaf
products based on the active ingredients pyridate and
clomazone. These are important in Germany where they
in 1999 had [30 to 40]* % of the broadleaf segment.
At the EU level they had [20 to 30]* % of the broadleaf
segment. Novartis' broad spectrum products are based
on the active ingredients dimethachlor, clomazone,
tebutam and terbutryn. These products account for [10
to 20]* % of total EU sales in 1999 of broad spectrum

In the market for post-emergence graminicides for oil
seeds crops the parties would have [60 to 70]* % in
Germany, [50 to 60]* % in the United Kingdom and
[60 to 70]* % in Denmark. A particular concern has
been mentioned by a respondent with regard to the
Danish market for oilseed rape graminicides where the
parties' market share exceeds [50 to 60]* % with the
products Fusilade from AstraZeneca ([20 to 30]* %)
and Agil from Novartis ([30 to 40]* %), the only other
registered product being Dow's Gallant
(based on
haloxyfob). The parties indicate that, contrary to the
situation
six-seven
post-emergence grass herbicides are registered, Denmark
has a restrictive policy of registering new products
when a certain number of valuable alternatives are
already present on the market. However, as indicated
above, also in other countries both distributors, crop
consultants and farmers' organisations, have pointed to
the very strong position that the new entity would have
in the post-emergence graminicides markets as a result
of the combination of Fusilade and Agil/Falcon. […]*
The parties have indicated which products are the best
to control specific grasses in oil seed crops. Novartis

countries where

other

in

L 110/60

EN

Official Journal of the European Union

16.4.2004

for

that

the grass weed agropyron repens
indicates
Fusilade is the best product while AstraZeneca indicates
that
for the grasses agropyron repens, avena fatua and
alepecurus myosuroides either Agil/Falcon or Fusilade is
the best product. Agil/Falcon and Fusilade are therefore
considered by the parties to be technically very good
products compared with their competitors' products.

size submitted in the notification. However, according to
the parties
this has been decreasing following the
registration of the product Gulliver from DuPont and in
1999 Novartis sales were only EUR […]* giving a share
of [30 to 40]* % of the revised estimate of the total
market.

(398) The elimination of Agil/Falcon as a competitor

to
Fusilade will therefore create or strengthen a dominant
position in the markets for post-emergence graminicides
for use in oil seed crops in Denmark, Germany and the
United Kingdom.

RICE HERBICIDES

(399)

(400)

indicated

respondent

a
investigation

In the notification,
the parties have indicated that
AstraZeneca had no sales in rice herbicides in France
while Novartis had a market share of [90 to 100]* % in
1997 and 1998. However,
to the
that
Commission's market
AstraZeneca had sales in France in 1996, 1997 and
1998. AstraZeneca confirmed on 10 May 2000, shortly
before the statement of objections had to be sent out,
that the notification was not correct on this issue. As a
result, the Commission was not in a position to launch
a full market investigation into this market. However, on
the basis of the information provided by the parties, the
transaction
competition
concerns.

shown below,

raises,

as

for

the market

rice
In the notification the size of
herbicides in 1997 and 1998 was given as EUR […]*.
According to AstraZeneca the growing of rice in France
is limited to the Camargue area. AstraZeneca indicates
that its only rice herbicide product is Ordram Stauffer
(concentration 750 g/l), which is based on the active
ingredient molinate. AstraZeneca's ex-manufacturer sales
in 1998 were EUR […]* and in 1999 EUR […]*.
According to AstraZeneca, Molinate
is generically
available in France and generic molinate sales by Sipcam
are estimated at EUR […]* in both 1998 and 1999.
AstraZeneca also submit
the
market
indicated in the notification was wrong and
instead estimate it to be approximately EUR […]* at end
user level and EUR […]* at the ex-manufacturer level.
This would give AstraZeneca a market share of about
[10 to 20]* % in 1998 and about [10 to 20]* % in
1999.

the total size of

that

(401) Novartis sales for its products Sofit and Setoff were
about EUR […]* in 1998 giving it a market share of [40
to 50]* % according to the revised estimate of the total
market size, while it was [90 to 100]* % of the market

(402) According

estimate

to the market

submitted by
AstraZeneca, the combined market share would be [60
to 70]* % in 1998 and [40 to 50]* % in 1999.
However,
the parties had presented originally an
estimate of the total market size that was considerably
smaller. On this basis, the Commission considers that
the market shares submitted by AstraZeneca constitute
the minimum share that the parties can be considered
to have. Furthermore, the parties have not indicated that
any of the other competitors might have a substantial
market share. The submission made by AstraZeneca that
the overlap will be eliminated as AstraZeneca has
already decided to discontinue Ordram Stauffer, a
molinate formulation that it sells only in France, cannot
be taken into account for the purpose of this assessment
because simply stopping the sales of the AstraZeneca
formulation would give the sales force of the merged
entity the possibility to recoup these sales with Novartis'
remaining products. Furthermore, it can be noted that
AstraZeneca has indicated that it has not yet stopped
manufacturing the substance. Even if this were to take
place in 2000, as indicated by AstraZeneca, the merged
entity would
stock.
Furthermore, AstraZeneca indicates that the registration
of Ordram Stauffer remains valid until 2008, thereby
giving it the possibility to reverse, at any time until that
stop
apparent
date,
manufacturing the product. Finally, AstraZeneca sells
another formulation under the same brand name in
introduce this into
other countries and might
this would be
France, although it has
uneconomical.

later
stated that

continue

decision

existing

current

sell

its

to

to

(403) As indicated above, the CO form had not identified the
French rice herbicide market as an affected market.
However, the parties have acknowledged that there are
grounds
for competition concerns. They have thus
proposed that AstraZeneca grant an exclusive licence to
manufacture
and sell AstraZeneca's molinate-based
herbicide formulation bearing the name Ordram-Sopra,
and any substantially similar replacement formulation
that Syngenta might register, for use on rice in France,
until 2008, unless no purchaser is willing to accept such
a licence to manufacture,
in which case AstraZeneca
will grant an exclusive right to use and distribute the
Ordram-Sopra
as
described above) for use on rice in France and supply
such Ordram-Sopra formulation (or its replacement, as
described above) as the purchaser may require for use
on rice in France.

formulation (or

replacement,

its

16.4.2004

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Official Journal of the European Union

L 110/61

(404) This undertaking will eliminate the overlap on the
French market for rice herbicides. On this basis, the
Commission considers
this
that
commitment eliminates the above competition concerns.
Therefore,
the
notification incomplete.

the Commission did not

fulfilment of

declare

the

HERBICIDES FOR FRUITS AND NUTS

(405)

In the notification the parties submit that the EEA-wide
turnover in 1998 in herbicides for fruits and nuts was
important
approximately EUR […]*. The two most
national markets were France (EUR […]*), and Spain
(EUR […]*).

(409)

figures for Portugal, stating that

In a later submission, the parties have, however, revised
their
their original
submission had overestimated the parties' market shares.
Based on these revised figures, the parties' market share
would be [20 to 30]* % in 1998 and [30 to 40]* % in
1999. The market investigation has broadly confirmed
that the present combined market shares in countries
other than France are not such that it is likely that the
concentration would
or
lead
strengthening of a dominant position, taking also into
consideration the complementary nature of the parties'
product portfolios.

creation

the

to

It should, however, be noted that AstraZeneca has plans
to introduce products based on the active ingredient
flazasulfuron in several countries. Such products were
registered in France and Spain in 1999 and sold in
France in 1999 (AstraZeneca has not given information
as to whether there were any sales in Spain in 1999).
Registrations are anticipated in Portugal and Austria in
2000, Germany, Italy and Greece in 2001. As described
the products Katana and Mission based on
below,
in
flazasulfuron are expected to be very successful
France, which
for which
country
AstraZeneca has provided sales projections.

only

the

is

(406) The parties

the

that

foliar

argue

(non-selective).

activity
are mainly

traditional distinction
between ‘selective' and ‘non-selective' herbicides does
not apply to perennial crops such as vines and orchards.
instead in this market made a
The parties have
distinction between those which have
residual or
residual plus foliar activity (selective) and those with
only
selective
herbicides
used pre-emergence while
non-selective are used post-emergence. According to the
non-selective
parties,
herbicides
the
to
pre-emergence selective herbicides and will continue to
do so, because they are more environmentally friendly
and more cost effective. The product which mainly has
benefited
is Monsanto's
RoundUp.

of post-emergence
increasing

development

from this

relative

been

The

has

use

the

(407) Using the above classification,

the parties' product
portfolios in fruits and nuts have until recently been
quite complementary. AstraZeneca was mainly active
with non-selective herbicides
such as Gramoxone
(paraquat), Giror (paraquat + amitrol) and Touchdown
(sulfosate) while Novartis' main strength has been in
selective herbicides with products based on the active
ingredients
terbumeton,
norflurazon, diclobenil and simazine. Only in France is
this picture of complementarity less clear, as will be
explained below.

terbuthylazine,

diuron,

France

(410) As mentioned in recital 407,

in other countries the
parties' product portfolios are largely complementary in
that AstraZeneca's products are mainly non-selective,
while Novartis' are mainly selective. This is not the case
in France, where Novartis is present in the non-selective
segment with its products Weedazol (ata) and Glifazol
(ata + glyphosate). Furthermore, AstraZeneca introduced
in 1999 two new products, Katana and Mission based
on the active ingredient flazasulfuron. There is some
disagreement
are
non-selective, as first claimed by the parties, or selective,
as claimed by a competitor. However, the parties have
also later submitted that Katana/Mission will compete in
the residual sector which would seem to indicate that it
ought to be classified as selective.

about whether

Katana/Mission

(408) For herbicides for fruits and nuts in the EEA, the parties
submitted in the notification that they in 1998 had a
[30 to 40]* % market share (N [10 to 20]* % + AZ [10
to 20]* %) with sales of EUR […]*. Their combined
market share exceeded [20 to 30]* % in Greece ([20 to
30]* %), Italy ([20 to 30]* %), Denmark ([30 to 40]*
%), France ([40 to 50]* %) and Portugal ([50 to 60]* %).

(411) According to the parties, the total market size in France
was EUR […]* in 1999, up from EUR […]* in 1998.
The grape segment is with EUR […]* much larger than
the fruits and nuts segment with EUR […]*. The parties
submit that their shares in these two segments were the
following:

L 110/62

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Official Journal of the European Union

16.4.2004

Market size
(EUR
million)

Novartis

AstraZeneca

Syngenta

[…]*

[20-30]* % [5-10]* % [30-40]* %

[…]*

[30-40]* % [5-10]* % [30-40]* %

[…]*

[30-40]* % [10-20]* % [40-50]* %

Fruit and nuts
(total)

Grape

Fruit

(412) According to the notification, the other main players in
the French market were in 1998 Monsanto ([20 to 30]*
%, Dow ([10 to 20]* %) and Aventis [5 to 10]* %. The
parties' combined share is therefore […]* as big as that
two Monsanto. Furthermore, Monsanto's
of number
its
position is mainly the result of sales of RoundUp,
successful non-selective herbicide. By contrast,
the
parties will have a well-balanced portfolio of both
selective and non-selective herbicides.

(413) The parties' already strong position could be further
strengthened as a result of regulatory pressure on the
cheap active ingredient diuron. While there apparently
are no concrete plans to prohibit the use of diuron in
France, the permitted use rate has been reduced and
If that happens, the more
could be further reduced.
expensive
and Novartis'
products based on terbuthylazine would increase their
market share.

products Katana/Mission

the

recent

(414) The main reason for concern in the French market is,
however,
introduction of AstraZeneca's
products, Katana/Mission, based on the active ingredient
flazasulfuron. These products have only registration for
use as grape herbicides. They were introduced in
autumn 1999,
judging by a press release, probably in
the middle of September. […]*

(415) The

the

argue

sector

parties

competitive

that
highly

non-selective
that
post-emergence
as
is
Monsanto has aggressively reduced price to expand its
share and has become the cornerstone of
market
new
state
herbicide
Katana/Mission products compete in the residual sector.
However,
sales
that
projections
should not give reason to concern as
flazasulfuron is owned by ISK and only distributed by
AstraZeneca. Given the close collaboration between ISK

also argue

strategy.

strong

They

they

that

the

the

that

that

these

argue

strong

parties

competitors

and other
in developing
and AstraZeneca
products, the parties have, however, not explained why
the fact
ISK owns flazasulfuron should hinder
Syngenta in having a dominant position. Furthermore,
the
to
flazasulfuron are likely to enter the market in the next
two years. They specifically mention products based on
the active ingredients azafenadin (DuPont),
thiazopyr
(Rohm and Haas) and flumioxazine (BASF/American
Cyanamid). The market investigation has not confirmed
that the introduction of these new products is likely to
constrain the parties' position in the residual segment to
a significant degree.
[Competitors' business secrets]*
Finally, the parties argue that flazasulfuron, if successful,
is likely to cannibalise older products in the residual
sector such as Novartis's current range. While it may be
there will some loss of market share of
true that
products in Novartis' current range,
it should also be
noted that Novartis in 1998 had [50 to 60]* % of this
segment, and in 1999 [40 to 50]* %. The sales forecasts
for Katana/Mission would give the products a share of
[40 to 50]* % in 2001 in the residual
(selective)
segment. Unless Katana/Mission completely replace the
sales of Novartis' entire product range in this segment,
there is bound to be a (probably significant) addition to
Novartis' already high share of the sales in the segment.
In fact, assuming that the current market participants all
would lose sales in the same proportion, the parties'
share in this segment would be [60 to 70]* % in 2001.

(416) The parties have in the reply indicated that the above
calculations are speculations which are not
likely to
materialise. In particular, they indicate that flazasulfuron
suffers from selectivity issues and that
its potential
therefore will be limited by the need to avoid the
calculations are,
build-up of weed resistance. The
however, based on sales projections
submitted by
AstraZeneca during the investigation of this case and
are roughly confirmed by other market participants as
well as by internal AstraZeneca documents. The parties
have not presented evidence that sufficiently clearly
demonstrates
significantly
overestimated the potential of flazasulfuron.

that AstraZeneca

has

(417) The concentration will

therefore create a dominant
position in the French market for herbicides for fruits
and nuts.

HERBICIDES FOR SOYBEANS

(418)

Italy is the only national market in which both parties
are active and the combined market shares exceeds [30
to 40]* %. In this market, which in 1998 had a value of

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Official Journal of the European Union

L 110/63

EUR […]*, AstraZeneca had in 1998 a market share of
[20 to 30]* % while Novartis had [10 to 20]* %.
However, [10 to 20]* percentage points of AstraZeneca's
[20 to 30]* % were achieved by the distribution of
BASF's range. BASF has in 1999 given notice to end this
distribution arrangement, after which the combined
market share of the parties will be less than [20 to 30]*
%.
post-emergence
graminicides are available and achieve significant sales
in Italy. For these reasons the proposed concentration
would not lead to the creation or strengthening of a
dominant position on the Italian market for soybean
herbicides, nor on a separate relevant market
for
post-emergence graminicides.

Furthermore,

the major

all

insecticides market can be considered an aphid market.
Aphids are foliar
insects. The parties have strong
positions on the European-wide level ([30 to 40]* %)
and in Belgium ([70 to 80]* %), Denmark ([40 to 50]*
%), France [40 to 50]* % and Germany ([30 to 40]*
%). The market share figure for Germany is, taking into
account sales figures submitted by competitors,
in all
likelihood slightly above [30 to 40]* %. The next
competitors in cereal
insecticides are Aventis with a
European-wide market share of [10 to 20]* %, [10 to
20]* % in Belgium, [10 to 20]* % in France and Bayer
with [5 to 10]* % in the EEA, [10 to 20]* % in France
and [10 to 20]* % in Germany. Syngenta would,
therefore, be roughly […]* times as big as the nearest
competitor in all of the above markets.

HERBICIDES FOR VEGETABLES

(422)

(419) There is no national market in which the parties have
overlapping activities and a combined market share of
more than [30 to 40]* %. Furthermore, Novartis'
post-emergence graminicide Agil/Falcon only achieves
significant sales in vegetables in Italy ([5 to 10]* % of
total graminicides sales) and the United Kingdom ([10 to
20]* % of total graminicides sales) where AstraZeneca's
Fusilade is not as
in other markets.
important as
Fusilade thus only has [10 to 20]* % of vegetable
graminicides sales in the Italy and [0 to 5]* % in the
the proposed
these
United Kingdom. For
concentration would not
creation or
strengthening of a dominant position on the market for
vegetable herbicides, nor on a separate relevant market
for post-emergence graminicides.

reasons
lead to the

C.4 INSECTICIDES

as

and

foliar

‘Klartan'.

insecticides.

AstraZeneca's

Pyrethroids were

In the market investigation, several distributors and crop
consultants have indicated that the parties will have the
most effective insecticides, the so-called pyrethroids for
use
first
commercialised in the early seventies. Novartis' active
substance is tau-fluvalinate, sold under the tradenames
sells
‘Mavrik'
lambda-cyhalothrin under the tradename ‘Karate'. On a
world-wide basis lambda-cyhalothrin is the second best
selling pyrethroid compound,
followed closely by
Aventis' deltamethrin (trade name Decis). In the EEA,
lambda-cyhalothrin is the number one pyrethroid, ahead
of deltamehtrin (Aventis), cypermethrin and Novartis'
tau-fluvalinate. The market share of pyhretroids is likely
to further increase since insecticides based on the two
other main chemical classes, organophosphates (OPs)
and carbamates, face regulatory threat as concerns the
registration process.

(420) As for insecticides, Europe accounts for only about [10
to 20]* %, or EUR 1 100 million, of
the global
agro-insecticide market of around EUR 5 500 million.
Therefore,
crop
the
in Europe. The only EEA-wide
protection segment
markets with a total turnover above EUR 100 million
are insecticides for fruits and nuts (EUR 300 million)
and insecticides for vegetables (EUR 115 million).

insecticides

constitute

smallest

INSECTICIDES FOR CEREALS

(421) Despite the fact that various insects attack cereal crops,
aphids are the major pests by far. Therefore, the cereal

(423) The parties argue that their two pyrethroids will

lose
patent protection in 2000 (Tau-fluvalinate) and 2003
(lambda-cyhalothrin). […]* The third most important
is
phyrethroid compound in the EEA, cypermethrin,
already produced by several generic suppliers. However,
the loss of patent protection is just one necessary
condition for generic competition. Another important
step for generic producers to actually compete is to
obtain registration which is often a lengthy and costly
process. Moreover, these documents also indicate that
the regulatory threat on OPs represents a medium to
long term growth opportunity for pyrethroids, that their
market shares are increasing and that there seems to be
some unused potential. In the EEA, the market share of
Syngenta increased from [30 to 40]* % in 1997 to [40
to 50]* % in 1998,
in that
period. Therefore, the strong position of the parties in
for use in cereals will very likely be
insecticides
maintained for the near future.

in a shrinking market

L 110/64

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Official Journal of the European Union

16.4.2004

(424) For the above reasons, the concentration will lead to the
creation of a dominant position in the market for foliar
insecticides for use on cereals in Belgium, Denmark,
France and Germany.

INSECTICIDES IN FORAGE CROPS

(425) The parties would have a combined market share of [50
to 60]* % in France (Novartis [20 to 30]* %, AZ [20
to 30]* %). Total sales in France amount to EUR […]*.
Since this crop is almost entirely located in France, the
parties would also have a very high overall market share
in the EEA ([40 to 50]* %). Competitors in this market
are Bayer with [10 to 20]* % of the sales in France, and
Aventis with [10 to 20]* %. The great majority of
products sold in this market are based on pyrethroids
which account for almost [80 to 90]* % of all sales.
cereal
the
Consequently,
insecticides applies.

reasoning

same

for

as

(426) The conclusion is, therefore, that the concentration will
lead to the creation of a dominant position in the
market for foliar insecticides for use in forage crops in
France.

INSECTICIDES FOR POTATOES

leader

[20 to 30]* %.

(427) The market leader for potato insecticides in the EEA is
Aventis with a share of [40 to 50]* %, followed by the
parties with [10 to 20]* %. Aventis' lead results from its
strong position on the Dutch market which is by far the
most important market in terms of sales in the EEA.
The parties will become the market
in two
national markets. In Belgium Syngenta would account
for [40 to 50]* % of the market, followed by Aventis
In France the parties
with around,
would have [60 to 70]* % of the sales, followed by
Aventis with [10 to 20]* %. Both markets are small
markets with sales of EUR […]* and EUR […]*
respectively, down from EUR […]* and EUR […]*
respectively in 1997. The market shares for AstraZeneca
includes also soil insecticides whereas Novartis does not
combined
manufacture nematocides. Therefore,
market share for
for
which there is an overlap, is slightly lower. This could
have the effect that in Belgium the market share of the
parties is below [30 to 40]* % and closer to the market
share of
the
Commission does not need to decide on the basis of
these elements whether the notified operation would
lead to the creation of a dominant position on the

second largest player. However,

insecticides in potatoes,

foliar

the

the

as

for

insecticides

any
potato
Belgian market
competitive problems would be removed as a result of
the implementation of the commitments submitted for
the
French, German, Belgian and Danish cereal
insecticide markets, French forage crop and French
potato insecticide markets where the merger is found to
lead to the creation of a dominant position.

(428) Novartis claims that its product portfolio is ageing. Its
sales in France (and Belgium) were derived almost
exclusively from its pyrethroid tau-fluvalinate (Mavrik)
which is going to lose patent protection in 2000.
However, Novartis has two new foliar insecticides in the
pipeline for which registration is sought beginning in
2000. Novartis is in the process to launch the new
active ingredient pymetrozine, which, according to
is a unique chemistry giving outstanding
Novartis,
control of aphids and sucking pests. This product has a
novel mode of action and is designed to substitute OPs,
carbamates and pyrethroids. Registration in the major
EEA potato farming countries is foreseen for 2000 and
2001. In addition, Novartis is going to launch the new
active ingredient
thiomethoxam […]*. Thiamethoxam
belongs to the modern class of neonicotinoids and has,
according
an
outstanding performance against both sucking and
chewing insects. Moreover, it can be used to control soil
insects as well.
In addition, AstraZeneca has recently
launched fosthiazate, a new nematicide, it distributes for
ISK in Great Britain. Consequently, the strong position
of the parties in France is likely to be kept by the
parties,
since competing new products by Aventis
(Acetamiprid) and Bayer (Thiacloprid ) will be launched
only in […]* and the impact of at least one of the
products is unlikely to be substantial (84).

to Novartis

documents,

internal

(429) For the above reasons, namely the parties accounting
for [60 to 70]* % in France; the second largest player,
Aventis, only having one-third of the parties' market
share; and the parties' introducing a very promising new
substance already this year, several years in advance of
Aventis, the concentration will lead to the creation of a
dominant position in the market for foliar insecticides
for use in potatoes in France.

INSECTICIDES FOR VEGETABLES

(430) Total sales in the EEA account for about EUR […]*.
leader with a

Syngenta would become the market

(84) [Competitors business secret]*

16.4.2004

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Official Journal of the European Union

L 110/65

market share of [20 to 30]* %, followed by Bayer with
[20 to 30]* %, Aventis with [10 to 20]* % and
American Cyanamid with [5 to 10]* %. The parties
would become the clear market leader in Germany and
France. The German market accounted for EUR […]*, of
which Syngenta would have [40 to 50]* %. Novartis
adds only [0 to 5]* % to AstraZeneca's [40 to 50]* %.
Therefore, in the case of Germany, it can be assumed
that in view of the extremely small addition of market
share the leading position of AstraZeneca will not
materially be changed. The French market of insecticides
for vegetables accounted for total sales of EUR […]* in
1998. Syngenta will become the clear market
leader
with [40 to 50]* % (AZ [20 to 30]* % + N [10 to
20]* %). Aventis would become the number two with
[20 to 30]* %. The parties were able to increase their
market share from 1997 to 1998 from [30 to 40]* % to
[40 to 50]* %; this in a broadly stable market.

and

(431) The parties argue that they focus on different crops and
insects. Novartis' portfolio is based on the
types of
active
cyromazine.
ingredients
abamectin
Abamectin is mainly sold for use in greenhouses to
control mainly, but not only leafminers, mites and
thrips in tomatoes. Cyromazine is mainly sold for the
selling
control of
lambda-cyhalothrine
the
control of aphids on the open field vegetable crops.
these boundaries between greenhouse and
However,
open field as well as between the various types of
such as
vegetables are not
to constitute separate
markets. Moreover,
the parties would have a large
portfolio of key molecules, which enables them to offer
complete solutions for the crop problems.

in lettuce. Zeneca is
and pirimicarb, used for

leafminers

(432) Furthermore,

the parties argue that

there is generic
competition for Novartis' active ingredients and that its
products will also be targeted by the introduction of
new products by competitors Aventis (Acetamiprid),
American Cyanamid (Clorfenapyr), Dow (spinosad) and
DuPont
(indoxacarb), whereas Novartis has only one
new product to be introduced in France, pymetrozine.

(433) Dow's new product spinosad is the most promising of
all competitors' new products. Sales in France will start
in […]*. Sales projections for 2003 are EUR […]*. The
introduction of the other new products will not have a
sizeable impact on the position of the parties. Aventis's
new active ingredient will only be introduced in[…]*,
well after
the new product by
Novartis.
Its sales projections are […]*. Cyanamid's
Chlorfenapyr will not be marketed in France before
[…]* and is for use in greenhouses only. It will not have

the marketing of

a material impact on the market. DuPont's new product
indoxacarb will first be marketed in France in […]*. It
has a very narrow spectrum. Therefore, projected sales
for 2003 are only […]*.

(434) The sale of Novartis' pymetrozine in France starts in
2000. Pymetrozine is described in Novartis' own papers
as a vital growth product. Sales projections for […]* are
[…]* times the sales in 1999 when the product was first
introduced in Europe. Already in 2001 it is forecast to
achieve sales equivalent to around [5 to 10]* % of the
EEA market. These sales projections put pymetrozine at
the same footing the Dow's new product
least at
spinosad. However,
the parties will have the largest
customer base today, with a market share of [40 to
50]* % as opposed to Dow with less than [5 to 10]* %.
the parties in
the strong position of
Consequently,
France is likely to be maintained.

(435) For the above reasons, namely increased sales of the
parties in a stable market; the parties combined market
share of [40 to 50]* % being more than twice that of
its nearest competitor; the parties having one of only
two new promising substances, the other belonging to a
player that is today very small, the concentration will
lead to the creation of a dominant position in the
market for foliar insecticides for use in vegetable crops
in France.

Conclusion on insecticides

(436) Taking into consideration all

the above factors,

the
Commission considers that the proposed merger will
create a dominant position on the national markets for
in Belgium, Denmark,
foliar
France and Germany, forage crops in France, potatoes in
France and vegetables in France.

insecticides

in cereals

C.5 PLANT GROWTH REGULATORS

(437) The parties' products overlap for

plant

growth
regulators for ornamentals in Belgium, France and the
Netherlands. The single largest market is the Netherlands
with total sales of EUR […]* where, according to the
parties, Novartis had a [40 to 50]* % market share in
1998 and [30 to 40]* % in 1999, while AstraZeneca
had [10 to 20]* % in 1998 and [5 to 10]* % in 1999.

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Official Journal of the European Union

16.4.2004

In France total sales are worth EUR […]* and Novartis
has a [70 to 80]* % market share in 1998 and around
[50 to 60]* % in 1999, while AstraZeneca had […]* in
1998 but [5 to 10]* % in 1999.
In Belgium, sales
account for EUR […]*. Novartis had in 1998 [50 to
60]* % and [50 to 60]* % in 1999, while AstraZeneca
had [30 to 40]* % in 1998 and [20 to 30]* % in 1999.
According to the parties, the only other major players
in these markets are Fine AgroChemicals with [40 to
50]* % market share in the Netherlands in 1998, [40 to
50]* % in the Netherlands in 1999, [10 to 20]* % in
France in 1998 and approximately [10 to 20]* % in
France
with
Dow
approximately [10 to 20]* % in Belgium in both 1998
investigation has, however,
and 1999. The market
shown that
the parties' data may be overstating the
position of Fine Agrochemicals; in the Netherlands the
parties' combined market share could thus be as high as
[60 to 70]* %.

AgroSciences

1999,

and

Bonzi product sold into ornamentals in the United
States. This fact means that
it would become more
delicate for UniRoyal to change distributor for Alar after
the merger.

(441) The

the

in plant growth regulators

concentration would combine

two most
important brands
for
ornamentals in both Belgium and the Netherlands. The
competition given to Alar by Dazide would be made
less efficient by the addition of Bonzi, which is the main
other type of plant growth regulator, to the portfolio of
Novartis.
the strong position of Novartis
would be further strengthened by the addition of Bonzi.

In France,

(438) The parties state that the whole of Novartis' business is
based on the non-exclusive distribution of products of
which the trademark and the registrations are owned by
the originator, UniRoyal. The parties also indicate that
important active ingredient,
daminozide is the most
accounting for [60 to 70]* % of total sales in the EEA.
Daminozide
and Fine
is produced by UniRoyal
AgroChemicals. Novartis sells UniRoyal's product under
the trade name Alar in Belgium, the Netherlands and
France (Alar 65 in the Netherlands and Alar 85 in
Belgium and France). In Belgium and the Netherlands,
Fine Chemicals sells its formulations under the trade
name Dazide and other trade names to a number of
local distributors while Dazide in France is distributed
by the SIPCAM group. Novartis considers that each
producer's products accounts for around half of
the
daminozide sales.
In Belgium Novartis has also been
selling Atrinal. This product has, however, been
removed from Novartis' range, and stocks will be sold
out by the end of 2000.

(442) For these reasons, the concentration would lead to the
creation or strengthening of a dominant position in the
markets for plant growth regulators in Belgium,
the
Netherlands and France.

C.6 SEED TREATMENT FOR CEREALS IN SPAIN

(443) The market for cereal seed treatment in Spain totalled
sales of EUR […]* in 1998. AstraZeneca is the market
leader with a market share of [50 to 60]* %. Novartis
has a market share of [5 to 10]* %. Aventis would be
the number two with a market share of [10 to 20]* %.

(444)

It may be noted that AstraZeneca is not active outside
Spain in seed treatment for cereals. However, overall in
the EEA, Novartis is the clear market leader with [50 to
60]* % (number one or two in most other Member
States).

(439) AstraZeneca's product Bonzi

is based on the active
ingredient paclobutrazol. AstraZeneca markets Bonzi in
Belgium and the Netherlands, while Bonzi in France is
distributed by Etablissement Puteaux. In the Netherlands
AstraZeneca furthermore distributes a product Berelex
of Abbott Labs in two formulations. Abbott Labs sells
the
companies under
different brand names.

formulations

to other

same

(445) AstraZeneca's business is based entirely on formulations
of an off-patent active substance, maneb, sourced from
third parties. [50 to 60]* % of sales relate to products
containing only this substance, [30 to 40]* % relate to
mixtures with
substance
manufactured and originally patented by AstraZeneca
(permethrin), and only [5 to 10]* % (equivalent to [5 to
relate to mixtures with an
10]* % market
AstraZeneca patented active substance.

off-patent

share)

active

an

(440) Despite the fact that Novartis' distribution agreement is
non-exclusive, it seems that there is currently no other
Furthermore,
distributor
the
UniRoyal

is AstraZeneca's exclusive licensee for

for UniRoyal's

product.

(446) The parties claim that AstraZeneca's position is not
three generic
sustainable in view of
manufacturers
products.
offering
However, although these generic manufacturers offer a
product that they consider to be of similar technical

straight maneb

the presence of

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quality and despite the fact that they are already some
considerable time on the market, AstraZeneca maintains
its high market share. The parties also indicate that
[…]*.

foliar insecticide markets:

— cereals in Belgium, Denmark, France and Germany,

Therefore, the Commission considers that the proposed
operation may lead to the creation of a dominant
position on the market for seed treatment for cereals in
Spain.

CONCLUSION

(447) The Commission has come to the conclusion that the
transaction as originally notified is incompatible with
the common market and the functioning of the EEA
agreement, since it would lead to the creation of a
dominant position in the following markets:

— forage crops in France,

— potatoes in France,

— vegetables in France;

seed treatment markets:

— cereals in Spain;

plant growth regulators:

fungicide markets:

— ornamentals
France.

in Belgium,

the Netherlands

and

— cereal

fungicides in France, Germany,

the United

Kingdom, Denmark, Sweden and Finland,

— sugar beet
Belgium,

fungicides in France,

Italy, Spain and

— potato fungicides in Sweden,

D. COMMITMENTS

FUNGICIDES

— fungicides to treat powdery mildew in grapes in
Austria and fungicides to treat botrytis in grapes in
Austria and France;

CEREAL FUNGICIDES

herbicide markets:

— maize

herbicides
Netherlands and Belgium,

in

France, Germany,

the

— potato herbicides in Belgium and France,

— post-emergence
Denmark,

graminicides

in

potatoes

in

— post-emergence graminicides in sugar beets in the

United Kingdom, Belgium and Denmark,

— post-emergence graminicides

in oilseed crops in

Germany, the United Kingdom and Denmark,

(448) The parties have undertaken to divest the worldwide
strobilurin fungicide business of Novartis,
including
trifloxystrobin and the mixtures with cyproconazole and
propiconazole as well as the production unit in Muttenz
where cyproconazole and (parts of) trifloxystrobin are
currently manufactured. The purchaser would have
access to, or supply of propiconazole and the relevant
intermediates needed to produce trifloxystrobin. The
to toll-manufacture
to agree
purchaser will have
cyproconazole for Novartis for its non-trifloxystrobin
related needs.

(449)

In addition to the rights to the strobilurin fungicide
business, the purchaser receives the right to produce
and sell under its own trade name products based on
straight cyproconazole in the EEA. During a maximum
period of five years, Syngenta will have no rights to sell
product based on straight cyproconazole in the EEA.

— herbicides for fruits and nuts in France;

(450) The parties have also offered to divest AstraZeneca's
world-wide business in the active substance flutriafol

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(except for the mixtures with azoxystrobin), a substance
accounting for some very limited sales as a cereal
fungicide.

(451) Furthermore, the parties have committed to divest the
whole of Novartis' current
(meaning non-strobilurin)
cereal fungicide formulations in Denmark, Sweden and
Finland.

the

is forecast

In addition,

trifloxystrobin-plus-
sugar beets.
cyproconazole mixture will also be registered for sugar
beets where it
to become an important
product (around [10 to 20]* % market share). On this
basis,
that no dominant
position will be created on these markets and that the
competition concerns expressed in the statement of
objections are thus eliminated.

the Commission considers

(452) The

divestiture

of Novartis'

strobilurin fungicide
business will maintain competition in the important
(and growing)
strobilurin segment between three
companies: Syngenta, BASF, and the purchaser. On the
basis of the sales forecasts of all major companies, the
divestiture will reduce Syngenta's estimated market share
for 2004 by [5 to 10]* % in Germany, [10 to 20]* %
in France and [10 to 20]* % in the United Kingdom,
thereby giving Syngenta an estimated future market
share of below [30 to 40]* % in those countries and, at
most, [0 to 5]* % more than BASF. Moreover,
it is
the merged entity would withdraw its
unlikely that
straight strobilurin products from the market as the
purchaser would still commercialise such a product.
Therefore,
the merged entity would not be in the
position to cause the loss of sales opportunities for the
competitors
for
tank-mixing. Whereas the merged entity will still have
the chance to develop new mixtures on the basis of
AstraZeneca's strobilurins and Novartis' (or third party's)
strobilurin purchaser
non-strobilurin products,
will have the possibility to do this (in the same time
period) with the trifloxystrobin product portfolio and
his own proprietary
substances.
By granting the exclusive rights to produce and sell
straight cyproconazole in the EEA in the start-up
period to the
the merged
entity will not be in a position to undermine the
potential of the trifloxystrobin business,
including the
trifloxystrobin-plus-cyproconazole mixture.

strobilurin purchaser,

non-strobilurin

third party)

products

with

the

(or

(453) The divestiture of Novartis' current portfolio in the
Nordic countries eliminates the overlap on the Danish,
Swedish and Finnish markets.

(454) On this basis,

the Commission considers

that no
dominant position will be
cereal
fungicide markets and that the competition concerns
expressed in the statement of objections are thus
eliminated.

created on the

SWEDISH POTATO FUNGICIDE MARKET

(456) The parties have undertaken to transfer to the original
rights holder the whole of
their EEA-wide business
derived from the mixture Epok (fluazinam, an ISK
substance).
substance, and metalaxyl-m, a Novartis
Syngenta will
the sole use
supply metalaxyl-m for
within Epok to the company to whom ISK will grant
the Epok rights. The only other product that Novartis
sells on the Swedish potato fungicide market is Ridomil
MZ (metalaxyl + mancozeb). The registration for this
product has been revoked with effect from 31 March
2001 and will not be
the
commitment has the effect of eliminating the overlap on
the Swedish potato fungicide market. On this basis, the
Commission considers that no dominant position will
be created on this market and that
the competition
concerns expressed in the statement of objections are
thus eliminated.

replaced. Therefore,

AUSTRIAN MARKET FOR FUNGICIDES TO TREAT POWDERY
MILDEW ON GRAPES

trifloxystrobin.

(457) The divestiture of the trifloxystrobin business will also
have on effect on this market as powdery mildew on
grapes is one of
In
the strengths of
addition, the parties have undertaken to divest Novartis'
product based on penconazol, accounting for a [20 to
30]* % market share in 1999, reducing the merged
entity's market share to [20 to 30]* %. On this basis,
the Commission considers that no dominant position
will be created on this market and that the competition
concerns expressed in the Statement of Objections are
thus eliminated.

SUGAR BEET FUNGICIDE MARKETS

FRENCH AND AUSTRIAN MARKETS FOR FUNGICIDES TO
TREAT BOTRYTIS ON GRAPES

(455) The parties offer to divest AstraZeneca's world-wide
flutriafol business would totally eliminate the overlap for

(458) The parties have undertaken to transfer the distribution
the products Sumisclex and Sumico

agreement

for

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within the EEA back to Sumitomo together with the
technical database and documentation. Hereby the
parties have eliminated most of
the overlap. The
remaining AstraZeneca substance, fluazinam, accounts
for sales of around [0 to 5]* % (with a potential to
reach [5 to 10]* %). The remaining pro forma market
share of the merged entity would be below [30 to 40]*
% and similar to that of Aventis.

future market potential (for which reason EPTC will not
be submitted in the Community review process) In any
event, Syngenta will be faced with strong competition in
the pre-emergence segment stemming from the divested
acetochlor.

company

(459) The overlap on the Austrian market is created by an
Austrian
AstraZeneca's
chlorothalonil. The parties have committed to grant this
distributor a letter of access to AstraZeneca's database
whilst
to source
chlorothalonil from a generic producer, thereby making
the distributor independent from the merged entity.

distributor has

distributing

right

the

the

(460) On this basis,

the Commission considers

that no
dominant position will be created on these markets and
expressed in the
that
statement of objections are thus eliminated.

competition concerns

the

(464)

active

removes

substance

the current overlap that

In the segment of post-emergence broadleaf control, the
parties have formally offered to divest their business
sulcotrione. This
based on the
commitment
the
parties have in the segment of post-emergence broadleaf
control. While it is true that the parties will gradually
introduce the new AstraZeneca product mesotrione as
of […]*, sulcotrione is considered to be a product that
is able to remain a strong product in the future and a
product
competitive
continue
constraint to Syngenta's current and future products.

that will

to be

a

HERBICIDES

MAIZE HERBICIDES

(461) The parties have submitted the following undertakings

relating to the maize herbicides market.

(465)

In order
to remove the overlap in the segment of
post-emergence grass control in France, the parties have
offered to stop commercialising straight atrazine in
France and to hand back related trade names to the
owners. This should allow competing generic atrazine
in France to capture most of Novartis'
companies
current share in this segment of [10 to 20]* % (total
market share: [0 to 5]* %). This commitment, and the
fact
that Aventis is co-distributor of nicosulfuron in
France, has led the Commission to the conclusion that
the specific
no competitive concerns remain as for
segment of post-emergence grass control in France.

(462)

grass

names),

know-how,

the whole of

segment of pre-emergence

formulations and mixtures, all

control,
In the
AstraZeneca has offered to divest
its
worldwide business with the active substance acetochlor,
including all
related
intellectual property rights (in particular patents and
trade
and
registration
involves
AstraZeneca's transferring to the entity obtaining the
acetochlor business all related contracts with Monsanto,
the registration and
including the partnerships
production
registration
acetochlor
of
the
In addition, AstraZeneca will
arrangement in Europe.
divest the safener dichlormid in favour of the company
acquiring the acetochlor business.

documentation

commitment

rights.

This

and

for

(463) The acetochlor commitment

removes most of

the
(potential) overlap that the parties would have in the
segment of pre-emergence grass control. AstraZeneca
only retains the product EPTC in this segment, but this
product is an old niche product without very much

(466) On the basis of
acetochlor,
the
combined market share will be, after remedies:

the proposed commitments on
parties'

sulcotrione

atrazine,

and

(%)

1998 market
share

1998
post-remedy

1999
current
share

1999
post-remedy

EEA

[40-50]*

[30-40]*

[40-50]*

[30-40]*

FR

DE

NL

BE

[50-60]*

[30-40]*

[50-60]*

[30-40]*

[40-50]*

[30-40]*

[40-50]*

[30-40]*

[60-70]*

[30-40]*

[60-70]*

[20-30]*

[50-60]*

[20-30]*

[50-60]*

[20-30]*

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share post-divestiture:

(467) The three commitments offered amount to the complete
elimination of the current overlap in three of the four
problematic maize herbicides markets, namely Germany
(market
[30 to 40]* %),
Netherlands ([20 to 30]* %) and Belgium ([20 to 30]*
%). In France, there is a market share reduction to [30
to 40]* %. As the package also includes the newly
introduced acetochlor, the Commission considers that
no dominant position will be created on those markets
and that
the competition concerns expressed in the
statement of objections are thus eliminated.

licences, and for other products terminate distribution
agreements with third parties)
its entire portfolio of
selective grape herbicides for which registrations are still
valid (85). The competition problem identified by the
Commission in the statement of objections was the
the promising products Katana and
combination of
Mission based on flazasulfuron with Novartis' strong
position in the selective grape herbicide segment. On
this basis, the Commission considers that no dominant
position will be created on this market and that the
competition concerns expressed in the statement of
objections are thus eliminated.

POTATO HERBICIDES IN FRANCE AND BELGIUM

INSECTICIDES

(468) The parties have undertaken that Novartis will divest the
its EEA-wide business derived from the
whole of
Igrater. This
Patoran and
formulations
herbicide
the overlap from the
undertaking will
proposed concentration in the Belgian and French
markets
the
Commission considers that no dominant position will
be created on these markets and that the competition
concerns expressed in the statement of objections are
thus eliminated.

for potato herbicides. On this basis,

eliminate

POST-EMERGENCE GRAMINICIDES IN POTATOES, SUGAR
BEETS AND OILSEED CROPS

of

its

derived

business

EEA-wide

(469) The parties have undertaken that Novartis will divest the
whole
from
formulations which are based on the active substance
propaquizafop and are sold for use on broadleaf crops
(potatoes, sugar beets, oil seed crops, soybeans, cotton,
and vegetables) in the EEA (Agil/Falcon brand names).
This undertaking will eliminate the overlap on all
national markets for post-emergence graminicides in
potatoes, sugar beets and oilseed crops. On this basis,
the Commission considers that no dominant position
will be
the
competition concerns expressed in the statement of
objections are thus eliminated.

created on these markets

and that

(471) The parties undertake

intellectual

to sell Novartis worldwide
pyrethroid business based on the active ingredient
(in particular
including brand-names
taufluvalinate,
Mavrik),
rights,
related
all
know-how,
documentation and registration rights.
Novartis will also transfer to the purchaser the benefit
of its rights under the supply agreement with BASF. In
addition, the parties also undertake to grant an exclusive
licence for AstraZeneca's straight pirimicarb,
including
the brand name Pirimor, for use on vegetables and other
crops in France.

property

taufluvalinate

business will

(472) The proposed undertakings will have the effect to either
eliminate the overlap or bring the market share of the
parties to clearly below [30 to 40]* %. The sale of
Novartis'
completely
eliminate the overlap for insecticides in potatoes and
eliminate almost completely the overlap in insecticides
for
for
AstraZeneca's pirimicarb straight reduces the market
share of the parties for insecticides on vegetables by
[5 to 10]* % to [30 to 40]* %. On this basis, the
Commission considers that no dominant position will
be created on these markets and that the competition
concerns expressed in the statement of objections are
thus eliminated.

crops. The

licence

cereals

forage

and

PLANT GROWTH REGULATORS

HERBICIDES FOR FRUITS AND NUTS IN FRANCE

(470) The parties have undertaken that AstraZeneca will
its distribution agreement with ISK for
terminate
[Alternatively]*,
in France.
flazasulfuron for
Novartis will basically divest (for some products, give

vines

(85) The Commission takes note of the fact that the registrations for
the products Axian and Caragard expired in April 1998. These
products are therefore not included in the commitment.

(473) The parties have undertaken that Novartis will cease to
sell the Alar branded products within the EEA and will

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terminate its distribution agreement with Uniroyal or
assign to a third party named by Uniroyal the rights
currently held by Novartis for the distribution of this
product
in the EEA. This undertaking eliminates the
overlap in the markets for plant growth regulators in
Belgium, the Netherlands and France. On this basis, the
Commission considers that no dominant position will
be created on this market and that
the competition
concerns expressed in the statement of objections are
thus eliminated.

notified on 18 February 2000 whereby the undertakings
Novartis AG (Novartis) and AstraZeneca plc will spin off and
merge their activities in the area of crop protection into a
newly incorporated company, Syngenta AG (Syngenta) and
whereby Novartis will also transfer
its seeds business to
is compatible with the common market and the
Syngenta,
functioning of the EEA Agreement.

Article 2

SEED TREATMENT FOR CEREALS IN SPAIN

This Decision is addressed to:

(474) The parties have committed to divest the AstraZeneca
seed treatment business in Spain and will give the
purchaser access to the necessary active substances,
if
required. On this basis, the Commission considers that
no dominant position will be created on this market
the competition concerns expressed in the
and that
statement of objections are thus eliminated,

HAS ADOPTED THIS DECISION:

Novartis AG
Schwarzwaldallee 215
CH-4058 Basel
Switzerland

AstraZeneca PLC
15 Stanhope Gate
London W1Y 6LN
United Kingdom

Article 1

Done at Brussels, 26 July 2000.

Subject to the parties' full compliance with the commitments
summarised in recitals 18, 403 and 448 to 474, and set out in
the concentration
detail

in Annexes I and II respectively,

For the Commission

Mario MONTI

Member of the Commission

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ANNEX I

The full original text of the conditions and obligations referred to in Article 1 may be consulted on the following
Commission website:

http://europa.eu.int/comm/competition/index_en.html

ANNEX II

The full original text of the conditions and obligations referred to in Article 1 may be consulted on the following
Commission website:

http://europa.eu.int/comm/competition/index_en.html