CELEX: 32015M7565
Language: en
Date: 2015-07-17 00:00:00
Title: Commission Decision of 17/07/2015 declaring a concentration to be compatible with the common market (Case No COMP/M.7565 - DANISH CROWN / TICAN) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 17.7.2015
C(2015) 5104 final

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                 To the notifying party:

Dear Sirs,

Subject:    Case M.7565 – Danish Crown/ Tican
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1] and Article 57 of the Agreement  on  the  European  Economic
Area[2]

   1) On 3 June 2015, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by
      which Leverandørselskabet Danish Crown Amba (‘Danish Crown’, Denmark) and Andelsselskabet Tican Amba (‘Tican’, Denmark) enter into a merger
      within the meaning of Article 3(1)(a) of the Merger Regulation (‘the Transaction’).[3] Danish Crown and Tican are designated hereinafter as
      the ‘Parties’.

       THE PARTIES

   2) Danish Crown is the ultimate parent company of the Danish Crown Group, an international food  company  based  in  Denmark  with  activities
      across the globe. Danish Crown itself is a cooperative owned by its members, who supply raw  materials  (pigs,  sows  and  cattle)  to  the
      cooperative. Danish Crown has 8 878 cooperative members (2013/2014) of which 5 691 are cattle producing  members  and  3 990  pig  and  sow
      producing members.[4]

   3) Tican is the second largest (and only other) co-operative pig slaughterhouse  in  Denmark.  Tican  is  vertically  integrated  through  its
      subsidiaries in the slaughtering of pigs (Denmark) and meat processing (Denmark, Poland and the UK). Tican has sales worldwide.  Tican  has
      277 members who supply pigs and sows to the slaughterhouse.

   4) Neither Danish Crown nor Tican have any non-Danish cooperative members.

       THE OPERATION AND THE CONCENTRATION

   5) According to the terms of the merger agreement of 24 February 2015, Tican will be dissolved without liquidation by way of a transfer of all
      of its activities, assets and liabilities to Danish Crown. The member farmers of Tican will collectively join Danish Crown,  thus  becoming
      cooperative members of the latter.

   6) The operation therefore constitutes a concentration pursuant to Article 3(1)(a) of the Merger Regulation.[5]

       UNION DIMENSION

7) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000  million  (Danish  Crown:  EUR 7 779  million,
   Tican: EUR 692 million).[6]. Each of them has a Union-wide turnover in excess of EUR 250 million (Danish Crown: EUR […], Tican: EUR […]),  but
   neither of the undertakings concerned achieves more than two-thirds of its aggregate Union-wide turnover within one and the same Member State.
   The notified operation therefore has a Union dimension pursuant to Article 1(2) of the Merger Regulation.

       REFERRAL TO DENMARK

   8) By a letter dated 22 June 2015 the Danish Competition and Consumer Authority ('DCCA'), on behalf of the Kingdom of Denmark,  requested  the
      Transaction to be partially referred to the competent DCCA with a view to assessing the effects of the Transaction in Denmark under  Danish
      national competition law, pursuant to Article 9(2)(a) of the Merger Regulation.

   9) On the same date as this decision and in reply to that request, the Commission addressed to the Kingdom of  Denmark  a  decision  partially
      referring the case ('the Referral Decision').

  10) Therefore, only the remainder of the Transaction, which primarily concerns Poland, Sweden and the UK[7], will be assessed by the Commission
      in the present decision.

  11)  This decision is without prejudice to the outcome of the proceedings conducted by the DCCA in charge of the assessment of the  effects  of
      the Transaction on the relevant markets in Denmark.

       ASSESSMENT

1 The Parties' activities

  12) The Parties are both vertically integrated and active in several markets along the pig meat value chain  and  across  a  number  of  Member
      States.

  13) In the past[8], the Commission identified several relevant product markets along the pig value chain.[9] The  product  markets  which  give
      rise to affected markets[10] outside Denmark and as such are not covered by the Referral Decision are accordingly to  be  hereby  assessed,
      notably:

a. Sale of fresh pig meat for further processing;

        b. Sale of processed products (which can be further split into various sub-segments).

  14) Both Danish Crown and Tican sell pig meat to industrial processors all over Europe and use a considerable portion of their raw pig meat  in
      their own processing plants.

  15) Danish Crown has its largest fresh pig meat production capacity (i.e. slaughterhouses) in Denmark, but also  produces  fresh  pig  meat  in
      Germany, Sweden, Poland and the United Kingdom through its local subsidiaries.[11] Within the EU, Danish Crown has processing facilities in
      Denmark, the UK, Poland and in Sweden.[12]

  16) Tican has its only fresh pig meat production facilities in Denmark. Tican sells fresh meat to industrial processors among others to the UK,
      Denmark, Germany, Sweden and Poland. Tican has processing facilities in Poland and the UK.[13]

2 Relevant product markets

1 Sale of fresh pig meat for further processing

  17) Fresh pig meat comprises fresh, frozen and minced pig meat that has not undergone further processing, i.e. no other ingredients  or  spices
      have been added, nor has the meat been cooked, smoked or dried.

  18) Fresh pig meat is either sold for fresh meat consumption or to processors. In the past, the Commission has considered the sale of fresh pig
      meat for further processing and the sale of fresh pig meat for direct human consumption as belonging to two separate  product  markets.[14]
      The Parties do not contest this market definition.

  19) A majority of the respondents to the market investigation questionnaires confirmed[15] the Commission's earlier findings  namely  that  the
      sale of fresh pig meat for further processing constitutes a separate product market from fresh pig meat for direct human consumption.[16]

  20) For the purpose of this decision, the exact product market definition with regard to the sale of fresh pig meat for further processing  can
      be ultimately left open as the Transaction does not raise serious doubts as to  its  compatibility  with  the  internal  market  under  any
      alternative product market definition.

2 Sale of processed meat products

  21) The Commission defined[17] processed meat products as pork, beef or poultry meat containing external ingredients such as  salt  or  spices,
      being raw, dried smoked or cooked. Processed meat products include a wide range of different products that  differ  in  terms  of  the  raw
      material used (i.e. pork, beef and poultry), ingredients used  (spices,  water  content),  heat  treatment  (smoked  or  boiled),  portion,
      packaging and temperature.

  22) The Commission considered in the past[18] that the processed variety of products sold in different Member States  can  be  grouped  in  the
      following categories, while the precise market definition has however been left open:

        a. raw cured products;

        b. processed meat for cold consumption (cold cuts or charcuterie);

        c. canned meat;

        d. cooked sausages;

        e. pâtés and pies;

        f. ready prepared dishes and components for such (convenience products).

  23) Further sub-segmentations within these categories, such as raw sausages or bacon products was left open in the past.[19]

  24) The Commission has also left open whether such product types should be further sub-divided according to the  meat  type  (i.e.  pig,  beef,
      etc.) used as raw material.[20]

  25) Moreover, the Commission has distinguished according to sales channel, i.e. retail and out-of home (‘OOH’,  i.e.  foodservice,  HoReCa  and
      catering).[21]

  26) The Parties generally agree with the past Commission's practice. With reference to the cold cuts and the convenience products, the  Parties
      argue against further segmenting them on the basis of the meat type.

  27) A majority of the respondents to the market investigation questionnaires confirmed the Commission's earlier definition and sub-segmentation
      within processed meat products.[22]

  28) The market investigation in the UK, in particular, indicated that it is important to distinguish processed products by  meat  type,  albeit
      for some processed products more than for others. The distinction for meat type seems to be most relevant for  bacon,  raw  cured  products
      (including raw sausages and bacon) and cold cuts.[23]

  29) A majority of UK respondents to the market investigation also confirmed that it is appropriate to identify pork bacon as a distinct  market
      within raw cured products.[24] On the other hand, while acknowledging that there are  some  key  distinguishing  features  of  a  so-called
      ‘premium segment’ for bacon, only half of UK respondents indicated that such distinct market might exist while the  other  half  spoke  out
      against such a distinct segment.[25] In case such a segment existed, it could be distinguished from ‘standard’ bacon through notably animal
      welfare (i.e. outdoor bread/free range) and the so-called dry-cure process.[26]

  30) The market investigation also supported a distinction between the retail and OOH sales channels.[27]

  31) For the purpose of this decision, the exact product market definition with regard to the  sale  of  processed  pig  meat  products  can  be
      ultimately left open as the Transaction does not raise serious  doubts  as  to  its  compatibility  with  the  internal  market  under  any
      alternative product market definition.

3 Relevant geographic markets

1 Sale of fresh pig meat for further processing

  32) In past decisions the Commission found indications that the geographic market for the sale of fresh pig meat for further  processing  could
      be either national or most likely wider than national or EEA-wide, and in the most recent cases left the market definition open.[28]

  33) The Parties submit the market is at least EEA-wide. The Parties argue that while import of fresh pig meat into the EEA is limited, there is
      also a considerable amount of export from the EEA to the rest of the world. Pig meat processors tend to procure raw  material  mainly  from
      traders. Sourcing takes place from processing facilities located in various countries. According to the Parties, in spite of  the  regional
      nature of many processed pig meat recipes, these products are often produced with pig meat imported from other Member States.

  34) Meat processors in the market investigation indicated that the origin of the meat has varying importance for the ultimate consumer when  it
      comes to their processed products.[29] Moreover, meat processors procure fresh pig meat from various  suppliers,  both  local  and  foreign
      ones.[30]

  35) For the purpose of this decision, the exact geographic market definition with regard to the sale of fresh pig meat for  further  processing
      can be ultimately left open as the Transaction does not raise serious doubts as to its compatibility with the  internal  market  under  any
      alternative geographic market definition.

2 Sale of processed pig meat products

  36) In past decisions, the Commission initially considered the geographic market to be wider than national,  but  decided  later  that  due  to
      suppliers' ability to price discriminate between different Member States a national geographic market delimitation was justified.  However,
      it was not ruled out that there were some markets for individual product groups of processed  meat  that  were  geographically  wider  than
      others. The market was subsequently left open in a number of cases.[31]

  37) The Parties submit that the products markets, regardless of product type and sales channel, are wider than national. This  is  because:  1)
      consumers are no longer focused on origin of meat and most processed products, both private label and branded,  are  therefore  essentially
      imported from processing facilities located in countries where production costs are low and where  it  is  possible  to  produce  processed
      products at more competitive prices; 2) brands are relatively less important than what they were in the past; and 3)  transportation  costs
      are low.

  38) Meat processors in the market investigation indicated that the origin of the meat is somewhat important for the ultimate consumer,  with  a
      varying degree depending on the final processed products. Origin seems to be more important in the retail than in the OOH segment.[32] Meat
      processors also indicated that they are exporting their processed meat products into several other EEA countries.[33]

  39) For pork bacon specifically, the majority of respondents to the market investigation  indicated  that  there  are  significant  differences
      between the UK and other EEA countries in terms of consumption habits and preferred national brands. There have been also  indications  for
      differences in terms of recipes.[34]

  40) For the purpose of this decision, the exact geographic market definition with regard to the sale of processed  pig  meat  products  can  be
      ultimately left open as the Transaction does not raise serious  doubts  as  to  its  compatibility  with  the  internal  market  under  any
      alternative geographic market definition.

4 Competitive Assessment

  41) The Transaction does not give rise to affected markets at EEA-level.

  42) At national level, outside Denmark, the Transaction gives rise to horizontally affected markets in the UK and in Poland, in particular,  to
      the following ones:

a. in the UK:

i. Sale of fresh pig meat for further processing;

ii. Sale of pork bacon;

        b. in Poland:

i. Sale of fresh pig meat for further processing.

  43) Furthermore, there are vertically affected national markets in the UK and Sweden to which the Transaction gives rise:

        a. in the UK: Sale of fresh pig meat for further processing (upstream) / Sale of several processed products,  among  others  pork  bacon
           (downstream);

        b. in Sweden: Sale of fresh pig meat for further processing (upstream) / Sale of several processed products (downstream).

1 The UK – Horizontal assessment

1 Sale of fresh pig meat for further processing

  44) Both Danish Crown and Tican supply fresh pig meat for further processing in the UK. Their combined market share at national  level  amounts
      to [40-50]% (Danish Crown [30-40]%, Tican [0-5]%). Competitors include Vion ([5-10]%), Karro Food Group ([5-10]%) and Cranswick ([5-10]%).

  45) The Parties submit that the increment is limited to [0-5]% and the majority of the sales the Parties perform in the UK are internal  sales.
      The Parties argue that the Transaction would not alter competitive dynamics in the market.

  46) No substantiated concerns have been raised by market participants. In particular, the market investigation confirmed that there are several
      current suppliers of fresh pig meat for further processing, including Vion, Tönnies, Eurofoods, Morphet, Cranswick, Karro  and  Dunbia.[35]
      Tican is not regarded as a major player on the UK market for fresh pig meat for further processing.[36] Moreover, a majority of respondents
      to the market investigations confirmed that they would be willing and able to find alternative suppliers to the merged entity.[37]

  47) The majority of meat processors confirmed that there will be sufficient competition post-Transaction to  prevent  the  merged  entity  from
      raising prices[38] and that the Transaction will not have any significant impact on the market for the sale of fresh pig meat  for  further
      processing in the UK.[39]

  48) In view of the above, the Transaction does not raise serious doubts as to its compatibility with the internal market with  respect  to  the
      sale of fresh pig meat for further processing in the UK.

2 Sale of processed pig meat products – Pork bacon

  49) The Transaction gives rise to affected markets in the UK in the sale of pork bacon. On this market,  the  Transaction  would  result  in  a
      combined market share of the Parties of [20-30]% (Danish Crown [10-20]%, Tican [10-20]%). Within pork bacon, the narrower segment of retail
      channel is also affected (combined market share of [20-30]%, Danish Crown [10-20]%, Tican [10-20]%).

  50) Following the Transaction, Danish Crown and Tican would be the most important supplier of pork bacon in the UK.  A  number  of  competitors
      would however remain both in the overall pork bacon market as well as in the narrower retail segment.[40]

  51) The Parties note that the merged entity will thus continue to face intense competition from local and  European  players  and  considerable
      countervailing buyer power from UK retailers. In addition, they claim that Danish Crown and Tican are predominantly private label producers
      (the production of private label bacon account for respectively [70-80]% and [80-90]% of their total supply to the UK retailers  in  2014).
      In their opinion, this implies that other producers can easily substitute them.

  52) No substantiated concerns were raised in the market investigations with regard to the sale of pork bacon.[41]

  53) In particular, the Parties are not regarded as closest competitors for the sale of bacon in the UK; Cranswick (also for premium bacon)  was
      named as the main competitor to the Parties, alongside  with  Karro.[42]  In  addition,  Terbeke,  Kerry  Foods,  Wood  Head  Brothers  and
      Winterbotham Derby were listed as current suppliers of bacon.[43] All retailers who responded to the market investigation considered having
      a significant buyer power vis-à-vis suppliers of pork bacon in the retail segment.[44]

  54) All retailers who have responded to the market investigation confirmed that there will be sufficient  competition  to  prevent  the  merged
      entity from raising prices in the UK post-Transaction both for pork bacon and for the potential narrower segment of premium pork bacon.[45]

  55) In view of the above, the Transaction does not raise serious doubts as to its compatibility with the internal market with  respect  to  the
      sale of bacon in the UK.

2 The UK – Vertical assessment

  56) A vertical relationship between the Parties exists in the UK insofar as Danish Crown and Tican sell fresh pig meat for  further  processing
      ([40-50]% combined market share, see paragraph (44) above) while they are active in the downstream market in processed pig meat products in
      the UK in several sub-segments. As set out above, the Parties' market share in the downstream market for the sale of bacon in retail is [20-
      30]%. All other market shares in the downstream markets for processed meat products remain well below [20-30]%.[46]

  57) The Parties consider that post-Transaction they will have neither the ability nor the incentive to  use  their  position  on  the  upstream
      market for the sale of fresh pig meat to foreclose competitors of processed products.

  58) According to the Parties, first, manufacturers of processed products in the UK are not dependent on Danish origin pig meat,  regardless  of
      the market definition. Second, considering the market share of the merged entity for the sale of fresh pig meat (in the UK or EEA-wide), UK
      processors will continue to have access to other suppliers, including vertically integrated companies. Third, the Parties'  meat-processing
      activities in the UK are not sufficiently developed to justify pursuing a foreclosure strategy.

  59) The Commission notes that given the modest combined market shares in the  downstream  markets,  customer  foreclosure  strategies  are  not
      likely.

  60) No substantiated concerns were raised in the market investigations  with  regard  to  input  foreclosure.[47]  It  is  noted  that  several
      competitors were named as suppliers of fresh pig meat for further processing in the UK, see paragraph (46) above.

  61) Moreover, the majority of meat processors in the UK confirmed that even if the merged entity reduced/stopped selling or  increased  selling
      prices for fresh pig meat for further processing to them, they would be able to find alternative suppliers for their pork bacon  production
      both in the UK and in the EEA.[48] According to the majority of meat processors, the merged entity would not have the incentive  to  engage
      in an input foreclosure strategy.[49]

  62) In view of the above, the Transaction does not raise serious doubts as to its compatibility with the internal market with  respect  to  the
      vertical relationships in the UK.

3 Poland – Horizontal assessment

  63) In Poland, the Parties' combined market share in the market for the sale fresh pig meat for further processing amounts to [20-30]%  (Danish
      Crown: [20-30]%, Tican [0-5]%). Competition is fragmented and the biggest competitors include Pini Polonia ([5-10]%), Animex ([5-10]%)  and
      PKM Duda ([0-5]%).

  64) The Parties submit that the increment is limited to [0-5]%. The Parties argue that the Transaction would not alter competitive dynamics  in
      the market.

  65) No substantiated concerns have been raised by market participants. In particular, Pini Polonia, PKM Duda, Z.M. Skiba and Food Service  were
      named as the closest competitors of the Parties for fresh pig meat for further processing.[50] No respondent to  the  market  investigation
      stated that they would be unable to find alternative suppliers to the merged entity.[51] No responding  Polish  meat  processor  considered
      that the Transaction will have an impact on the market for the sale of fresh pig meat for further processing in Poland.[52]

  66) In view of the above, the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to  fresh
      pig meat for further processing in Poland.

4 Sweden – Vertical assessment

  67) A vertical relationship between the Parties exists in Sweden. Danish Crown and Tican sell fresh pig meat for further  processing[53]  while
      they are active in the downstream market in processed pig meat products in Sweden  (cooked  pork  sausages  and  processed  pork  for  cold
      consumption), albeit with very low market shares and with a small increment.[54]

  68) The Parties consider that post-Transaction they will have neither the ability nor the incentive to  use  their  position  on  the  upstream
      market for the sale of fresh pig meat to foreclose competitors of processed products.

  69) The Commission notes first that Tican's share in the supply of those processed pig products in Sweden does not exceed [0-5]%. Moreover, the
      increment in market share in the upstream market is also minimal, being [0-5]%.

  70) The Commission notes that given the limited combined market shares in the downstream  markets,  customer  foreclosure  strategies  are  not
      likely.

  71) No substantiated concerns were raised in the market investigations with regard to input foreclosure. It is noted in particular that several
      competitors were named as suppliers of fresh pig meat for further processing in Sweden.[55] HKScan and Skövde slakteri were  named  as  the
      Parties' closest competitors.[56]

  72) Moreover, no responding meat processor in Sweden rejected the statement that even if the merged entity reduced/stopped selling or increased
      selling prices for fresh pig meat for further processing to them, they would be able to find alternative suppliers for processed  pig  meat
      production both in Sweden and in the EEA.[57] None of the responding Swedish meat processors stated that it would be of risk being deprived
      of sufficient access to fresh pig meat for further processing in Sweden or in  the  EEA  as  a  result  of  the  Proposed  Transaction.[58]
      According to the responding meat processors, the merged entity would not have the incentive to engage in an input foreclosure strategy.[59]

  73) In view of the above, the Transaction does not raise serious doubts as to its compatibility with the internal market with  respect  to  the
      vertical relationships in Sweden.

       CONCLUSION

  74) For the above reasons, the European Commission has decided not to oppose the notified operation and  to  declare  it  compatible  with  the
      internal market and with the EEA Agreement with regard to the markets outside Denmark. This decision is adopted in application  of  Article
      6(1)(b) of the Merger Regulation and Article 57 of the EEA Agreement.

For the Commission
(Signed)
Margrethe VESTAGER
Member of the Commission

-----------------------

[1]   OJ L 24, 29.1.2004, p. 1 (‘the Merger Regulation’). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
(‘TFEU’) has introduced certain changes, such as the replacement of ‘Community’  by  ‘Union’  and  ‘common  market'  by  ‘internal  market’.  The
terminology of the TFEU will be used throughout this decision.

[2]   OJ L 1, 3.1.1994, p.3 (‘the EEA Agreement’).

[3]   Publication in the Official Journal of the European Union No C 139, 11.06.2015, p. 10.

[4]   A member can have up to three memberships (cattle-, sow- and pig-membership).

[5]   The Transaction will also lead to sole control by the merged entity of SPF-Danmark A/S and Svineslagteriernes Varemærkeselskab  ApS,  which
are jointly controlled by Danish Crown and Tican at present. SPF-Danmark A/S is active in the trading and transport of live hogs, piglets,  etc.;
Svineslagteriernes Varemærkeselskab ApS holds trade mark registrations of the ‘Danish’ brand in the EU, Benelux, Denmark,  France,  Italy,  Great
Britain and Japan.

[6]   Turnover calculated in accordance with Article 5 of the Merger Regulation.

[7]   There is also an overlap between the Parties in Germany with regard to the sale of fresh pig meat for  further  processing,  which  however
does not give rise to an affected market and hence will not be further discussed in this decision.

[8]   For instance: M.1313 – Danish Crown/Vestjyske Slagterier and M.2662 – Danish Crown/Steff Houlberg.

[9]   The main ones being: purchase of live pigs for slaughtering; sale of fresh pig meat for further processing; sale  of  fresh  pig  meat  for
direct human consumption; sale of processed products, animal by-products.

[10]  In Sweden, the combined market share of the Parties in the market for sale of fresh pig meat for direct human  consumption  (overall,  i.e.
retail plus OOH) would be [20-30]%, but only with a minimal increment of [0-5]% (Tican). In the Swedish market for the sale  of  fresh  pig  meat
for direct human consumption (Retail), the combined market share would be [30-40]%, with an increment of  [0-5]%.  These  overlaps  will  not  be
further discussed in this decision.

[11]  KLS Ugglarps AB, Sweden, Danish Crown Fleisch GmbH, Germany, Sokolow S.A, Poland and Tulip Ltd., UK.

[12]  As regards processed meat, Danish Crown is active through its  subsidiaries:  Tulip  Ltd.  (UK),  Tulip  Food  Company  (Denmark),  Sokolów
(Poland) and PlumroseUSA (USA).

[13]  Tican is active on these markets through its subsidiaries: Tican Foods that sells processed products to the  Danish  market  ([…]),  Direct
Table Foods that produces bacon for the UK market, Pro-Pak Foods that produces chilled convenience products for the  UK  market  and  the  Polish
based ZM Nove that primarily produces sausages, cold cuts and sous wide products […].

[14]  See for instance M.1313 – Danish Crown/Vestjyske Slagterier, paragraph 49, M.2662 – Danish Crown/Steff-Houlberg, paragraph 53 and M.3401  –
Danish Crown/Flagship Foods, paragraphs 8–9.

[15]  See replies to Questions 5 and 6 of Q4 – Questionnaire to meat processors – UK.

[16]  Although in earlier cases sub-segments such as ‘pig heads’ (M.3605 – Sovion/HMG) or ‘half-carcasses’ (by the German Bundeskartellamt in  B2
- 36/11 - Tönnies/Tummel) within the market of sale of fresh pig meat for further processing have been considered,  these  distinctions  are  not
relevant for the current case. Neither is a distinction between pigs and sows relevant, a segmentation which  has  been  earlier  considered  for
slaughtering activities by both the Commission (e.g. M.3337 – Best Agrifund/Nordfleisch) and the Bundeskartellamt (Tönnies/Tummel).

[17]  M.1313 – Danish Crown/Vestjyske Slagterier, M.2662 – Danish Crown/Steff-Houlberg, M.3522 –  Danish Crown/HK/Sokolow.

[18]  M.3337 – Best Agrifund/Nordfleisch, M.3401 – Danish Crown/Flagship Foods.

[19]  M.3401 – Danish Crown/Flagship Foods.

[20]  M.3401 – Danish Crown/Flagship Foods.

[21]  M.3401 – Danish Crown/Flagship Foods.

[22]  See replies to Questions 7–17 of Q4 – Questionnaire to meat processors – UK and Questions 5–15 of Q4 – Questionnaire to retailers – UK.

[23]  See replies to Question 18 of Q4 – Questionnaire to meat processors – UK and Question 16 of Q4 – Questionnaire to retailers – UK.

[24]  See replies to Question 9 of Q4 – Questionnaire to meat processors – UK, for instance, ‘Bacon is such a significant UK market  compared  to
any other raw cured products, that it should be considered  separately’  (Farmers  Boy);  ‘It  is  absolutely  important  that  bacon  should  be
identified as a distinct market in the UK’; (Becketts). See also replies to Question 7 of Q6 – Questionnaire to retailers – UK, e.g. ‘We  believe
that in the UK bacon is seen as a traditional individual food item’ (Marks & Spencer)

[25]  See replies to Question 10 of Q4 – Questionnaire to meat processors – UK, e.g.’[T]here should  be  no  premium  segment  for  bacon’  (Pork
Traders Oakwell). See also replies to Question 8 of Q6 – Questionnaire to retailers – UK.

[26]  The replies to the market investigation also indicate that only UK bacon (meat of UK origin) and to some  extent  Dutch  and  Danish  bacon
(i.e. meat of Dutch or Danish origin) could be considered meeting the ‘premium requirements’, in particular the welfare  standards.  See  replies
to Question 10 of Q4 – Questionnaire to meat processors – UK and Question 8 of Q4 – Questionnaire to retailers –  UK.  It  is  also  noted  that,
according to the Parties (observations submitted on 29 June 2015 on the request for partial referral),  Danish  Crown  and  and  Tican  sometimes
promoted in the past their products under the label ‘100% Dansk’. However, this brand is only  rarely  used  today  and  no  longer  promoted  in
retail.

[27]  See replies to Questions 11 and 19 of Q4 – Questionnaire to meat processors – UK, for instance: ‘Retail and  Foodservice  are  clearly  two
distinct markets’ (Becketts), ‘The base product is often very similar but the commercial approach is not always the same and the product  ranging
(weight, packaging format, etc.) is often different’ (Karro).

[28]  See, for instance M.1313 – Danish Crown/Vestjyske Slagterier, paragraph 95; M.2662 – Danish Crown/Steff-Houlber,g paragraph  21;  M.3401  –
Danish Crown/Flagship Food,s paragraph 10; M.3522 – Danish Crown/HK/Sokolow, paragraph 13; and M.3605 – Sovion/HMG, paragraph 74.

[29]  See for instance replies to Questions 20–21 of Q4 – Questionnaire to meat processors – UK.

[30]  See for instance replies to Question 27 of Q4 – Questionnaire to meat processors  –  UK;  Question  4.1  of  Q4  –  Questionnaire  to  meat
processors – Poland.

[31]  See, for instance M.1313 – Danish Crown/Vestjyske Slagterier, paragraph 96; M.2662 – Danish Crown/Steff-Houlberg  paragraph  37;  M.3401  –
Danish Crown/Flagship Foods paragraph 20; M.3522 – Danish Crown/HK/Sokolow, paragraph 20; and M.3605 – Sovion/HcMG, paragraph 90.

[32]  See for instance replies to Questions 20–21 of Q4 – Questionnaire to meat processors – UK.

[33]  See for instance replies to Question 4.1 of Q4 – Questionnaire to meat processors – Poland.

[34]  See replies to Questions 23 of Q4 – Questionnaire to meat processors – UK and to Question 18 of Q6 – Questionnaire to retailers – UK.

[35]  See replies to Questions 24 and 26 of Q4 – Questionnaire to meat processors – UK.

[36]  See replies to Question 36 of Q4 – Questionnaire to meat processors – UK.

[37]  See, for instance replies to Question 36 of Q4 – Questionnaire to meat processors  –  UK.  Tönnies,  Vion,  Cooperl,  Smithfield,  Persoon,
Lunenburg, Eurofoods were named as alternative suppliers of fresh pig meat for further processing.

[38]  See replies to Question 33 of Q4 – Questionnaire to meat processors – UK.

[39]  See replies to Question 61 of Q4 – Questionnaire to meat processors – UK.

[40]  Forza: [5-10]% overall, [10-20]% in retail; Karro: [5-10]% overall, [5-10]% in retail; Farmers Boy:  [0-5]%  overall,  [5-10]%  in  retail;
Becketts: [5-10]% overall, not present in retail and Cranswick: [0-5]% overall, [0-5]% in retail.

[41]  Concerns were voiced by one competitor in pork bacon with regard to the Parties' strong market position in premium pork bacon  in  the  UK.
In particular, according to the competitor, the Parties'  combined  market  share  with  three  major  retailers  in  the  UK  (Tesco,  ASDA  and
Sainsbury's) would be very high. The Commission notes that those mentioned retailers did not  raise  articulated  concerns  with  regard  to  the
Transaction. For instance: ‘There will be sufficient competition to prevent the merged entity from  raising  prices  in  the  UK  in  the  retail
segment of pork bacon should this merger go through.’ See email from Sainsbury dated 15 June 2015.

[42]  See replies to Question 24 of Q6 – Questionnaire to retailers – UK.

[43]  See replies to Question 23 of Q6 – Questionnaire to retailers – UK. See also email from Sainsbury dated 15 June 2015.

[44]  See replies to Question 26 of Q6 – Questionnaire to retailers – UK.

[45]  See replies to Question 31 of Q6 – Questionnaire to retailers – UK, e.g.: ‘There are enough suppliers in the market to provide  competition
and keep prices competitive’ (Co-operative Group); ‘[T]here will still be other large UK processors and independents as well as other EU  sources
to provide sufficient competition’ (Marks & Spencer)..

[46]  With the exception of the sale of processed pork for cold consumption, where the  Parties'  combined  market  share  is  [20-30]%,  with  a
minimal increment of [0-5]% from Tican.

[47]  One pork bacon competitor (Becketts) raised the issue of a potential input foreclosure. However, this competitor is currently not  sourcing
fresh pig meat for further processing from any of the Parties. Another meat processor (Oakwell) also voiced concerns with regard to the  sale  of
fresh pig meat. This meat processor, however, does not compete in the downstream market of bacon with the Parties.

[48]  See replies to Questions 56 and 57 of Q4 – Questionnaire to meat processors – UK.

[49]  See replies to Question 58 of Q4 – Questionnaire to meat processors – UK.

[50]  See replies to Question 7 of Q10 – Questionnaire to meat processors – Poland.

[51]  See replies to Question 15 of Q10 – Questionnaire to meat processors – Poland.

[52]  See replies to Question 18 of Q10 – Questionnaire to meat processors – Poland.

[53]  [30-40]% combined market share, with a minimal addition from Tican of [0-5]%. Due to this very limited increment brought  about  by  Tican,
the Transaction does not raise serious doubts as to its compatibility with the internal market  with  respect  to  fresh  pig  meat  for  further
processing in Sweden.

[54]  Cooked pork sausages: combined [0-5]% (Danish Crown [0-5]%, Tican [0-5]%); processed pork for cold consumption:  combined  [5-10]%  (Danish
Crown [5-10]%, Tican [0-5]%).

[55]  See replies to Question 6 of Q9 – Questionnaire to meat processors – Sweden.

[56]  See replies to Question 7 of Q9 – Questionnaire to meat processors – Sweden.

[57]  See replies to Questions 13 and 14 of Q9 – Questionnaire to meat processors – Sweden.

[58]  See replies to Question 12 of Q9 – Questionnaire to meat processors – Sweden.

[59]  See replies to Question 15 of Q9 – Questionnaire to meat processors – Sweden.

-----------------------
 In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC)  No  139/2004
 concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown  thus  […].  Where  possible  the
 information omitted has been replaced by ranges of figures or a general description.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE