CELEX: 32021M10350
Language: en
Date: 2021-11-24 00:00:00
Title: Commission Decision of 24/11/2021 declaring a concentration to be compatible with the common market (Case No COMP/M.10350 - MONDELEZ / CHIPITA INDUSTRIAL AND COMMERCIAL COMPANY) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                 Brussels, 24.11.2021
                                                                 C(2021) 8660 final
                                                                                  PUBLIC VERSION
                                                                  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                                                                  information omitted has been replaced by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.
                                                                 Mondelēz International, Inc.
                                                                 Lindbergh-Allee 1
                                                                 8152 Glattpark
                                                                 Switzerland
Subject:             Case M.10350 – Mondelēz / Chipita Industrial and Commercial
                     Company
                     Commission decision pursuant to Article 6(1)(b) of Council Regulation
                     No 139/20041 and Article 57 of the Agreement on the European Economic
                     Area2
Dear Sir or Madam,
(1)       On 18 October 2021, the Commission received notification of a concentration,
          pursuant to Article 4 of the Merger Regulation, which would result from a proposed
          transaction by which Mondelēz International, Inc. (‘Mondelēz’, the United States)
          intends to acquire sole control over Chipita Industrial and Commercial Company
          S.A. and its direct or indirect subsidiaries and affiliates 3 (‘Chipita’, Greece) by way
          of a purchase of sales within the meaning of Article 3(1)(b) of the Merger
          Regulation (the ‘Transaction’)4 . In this Decision, Mondelēz is referred to as the
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     […].
4     Publication in the Official Journal of the European Union No C 467, 19.11.2021, p. 12.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak---          ‘Notifying Party’ and, together with Chipita, as the ‘Parties’. The entity that would
         result from the Transaction is referred to as the ‘Merged Entity’.
1.       THE PARTIES
(2)      Mondelēz is a global snack company offering a wide range of products, including
         biscuits, chocolate, chewing gum and candy, cheese and powdered beverages.
         Mondelēz manufactures and markets its products internationally. Mondelēz's
         portfolio of biscuits and chocolate products includes, amongst others, household
         brands such as Barni, belVita, Cadbury, Chips Ahoy!, Club Social, Lacta, Milka,
         Oreo, Ritz, Toblerone, and TUC.
(3)      Chipita is a multinational manufacturer of branded packaged croissants and other
         snack products, mostly baked bread based. Chipita is headquartered in Greece with
         production facilities in multiple countries, including across Europe. Chipita's main
         brands include 7DAYS, Chipicao and Finetti.
2.       THE OPERATION
(4)      Pursuant to the Sale and Purchase Agreement signed on 26 May 2021, Mondelēz
         will acquire, through the Transaction, 100% of the shares of and thereby sole control
         over Chipita.
(5)      In light of the above, the Transaction would thus result in a concentration within the
         meaning of Article 3(1)(b) of the Merger Regulation.
3.       UNION DIMENSION
(6)      The Parties have a combined aggregate worldwide turnover of more than EUR 5 000
         million5 (Mondelēz: EUR 23.2 billion and Chipita: EUR […]). Each of them has a
         Union-wide turnover in excess of EUR 250 million (Mondelēz EUR […] and
         Chipita EUR […]), but neither of the Parties achieves more than two-thirds of their
         aggregate Union-wide turnover within one and the same Member State.
(7)      The concentration therefore has a Union dimension within the meaning of Article
         1(2) of the Merger Regulation.
4.       M ARKET DEFINITION
4.1.     Product market definition
(8)      The Parties’ activities overlap with respect to the wholesale of the following
         snacking products: (i) cakes and morning goods; (ii) sweet biscuits; (iii) sweet
         spreadable products; and (iv) savoury snacks. The Transaction does not give rise to
         vertical relationships between the Parties’ activities.
5    Turnover calculated in accordance with Article 5 of the Merger Regulation .
                                                           2
 ---pagebreak--- (9)     This Section examines the product and geographic market definitions for all
        products in relation to which the Parties’ activities overlap horizontally.
4.1.1. The Commission’s precedents
4.1.1.1. Distinction by product types
(10)    The Commission previously considered the market for cake products separately from
        those of other snacking products.6 In past decisions, the Commission also considered
        the possibility of sub-segmenting the market for cake products into the markets for
        (i) cakes, mini cakes and other pastries produced by craft pastries and industrial
        producers, and (ii) morning goods, which include bagels, croissants, scones and
        similar products that are normally eaten for breakfast, but it ultimately left open
        whether those sub-segments belong to separate product markets.
(11)    With respect to sweet biscuits, in a previous decision the Commission considered
        that biscuits constitute a separate product market from other snacks, and also
        considered a number of sub-segments thereof, including sweet biscuits. However,
        the Commission left open if these sub-segments constitute separate product
        markets.7 In another decision, the Commission considered sweet biscuits to belong
        to a product market that is separate from other types of biscuits such as savoury
        biscuits.8
(12)    Also, the Commission previously considered a market for sweet spreadable products
        and has left open whether a narrower sub-segment for chocolate spreadable products
        should be considered as separate product market.9
(13)    Regarding savoury snacks, in a previous decision, the Commission considered the
        market for savoury biscuits to be separate from that of sweet biscuits. 10 In other
        decisions, the Commission considered that savoury snack products are likely to
        constitute a product market that is separate from those of other snack foods.11
4.1.1.2. Distinction between branded and private label products
(14)    In various previous decisions regarding different snacking products,12 the
        Commission considered a distinction between products with brands owned by the
        manufacturers (‘branded’ products) and those with private labels marketed by the
        retailers (‘white label’ products), but finally left the market definition open.
4.1.1.3. Distinction by sale channels
(15)    The Commission previously found a distinction by sale channels to be warranted, in
        particular since conditions of competition differ when snacking products are sold to
6   M.2817 Barilla / BPL / Kamps; M.5286 Lion Capital / Foodvest; M.6430 Oaktree/ Panrico.
7   M.1920 – Nabisco / United Biscuits.
8   M.4824 – Kraft / Danone Biscuits.
9   M.2302 – Heinz/CSM; M.7340 – Ferrero International/Oltan.
10 M.4824 – Kraft/ Danone Biscuits.
11 M.232 – PepsiCo/General Mills; M.2275 – PepsiCo/Quaker; M.5632 – PepsiCo, Inc / PepsiAmericas, Inc.
12 M.1920 – Nabisco / United Biscuits; M.6891 Agrofert/ Lieken.
                                                      3
 ---pagebreak---        retailers or to the food service sector (for example hotels, restaurants, canteens,
       etc.).13
4.1.2. The Notifying Party’s view
(16)   The Notifying Party considers that the various snacking product areas in which the
       Parties are active belong to a single product market for snacking products.14
(17)   First, the Notifying Party considers that cakes and morning goods do not belong to
       the same product market because, from a demand-side prospective, the two product
       groups are consumed during different times of the day and are typically placed in
       different parts of retailer shops.15 Furthermore, the Notifying Party considers that
       supply-side substitutability is limited and suppliers tend to concentrate more heavily
       on one of the two product groups.16
(18)   Second, the Notifying Party argues that sweet biscuits belong to a product market
       that is separate from those of other biscuits and of other snacking products. 17
(19)   Third, the Notifying Party considers that sweet spreadable products belong to a
       product market that is separate from those of other snacking products, including
       other spreadable products such as savoury ones. According to the Notifying Party,
       no further differentiation of the market for sweet spreadable products is necessary. 18
(20)   Finally, the Notifying Party argues that savoury snacks belong to a product market
       that is separate from those of other snacking products. The Notifying Party also
       considers that the market for savoury snacks is differentiated across the various types
       of products such as for example backed bread products, potato chips, extruded
       snacks, and savoury biscuits.19
(21)   With respect to the differentiation between branded and private label products, the
       Notifying Party considers that private label products should be included within each
       of the respective relevant markets because branded snacking products face intense
       competition from private label products in all snacking segments and because private
       label products provide consumers with an alternative to branded products. 20
(22)   With respect to the distinction between sales made to retailers and those made to the
       food service sector, while the Notifying Party agrees with the Commission’s past
       practice that the foodservices segment has its own distinguishing features and that
       conditions of competition may differ between these two sale channels, it also
       considers that the extent of such a distinction might be less marked for snacking
13  M.5286 – Lion Capital / Foodvest; M.1990 – Unilever/Bestfoods; M.6430 – Oaktree/ Panrico; M.6891 –
    Agrofert/ Lieken.
14  Form CO, paragraph 152.
15  Form CO, paragraphs 162-163.
16  Form CO, paragraph 164.
17  Form CO, paragraphs 191-195.
18  Form CO, paragraphs 182-186.
19  Form CO, paragraphs 174-178.
20  Form CO, paragraphs 203-205.
                                                     4
 ---pagebreak---         products compared to the products considered by the Commission in Unilever/
        Bestfoods.21
4.1.3. The Commission’s assessment
4.1.3.1. Cakes and morning goods
(23)    For the following reasons, the Commission considers that the results of the market
        investigation generally support the Notifying Party’s view that certain distinctions
        between morning goods and cakes exist and that therefore they could be considered
        to belong to two separate product markets.
(24)    First, cakes and morning goods appear to have key differences in terms of moments
        and places of consumption, texture and freshness / naturalness perception. An
        internal document produced by Mondelēz in the ordinary course of business, for
        example, shows that (i) soft cakes and certain morning goods22 are consumed
        [consumer behaviour]; (ii) soft cakes and certain morning goods are consumed in
        different places as soft cakes are typically consumed [consumer behaviour] (iii)
        morning goods are considered by consumers [consumer behaviour], compared to
        cakes.23
(25)    Second, internal documents of the Parties produced in the ordinary course of
        business indicate that conditions of competition for cakes are typically assessed by
        the Parties separately from those of other morning goods. 24
(26)    Third, the market investigation suggests that the various sub-segments within each of
        cakes and morning goods are likely part of the same product markets. A majority of
        market participants that expressed a view consider that morning goods (e.g.
        crumpets, bagels, pancakes, croissants, brioches and other products generally eaten
        for breakfast) are substitutable with each other in terms of price, product
        characteristics and consumer preferences.25 Similarly to morning goods, a majority
        of the market participants that expressed a view consider that cakes are substitutable
        with each other in terms of price, product characteristics and consumer preferences. 26
(27)    Against this background, the Commission considers that within the broader market
        for cake products, morning goods and cakes may belong to separate product markets,
        without a need for further sub-segmentation. However, the exact market delineation
        of the relevant product market(s) can be left open, as the Transaction does not raise
        doubts as to its compatibility with the internal market with respect to cake products
        under any plausible market definition. In any event, for the purposes of this
        Decision, the Commission will conduct its assessment of the potential effects of the
        Transaction separately for the cake and morning goods segments.
21  Form CO, paragraph 207.
22  The document considers baked goods and pastries.
23  Reply to RFI 2, Annex 5.2.1 [internal document].
24  See for example: [internal document].
25  Questionnaire to customers, questions 3 and 3.1; questionnaire to competitors, questions 3 and 3.1.
26  Questionnaire to customers, question 3; questionnaire to competitors, question 3.
                                                         5
 ---pagebreak--- 4.1.3.2. Sweet biscuits
(28)    In line with the Commission’s past practice, the results of the market investigation
        suggest that sweet biscuits belong to a product market that is separate from other
        snacking products and from other types of biscuits. 27
(29)    A majority of market participants that expressed a view in the market investigation
        indicated that the various products included in the sweet biscuits category are
        substitutable with one another in terms of price, characteristics and consumer
        preferences.28 As one competitor stated: “Biscuits (sweet biscuits) are very
        specialized products (not very substitutable) to which people are attached locally,
        with specific recipes”.29
(30)    However, the exact market delineation of the relevant product market for sweet
        biscuits, and more specifically the question whether sweet biscuits are a market
        separate from other snacking products and from other types of biscuits, can be left
        open, as the Transaction does not raise doubts as to its compatibility with the internal
        market under any plausible market definition.
(31)    In any event, under a conservative approach and for the purposes of this Decision,
        the Commission will conduct its assessment of the likely effects of the Transaction
        separately for the sweet biscuits segment.
4.1.3.3. Sweet spreadable products
(32)    In line with its previous decisions, the Commission is of the view that sweet
        spreadable products and savoury spreadable products are part of two separate
        product markets.
(33)    From a demand-side prospective, consumption often differs in terms of time of
        consumption and consumption habits: savoury spreadable products are often spread
        on savoury biscuits, are used as a side or 'dip' to vegetables, or are otherwise spread
        on bread at lunch or dinner, whereas sweet spreadable products are more often
        spread on bread or sweet biscuits away from lunch or dinner.
(34)    More specifically, with respect to chocolate spreadable products, the market
        investigation was inconclusive as to whether these constitute a product market
        separate from other sweet spreadable products. While a majority of the market
        participants that expressed a view in the market investigation considers that all sweet
        spreadable products such as spreadable chocolate, jam, honey, and peanut butter are
        substitutable with one another in terms of price, characteristics and consumer
        preferences,30 some customers and competitors of the Parties consider chocolate
        spreadable products as a separate market. 31
(35)    However, the exact market delineation of the relevant product market for spreadable
        sweet products, and more specifically the question whether chocolate spreadable
27  Questionnaire to customers, question 3.1; questionnaire to competitors, question 3.
28  Questionnaire to customers, question 3; questionnaire to competitors , question 3.
29 Questionnaire to competitors, questions 3.1.
30 Questionnaire to customers – question 3; questionnaire to competitors, question 3.
31 Questionnaire to customers – question 3.1; questionnaire to competitors, question 3.1.
                                                         6
 ---pagebreak---         products are a market separate from other sweet spreadable products, such as jam,
        honey and peanut butter, can be left open, as the Transaction does not raise doubts as
        to its compatibility with the internal market under any plausible market definition.
(36)    Under a conservative approach and for the purposes of this Decision, the
        Commission will conduct its assessment of the likely effects of the Transaction
        separately for the chocolate spreadable products segment.
4.1.3.4. Savoury snacks
(37)    For the following reasons, the Commission considers that he results of the market
        investigation supports the Commission’s previous practice and the Notifying Party’s
        view that savoury snacks are part of a product market that is separate from those of
        other snacks.
(38)    First, a majority of market participants that replied to the market investigation
        indicated that savoury snacks are not substitutable with other snacks such as sweet
        biscuits.32
(39)    Second, a majority of market participants that expressed a view in the market
        investigation indicated that the various products included in the savoury snacks
        category such as chips and crisps, extruded and corn-based products, nuts, salty
        biscuits, and other salty snacks are substitutable with one another in terms of price,
        characteristics and consumer preferences.33
(40)    Against this background, the Commission considers that savoury snacks may belong
        to a product market that is separate from those of other snacks. However, the
        question whether savoury snacks are a separate market from other types of snacks
        can be left open, as the Transaction does not raise doubts as to its compatibility with
        the internal market in either case.
(41)    In any event, for the purposes of this Decision, the Commission will conduct its
        assessment of the potential effects of the Transaction for the savoury snacks
        segment.
4.1.3.5. Branded and private label products
(42)    While a majority of respondents to the market investigation that expressed a view
        consider that branded and private label products are not substitutable or only
        somewhat substitutable from a consumer perspective, there is also a significant
        minority of respondents that consider them to be substitutable with one another.34 ,35
32  Questionnaire to customers – question 3.1; questionnaire to competitors, question 3..
33  Questionnaire to customers, question 3; questionnaire to competitors, question 3.
34 Questionnaire to customers, question 5; questionnaire to competitors, question 5.
35 While results in this Section and in Section 4.1.3.5 are reported in an aggregated fashion, questions have
    been asked separately for the following products: morning goods (e.g. crumpets, bagels, pancakes, tea
    cakes, croissants, brioches and other products generally eaten for breakfast), Savoury snacks (e.g. chips
    and crisps, extruded and corn-based products, nuts, salty biscuits, and other salty snacks), cakes, Sweet
    spreadable products (e.g. spreadable chocolate, jam, honey, and peanut butter), Sweet biscuits, and Biscuit
    wafers.
                                                          7
 ---pagebreak--- (43)    Moreover, a relative majority of market participants that expressed a view in the
        market investigation consider that in case of a price increase (of 5-10%) of a given
        branded product only a small percentage of the Parties’ customers would switch to a
        private label alternative.36
(44)    However, the question whether a distinction should be made between branded and
        private label products can be left open as the Transaction does not raise doubts as to
        its compatibility with the internal market in either case.
4.1.3.6. Sale channels
(45)    A majority of respondents to the market investigation that expressed a view
        indicated that conditions of competition (for example, delivery time, prices, number
        and quality of suppliers, etc.) differ if a manufacturer sells the same goods directly to
        retailers or through distributors (or other intermediaries).37 This suggests that a
        distinction by sales channels may be appropriate.
(46)    However, whether such a distinction is warranted for the purposes of this Decision
        can be left open, as the Transaction does not raise doubts as to its compatibility with
        the internal market in either case.
4.2.    Geographic market definition
4.2.1. The Commission’s precedents
(47)    In previous cases, the Commission considered that the relevant geographic market
        for bakery products, including its possible sub-segments, is national in scope on the
        basis of different preferences and purchasing habits between Member States.38
(48)    Likewise, the Commission previously considered the relevant geographic market of
        sweet spreadable products as national in scope because negotiations with customers
        of sweet spreadable products are predominantly national in scope and the prices of
        sweet spreadable products are generally determined on a national basis.39
4.2.2. The Notifying Party’s view
(49)    The Notifying Party submits that, in line with the Commission’s precedents, the
        relevant geographic market for snacking products is at least national in scope. In this
        regard, the Notifying Party notes that the pricing and marketing are generally
        national and that, on the customer side, there are national preferences in the
        consumption of snacking products, reflected in different brands and different types
        of tastes. However, the Notifying Party submits that the Baltics should be treated as
        a single geographic market due to similar competitive conditions. 40
36   Questionnaire to customers, question 6; questionnaire to competitors, question 6.
37   Questionnaire to customers, question 8; questionnaire to competitors, questions 8.
38 M.6430 – Oaktree / Panrico, par. 22; M.6891 – Agrofert/ Lieken, par. 14 ; M.5644 – Kraft Foods/
     Cadbury, par. 43; M.1920 – Nabisco/ United Biscuits, par. 12; M.4824 – Kraft/ Danone Biscuits, par. 15.
39 M.7340 – Ferrero International/Oltan, par. 26; M.1990 – Unilever/Bestfoods, par.57.
40 Form CO, paragraphs 208-209.
                                                          8
 ---pagebreak--- 4.2.3. The Commission’s assessment
(50)     In line with the Commission’s past practice, the results of the market investigation
         indicate that the markets for cakes, sweet biscuits, chocolate spreadable products and
         savoury snacks, are national in scope.
(51)     A majority of respondents to the market investigation that expressed a view indicate
         that preferences, purchasing habits, brands and pricing differ between different
         countries of the EEA.41 Moreover, a majority of customers that expressed a view in
         the market investigation indicated that they procure bakery and/or confectionery
         products on a national basis.42
(52)     Therefore, the Commission will assess the potential effects of the Transaction on a
         national basis.
4.3.     Conclusions on market definition
(53)     The Parties’ activities overlap in the following plausible product markets: cake
         products, morning goods, cakes, biscuits, sweet biscuits, sweet spreadable products,
         chocolate spreadable products, snacking products, and savoury snacks.
(54)     The Commission will assess the potential effects of the Transaction on the plausible
         markets listed above at the national level.
5.       COMPETITIVE ASSESSMENT
5.1.     Legal framework
(55)     Under Article 2(2) and (3) of the Merger Regulation, the Commission must assess
         whether a proposed concentration would significantly impede effective competition
         in the internal market or in a substantial part of it, in particular through the creation
         or strengthening of a dominant position. In this respect, a merger can entail
         horizontal and/or non-horizontal effects.
(56)     Horizontal effects are those potentially deriving from a concentration where the
         undertakings concerned are actual or potential competitors of each other in one or
         more of the relevant markets concerned. The Commission appraises horizontal
         effects in accordance with the Horizontal Merger Guidelines43 .
(57)     According to paragraph 26 of the Horizontal Merger Guidelines, a number of factors
         need to be assessed to determine whether significant non-coordinated effects are
         likely to result from a merger. A non-exhaustive list of relevant factors is provided in
         paragraphs 27-38.
(58)     Accordingly, Sections 5.3.1-5.3.5 of the present decision assess, respectively, market
         shares and the increments brought about by the Transaction, closeness of
         competition between the Parties, the alternatives to the Parties and barriers to entry,
41   Questionnaire to customers, question 10; questionnaire to competitors, question 10.
42   Questionnaire to customers, question 9.
43   Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of
     concentrations between undertakings (‘Horizontal Merger Guidelines’), OJ C 31, 05.02.2014.
                                                          9
 ---pagebreak---         and the impact that the main market participants expect from the Transaction. Based
        on all these factors considered together, conclusions on horizontal non-coordinated
        effects are drawn in Section 5.3.6.
(59)    Non-horizontal effects may arise when the parties to a concentration either operate at
        different levels of the supply chain (vertical effects) or are active in closely related
        markets (conglomerate effects). As explained in Section 4.1, as the Parties operate at
        the same level of the supply chain the Transaction does not lead to non-horizontal
        effects.
5.2.    Market structure
(60)    The Transaction gives rise to the following horizontally affected markets (that is to
        say, markets in which the Parties’ combined shares exceed 20%): (i) cakes in
        Czechia, France, Greece, Hungary, Latvia, Lithuania, the Netherlands, Poland,
        Romania and Slovakia; (ii) sweet biscuits in Czechia, Hungary, Lithuania, Poland,
        Romania and Slovakia; (iii) chocolate spreadable products in Bulgaria and Greece
        and (iv) savoury snacks in France.
(61)    The Parties’ market shares in value and in volume in the horizontally affected
        markets are reported in Table 1 (excluding private label sales) and in Table 2
        (including private label sales).
(62)    The market for savoury snacks in France has a HHI delta below 150 and the Parties
        have a combined market share below 50% ([20-30]%, private label excluded).
        Therefore, the savoury snacks market in France satisfies the conditions set out in
        point 6 of the Commission Notice on a simplified procedure for treatment of certain
        concentrations under Council Regulation (EC) No 139/2004 (the ‘Simplified
        Notice’). For the reasons set out in the Simplified Notice, the Transaction is unlikely
        to raise competition concerns in relation to this market, which will therefore not be
        assessed further.
(63)    In light of the above considerations and of the market shares in Tables 1 and 2, the
        assessment will focus on horizontal non-coordinated effects in the markets for (i)
        cakes in Czechia, France (including private label), Greece, Hungary, Latvia,
        Lithuania, the Netherlands (excluding private label), Poland, Romania and Slovakia;
        (ii) sweet biscuits in Czechia, Hungary, Lithuania, Poland, Romania and Slovakia;
        and (iii) chocolate spreadable products in Bulgaria and Greece.
(64)    With respect to a possible segmentation of the relevant product markets by sale
        channels, the Parties were not able to provide market share estimates but they
        consider that they would not significantly differ from those presented in Tables 1
        and 2 if a segmentation by sale channel were to be made.44
44   Form CO, paragraph 301.
                                                  10
 ---pagebreak---  ---pagebreak--- 5.3.    Horizontal non-coordinated effects
5.3.1. Cakes
(65)    The Commission considers that the Transaction does not raise serious doubts with
        respect to the affected markets for the sale of cakes. This is for the following
        reasons.
(66)    First, while the Parties’ combined shares exceed 20% in the cake markets in Czechia
        (including and excluding private label), France (including private label), Greece,
        Hungary, Latvia, Lithuania, the Netherlands (excluding private label), Poland,
        Romania and Slovakia (including and excluding private label), the Transaction, as
        shown in Tables 1 and 2, would lead to either low-to-moderate combined market
        shares which remain below [30-40]%, or, when combined market shares exceed [30-
        40]%, to increments that would be limited and at most [0-5]%. The two exceptions
        to this are the cake markets in (i) Latvia (where the combined market shares in value
        would be [70-80]% with an increment of [5-10]% and those in volume would be [70-
        80]% with an increment of [5-10]%, excluding private label; and [70-80]% in value
        with an increment of [5-10]% and [70-80]% in volume with an increment of [5-
        10]%, including private label) and Slovakia (where the combined market shares in
        value would be [80-90]% with an increment of [5-10]% and those in volume would
        be [70-80]% with an increment of [5-10]%, excluding private label; and [80-90]% in
        value with an increment of [0-5]% and [70-80]% in volume with an increment of [5-
        10]%, including private label). However, in both Latvia and Slovakia (as in the other
        affected markets), the Merged Entity would continue to face several competitors, as
        explained in more detail below.
(67)    Second, the Parties’ activities in cakes are largely complementary, as Chipita is
        mainly active in the production and supply of packaged croissants and other baked
        bread based products where Mondelēz is not active. As internal documents of
        Mondelēz explain, [market strategy].45 As one customer of both Parties states:
        “Chipita’s products don’t compete closely with Mondelēz’s products and their
        products mostly differ and are not substitutable with one another”.46
(68)    Chipita's main activities consist in the production and supply of packaged croissants
        and other baked bread based products. Mondelēz does not manufacture or supply
        croissants or any other form of pastry product, and only has negligible activities in
        baked bread based products, as can be seen from Figure 1 below. Moreover,
        Chipita's packaged croissants are typically viewed as morning goods, where
        Mondelēz has a limited presence. Mondelēz itself considers croissants as a
        “neighbouring” market to its cake business and is a market in which it is not active.47
        Figure 1
        [Slide from internal document]
        Source: Form CO, Annex 5.4.A.10 – page 18
45   Form CO, paragraphs 86 and 87; Form CO, Mondelēz’ internal document titled […].
46   Minutes of 05.10.2021 from a call with a customer.
47 Form CO, paragraphs 86 and 87.
                                                        12
 ---pagebreak--- (69)   Moreover, the Parties are not close competitors in any of the affected cake markets.
       A majority of customers that expressed a view in the market investigation indicated
       that they do not view Mondelēz and Chipita as close competitors.48 Indeed, as
       illustrated by Figures 2 and 3 below, Mondelēz’s internal documents suggest that the
       Parties are not active in the same segments and each of them have other competitors
       (rather than the other Party) with whom they compete more closely that the other
       Party.
       Figure 2
       [Slide from internal document]
       Source: Form CO, Annex 5.4.A.1 – page 8
       Figure 3
       [Slide from internal document]
       Source: Annex 5.4.A.1 – page 29
(70)   The Parties’ internal documents also indicate that they are not close competitors in
       the markets where their combined shares are above [30-40]% and the increment
       brought about by the Transaction is above [0-5]%. Indeed, Mondelēz internal
       documents show that the company has lost sales in […], in favour of competitors
       others than Chipita (see Figures 4-5 below):
       Figure 4
       [Slide from internal document]
       Annex 6.18.A.9 – page 9
       Figure 5
       [Slide from internal document]
       Annex 6.18.A.9 – page 14
(71)   As regards Latvia, Chipita’s internal report of market intelligence 49 shows brands
       other than Mondelēz’ that compete with its own cakes products (as can be seen from
       Figure 6 below).
       Figure 6
       [Slide from internal document]
       Annex 6.18.B.2
(72)   Moreover, the Parties indicate that Mondelēz’s presence in the cake markets mainly
       consists of sales of its Barni brand, which is addressed to children aged between
48  Questionnaire to customers, Question 13.
49  Annex 6.18.B.2
                                                13
 ---pagebreak---         […]. In contrast, Chipita's main cake product, sold under the 7DAYS' brand, is
        addressed to customers of all ages. Only [0-10]% of Chipita's cake sales are made
        with its Chipicao brand, which is Chipita’s brand addressed to children. In addition,
        although Chipita's Chipicao cakes are also addressed to children, they are addressed
        to children of a different age range […] than those targeted by the Barni brand.
        Moreover, the Parties submit that their products have different portion sizes and
        marketing methods.
(73)    Third, in each of the affected markets a number of competitors would remain
        including both local players and large international competitors, such as Lotus
        Bakeries, Ferrero, Barilla, Valeo Foods, Dr Oetker, Bonne Maman. 5051
(74)    In Czechia, the Merged Entity would continue to compete with large international
        competitors such as Valeo Foods ([0-5]% in value and [5-10]% in volume, excluding
        private labels). Moreover, the Merged Entity would face some constraints by private
        label suppliers that together hold a market share of almost [10-20]% in value and
        over [20-30]% in volume.52
(75)    In France, the Merged Entity would compete with a number of suppliers such as
        Jacquet Brossard ([10-20]% in value and [10-20]% in volume, including private
        labels), Ferrero ([5-10]% in value and [5-10]% in volume, including private labels),
        Andros ([0-5]% in value, including private labels) and Valeo Foods ([0-5]% in
        value, including private labels).53
(76)    In Greece, the Merged Entity would continue to compete with large international
        competitors and local producers such as Ferrero ([20-30]% in value and [10-20]% in
        volume, excluding private labels), Stergiou ([10-20]% in value and [10-20]% in
        volume, excluding private labels), Il Vecchio Forno ([5-10]% in value, excluding
        private labels). Moreover, the Merged Entity would face some constraints by private
        label suppliers that together hold a market share of about [0-5]% in value and in
        volume.54
(77)    In Hungary, the Merged Entity would continue to compete with large international
        competitors and local producers such as Ferrero ([0-5]% in value, private label
        included), Do-Ra Snacks ([0-5]% in value and [0-5]% in volume, private label
        excluded), Bahlsen ([0-5]% in value, private label included). Moreover, the Merged
        Entity would face some constraint by private label suppliers that together hold a
        market share of about [40-50]% in value and over [50-60]% in volume.55
(78)    In Latvia, the Merged Entity would face competitive pressure from international and
        local producers, such as Ferrero ([5-10]% in value and [5-10]% in volume, private
50  Form CO, paragraph 328.
51  The Parties were unable to provide market shares for competitors excluding private label for all affected
    markets, so some competitors the Commission will pres ent their market shares including private label and
    specifying this for each instance.
52  Form CO, paragraphs 347 - 353.
53  Form CO, paragraphs 356 - 362.
54  Form CO, paragraphs 365 - 371.
55  Form CO, paragraphs 374 – 381.
                                                       14
 ---pagebreak---        label included) and others (that together hold a combined market share of around
       [10-20]% in value and [20-30]% in volume, private label included). 56
(79)   In Lithuania, the Merged Entity would competes with a number of international and
       local producers such as Ferrero ([5-10]% in value and [0-5]% in volume, excluding
       private label,), Casalini s.r.l. ([5-10]% in value and [5-10]% in volume, excluding
       private label). Moreover, the Merged Entity would face some constraints by private
       label suppliers that hold together a market share of almost [0-5]% of the market in
       value and over [0-5]% of the market in volume.57
(80)   In the Netherlands, the Merged Entity would compete with a number of international
       and local producers such as Valeo Foods ([10-20]% in value and [20-30]% in
       volume, excluding private label), and others like Lotus and Ferrero. Moreover, the
       Merged Entity would face some constraints by private label suppliers that together
       hold a market share of almost [70-80]% of the market in value and over [80-90]% of
       the market in volume.58
(81)   In Poland, the Merged Entity would continue to compete with large international and
       local producers such as Oskroba ([10-20]% in value and [30-40]% in volume, private
       label included), Kopenik ([5-10]% in value, private label included), Ferrero ([0-5]%
       in value, private label included). Moreover, the Merged Entity would face some
       constraint by private label suppliers that together hold a market share of almost [20-
       30]% of the market in value and over [30-40]% market in volume.59
(82)   In Romania, the Merged Entity would continue to compete with large international
       and local producers such as Julius Meinl ([10-20]% in value and [10-20]% in
       volume, private label excluded), Alka ([10-20]% in value, private label excluded),
       Primo ([5-10]% in value, private label excluded), Boromir ([20-30]% in value,
       private label included), Kex (10% in value, private label included), Ferrero (5-10%
       in value, private label included). Moreover, the Merged Entity would face some
       constraint by private label suppliers that together hold a market share of almost [10-
       20]% of the market in value and over [10-20]% market in volume.60
(83)   In Slovakia, the Merged Entity would continue to compete with local producers and
       large international producers, such as Valeo Foods ([0-5]% in value, private label
       excluded) and others (with a combined market share of [10-20]% in value and [20-
       30]% in volume, private label excluded). Moreover, the Merged Entity would face
       some constraints by private label suppliers that together hold a market share of
       almost [5-10]% in value and over [5-10]% in volume.61
(84)   Fourth, even though the majority of the market participants that expressed a view in
       the market investigation consider that, in general, barriers to entry in the cake market
       are medium62 for a new manufacturer, they also noted that established manufacturers
56  Form CO, paragraphs 383 – 389.
57  Form CO, paragraphs 390 – 397.
58  Form CO, paragraphs 400 – 405.
59  Form CO, paragraphs 408-410.
60  Form CO, paragraphs 419-422.
61  Form CO, paragraphs 429-430.
62  Questionnaire to customers, question 16; Questionnaire to competitors, question 15.
                                                        15
 ---pagebreak---         can expand in adjacent markets.63 The view that established manufacturers already
        present in the market with strong brands can enter into adjacent markets is also
        supported by internal documents of Mondelēz that show [Mondelēz market
        strategy].64
(85)    Fifth, no substantiated concerns have been raised in the market investigation as to
        any potential effects of the Transaction on prices, innovation and choice.65
5.3.2. Sweet biscuits
(86)    The Commission considers that the Transaction does not raise serious doubts with
        respect to the affected markets for the sale of sweet biscuits. This is for the following
        reasons.
(87)    First, while the Parties’ combined shares exceed 20% in the sweet biscuits markets
        in Czechia, Hungary, Lithuania, Poland, Romania and Slovakia, the Transaction, as
        shown 1 and 2, the Transaction would lead to either low-to-moderate combined
        market shares which remain below [30-40]%, in all markets with the exception of
        Czechia (where market shares would be [50-60]% in value and [40-50]% in volume,
        private label excluded). Moreover, the increments brought about by the Transaction
        would be limited and at most [0-5]% in all affected markets, including Czechia.
(88)    Second, the HHI delta for the affected sweet biscuits markets is below 150 and the
        Parties’ combined market share is below 50%. Therefore, the sweet biscuits markets
        in Czechia, Hungary, Lithuania, Poland, Romania and Slovakia satisfy the
        conditions set out in point 6 of the Simplified Notice. It follows that, absent special
        circumstances that are not present in this case, it can be considered that the
        Transaction does not raise competition concerns with respect to those markets.
(89)    Third, the Parties are not close competitors in any of the affected sweet biscuits
        markets. A majority of customers that expressed a view in the market investigation
        indicated that they do not view Mondelēz and Chipita as close competitors.66 This
        view is also supported by the fact that Chipita's sweet biscuits’ average price per
        kilogramme is materially different from that of Mondelēz.67
(90)    Furthermore, the internal documents of the Parties do not seem to indicate that any
        of the Parties monitor the activities and market shares of the other Party but rather
        focus on other competitors (as exemplified by Figure 7 below):
        Figure 7
        [Slide from internal document]
        Source: Form CO, Annex 5.4.A.10 – page 13
63  Questionnaire to customers, question 16.1; Questionnaire to competitors, question 15.1.
64  Reply to RFI PN 1, [internal document]; Reply to RFI PN 1, [internal document].
65  Questionnaire to customers, questions 16-20; Questionnaire to competitors, questions 15-19.
66 Questionnaire to customers, Question 13.
67 Mondelēz's average price per kilogram for sweet biscuits across the affected markets is EUR […],
    whereas Chipita's average price per kilogram across the affected markets is EUR […]. – Form CO,
    paragraph 314.
                                                        16
 ---pagebreak--- (91)    Fourth, customers will retain a number of alternatives available post-Transaction as
        there are international players remaining in the affected markets like Lotus Bakeries,
        Ferrero, Barilla, Valeo Foods, Dr Oetker, Bonne Maman, which offer strong
        internationally recognised brands.68
(92)    Fifth, no substantiated concerns have been raised in the market investigation as to
        any potential effects of the Transaction on prices, innovation and choice.69
5.3.3. Chocolate spreadable products
(93)    The Commission considers that the Transaction does not raise serious doubts with
        respect to the affected markets for the sale of chocolate spreadable products. This is
        for the following reasons.
(94)    First, while the Parties’ combined shares exceed 20% in chocolate spreadable
        products markets in Bulgaria and in Greece, the Transaction, as shown in Tables 1
        and 2, on the one hand, would lead to moderate combined market shares in Bulgaria
        and, in the other hand, to increments that would be limited and at most [0-5]% in
        both markets.
(95)    Second, the HHI delta for the affected chocolate spreadable products markets is
        below 150 and the Parties’ combined market share is below 50% (if market shares in
        value are considered this does not apply to the market for spreadable chocolate
        products in Greece). Therefore, the chocolate spreadable products markets in
        Bulgaria and in Greece satisfy the conditions set out in point 6 of the Simplified
        Notice. It follows that, absent special circumstances that are not present in this case,
        it can be considered that the Transaction does not raise competition concerns with
        respect to those markets.
(96)    Third, the Parties are not close competitors in any of the affected spreadable
        chocolate products markets. A majority of customers that expressed a view in the
        market investigation indicated that they do not view Mondelēz and Chipita as close
        competitors.70 This view is also supported by the fact that Chipita's spreadable
        chocolate products’ average prices per kilogramme are materially different than
        those of Mondelēz.71
(97)    Fourth, customers will retain a number of alternatives available post-Transaction as
        there are international players remaining in the affected markets like Ferrero, Ion and
        Oskar.72
(98)    Fifth, no substantiated concerns have been raised in the market investigation as to
        any potential effects of the Transaction on prices, innovation and choice.73
68  Form CO, paragraph 328.
69  Questionnaire to customers, questions 16-20; Questionnaire to competitors, questions 15-19.
70  Questionnaire to customers, Question 13.
71  Mondelēz's average price per kilogram for sweet biscuits across the affected markets is EUR […],
    whereas Chipita's average price per kilogram across the affected markets is EUR […]. – Form CO,
    paragraph 314.
72  Form CO, paragraph 328.
73  Questionnaire to customers, questions 16-20; Questionnaire to competitors, questions 15-19.
                                                        17
 ---pagebreak--- 5.3.4. Conclusions on horizontal non-coordinated effects
(99)   Based on the considerations presented in paragraphs 65-98 and in view of the results
       of the market investigation and of all evidence available to it, the Commission
       considers that the Transaction does not give rise to serious doubts as to its
       compatibility with the internal market and the EEA Agreement with respect to
       horizontal non-coordinated effects in any plausible markets, and in particular in the
       following markets:
       (i) cakes in Czechia, France, Greece, Hungary, Latvia, Lithuania, the Netherlands,
       Poland, Romania and Slovakia;
       (ii) sweet biscuits in Czechia, Hungary, Lithuania, Poland, Romania and Slovakia;
       (iii) chocolate spreadable products in Bulgaria and Greece; and
       (iv) savoury snacks in France.
6.     CONCLUSION
(100) For the above reasons, the Commission has decided not to oppose the notified
       operation and to declare it compatible with the internal market and with the EEA
       Agreement. This Decision is adopted in application of Article 6(1)(b) of the Merger
       Regulation and Article 57 of the EEA Agreement.
                                                      For the Commission
                                                      (Signed)
                                                      Margrethe VESTAGER
                                                      Executive Vice-President
                                                 18