CELEX: 31995M0557
Language: en
Date: 1995-04-06 00:00:00
Title: COMMISSION DECISION of 06/04/1995 declaring a concentration to be compatible with the common market (Case No IV/M.557 - Alfred C. Toepfer / Champagne Céréales) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31995M0557

COMMISSION DECISION of 06/04/1995 declaring a concentration to be compatible with the common market (Case No IV/M.557 - Alfred C. Toepfer / Champagne Céréales) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 104 , 25/04/1995 P. 0007

  COMMISSION DECISION of 06/04/1995 declaring a concentration  to be compatible with the common market (Case No IV/M.557 -  Alfred C. Toepfer / Champagne Céréales) according to Council  Regulation (EEC) No 4064/89   (Only the English text is authentic).  The paper version of the decision is available through the  sales offices of the Office of Official Publications of the  European Communities  PUBLIC VERSION  MERGER PROCEDURE  ARTICLE 6(1)(b) DECISION  To the notifying parties  Dear Sirs,  Subject : <ind> Case No IV/M.557  Alfred C.  Toepfer/Champagne Céréales Notification of 07.03.1995  pursuant to Article 4 of Council Regulation No 4064/89  1. <ind> On 7th March 1995 the Commission received a  notification of an operation whereby Alfred C. Toepfer  International GmbH ("ACTI") will acquire joint control of a  malting barley company, Cerecom Cereal Commerce GmbH  ("Cerecom"), which has hitherto been solely controlled by  Champagne Céréales ("CC").    2.<ind> After examination of the notification, the  Commission has concluded that the notified operation falls  within the scope of Council Regulation No. 4064/89 and does  not raise serious doubts as to its compatibility with the  common market.    I.<ind> THE OPERATION    3.<ind> The proposed operation consists in the establishment  of a joint venture for the trading of malting barley, which  is used in the manufacture of beer. ACTI will acquire joint  control of a malting barley company, Cerecom, which has  hitherto been solely controlled by CC via a holding company  "Champagne Céréales GmbH".    II.<ind> THE PARTIES    4.<ind> ACTI is a German company active in the international  trading of agricultural commodities. CC is a French  cooperative owned by more than 11,000 farmers and acts as a  first buyer of its members' products. CC is also active in  the processing of agricultural commodities (flour mills,  maltsters, etc.) and in the international grain trade.  Cerecom is a Germany company active in the international  trading of malting barley. Hitherto Cerecom has been wholly  owned by CC; after the operation CC will continue to hold a  25% stake in Cerecom, and ACTI will hold the remaining 75%.    5.<ind> CC has a 36% stake in a French company "Malteurop",  which is the largest producer of malt in the EU; given the  wide dispersion of small shareholdings in Malteurop, other  than that held by CC, it may be assumed that CC controls  Malteurop.    III.<ind> CONCENTRATIVE JOINT VENTURE    <tab> (a)<ind> Joint control    6.<ind> Despite their disparate shareholdings, ACTI and CC  will exercise joint control of Cerecom, via a stipulation in  the latter's statute, which requires the unanimous consent  of the shareholders to Cerecom's annual budget (including  planning of turnover, investments, financing and personnel),  and to appointment of management.    <tab> (b)<ind> Concentration    7.<ind> Malting barley is produced by farmers who sell to  "first buyers", who in turn sell either to maltsters, whose  function is to convert the barley into malt for brewers, or  to international traders, which latter undergo price and  currency risks with a view to making a profit by selling on  to maltsters. First buyers are normally cooperatives, and in  the EU about 75% of malting barley is sold by first buyers  directly to maltsters, the remaining 25% being sold  initially to international traders who sell on to maltsters.  The malt produced by maltsters is used primarily for beer  production and, to a limited extent, for the production of  alcoholic spirits. The product market affected by the  proposed operation is the trading of malting barley,  particularly at the international level, which is the sector  in which the Cerecom joint venture is active.    8.<ind> ACTI will continue its operations in the trading of  malting barley. However, CC will withdraw from the business  of international trading of malting barley. Its withdrawal  from trading activities is confirmed by a noncompetition  clause in the shareholders JV agreement, whereby CC  "undertakes for the lifetime of the jointventure to refrain  from doing business in the international malting barley  trade". This noncompetition clause includes the withdrawal  by CC from any involvement in the sale of malting barley  whether at international or national level.    9.<ind> As far as malting barley is concerned, CC is a first  buyer; its international trading activities of malting  barley have been carried out by its subsidiary Cerecom, and  hence their activities will now be transferred to the new  Cerecom joint venture. The latter will operate independently  on the free market, where it will buy and sell the major  part of its malting barley throughput. CC will continue to  operate as a first buyer only, as far as malting barley is  concerned. In recent years about 75% of its boughtin malting  barley has been delivered to the maltproducing company  Malteurop (see above), and the remaining 25% has been  delivered either to independent companies or, to some  extent, to Cerecom. After the proposed operation, it is  intended that CC's boughtin malting barley will be used to  supply Malteurop, which is effectively controlled by CC.  Only in the event that CC should buy amounts surplus to  Malteurop's requirements, will CC deliver malting barley to  the new Cerecom JV.    10.<ind> Therefore, CC will effectively operate, through its  own "firstbuying" activities, and the activities of  Malteurop, as a selfsufficient verticallyintegrated producer  of malt for sale to breweries. Thus CC will not operate as  an independent trader on the "free" market for malting  barley. As far as vertical links between the Cerecom JV and  the parents are concerned, it can be excluded that the JV  will be a principal supplier or customer of its parents,  since CC will be largely selfsufficient and ACTI will  continue to be active on the same market as the JV.    11.<ind> In view of the above, the Cerecom JV is of a  concentrative nature.    IV.<ind> COMMUNITY DIMENSION    12.<ind> The combined aggregate worldwide turnover of the  undertakings concerned is more than ECU 5,000 million; the  aggregate Communitywide turnover of each of ACTI and CC is  more than ECU 250 million; and no undertaking concerned  achieves more than twothirds of its aggregate Communitywide  turnover within one and the same Member State. Therefore the  concentration has a community dimension.    V.<ind> COMPATIBILITY    13.<ind> The product market concerned by the proposed  concentration is malting barley. Malting barley is a variety  of barley which meets standard quality criteria concerning  purity, calibration, moisture and protein content and  germination energy, which makes it the key raw material for  the production of malt, which in turn is mainly used for the  production of beer. Barley production which does not meet  the standard quality criteria mentioned above is mainly used  for feed purposes (feed barley).    14.<ind> The relevant geographic market is the EU. The EU  market regulation for grain (MRG) which is part of the  Common Agricultural Policy (CAP) applies to barley. The  basic characteristic of the MRG is a system of prices,  import levies and export restitutions. Malting barley is  sold at a premium above feed barley prices. This premium  depends in particular on the quality of the crop and the  variety being used. For instance, during the past years  malting barley prices were between 18 and 45 ECU/ton higher  than feed barley prices. In past years EU malting barley  production slightly exceeded consumption and the surplus has  been exported outside the EU. Imports of malting barley in  the EU are considerably restricted by the import levy  system. Therefore only a very small percentage of EU  consumption has been imported in the past and only extremely  unfavourable growing conditions would justify significant  higher imports in the future.    15.<ind> For the last three years the average yearly  production of barley amounted in the EU 12 to 22 million  tons. Malting barleyaccounted on average for about 34% (7.5  million tons). Total average yearly consumption of malting  barley in the EU during this period amounted to about 7.3  million tons. Net exports (exports less imports) accounted  for a yearly average of 200,000 tons. For the same period  the average yearly amount of malting barley traded within  the EU amounted to 9.5 million tons. This amount is  considerably higher than production and consumption figures  and takes into account the quantities sold from first buyers  to other intermediaries, in particular international traders  which are therefore accounted for twice when these  intermediaries resell these amounts to the final consumer  (maltsters).    16.<ind> Cerecom is already the largest trader of malting  barley in the Community with a 4.1% market share. ACTI's  market share is about 1%. Therefore, after the concentration  the total market share of ACTI and Cerecom will amount to  about 5% as far as free market sales are concerned..    17.<ind> If market shares at country level are taken into  account, combined market shares of ACTI and Cerecom higher  than 10% are reached in only three countries: the  Netherlands (12.8%), Greece (33.8%) and Portugal (41.5%).  However, in Greece and Portugal there is no addition of  market shares since only Cerecom is active in these markets.  The high market share of Cerecom in these two countries can  be explained by the fact that in both Greece and Portugal  total consumption largely exceeds local production, and  imports are made by only two large maltsters which prefer  suppliers who are able to deliver large quantities.    VI.<ind> CONCLUSION    18.<ind> In view of the above, the proposed concentration  does not raise serious doubts as to its compatibility with  the Common Market.    <ind> For the above reasons, the Commission has decided not  to oppose the notified operation and to declare it  compatible with the common market and with the functioning  of the EEA Agreement. This decision is adopted in  application of Article 6(1)(b) of Council Regulation No  4064/89.  <tab> For the Commission,