CELEX: 31991M0081
Language: en
Date: 1991-06-06 00:00:00
Title: COMMISSION DECISION of 06.06.1991 declaring a concentration to be compatible with the common market (Case No IV/M.0081 - VIAG / CONTINENTAL CAN) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31991M0081

COMMISSION DECISION of 06.06.1991 declaring a concentration to be compatible with the common market (Case No IV/M.0081 - VIAG / CONTINENTAL CAN) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 156 , 14/06/1991 P. 0000

 COMMISSION DECISION of 06.06.1991 declaring a concentration to be compatible with the common market  (Case No IV/M.081 - VIAG / CONTINENTAL CAN) 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 Registered with advice of delivery To the notifying party Dear Sirs, Re: Case No. IV/M081 - VIAG/CONTINENTAL CAN  1.<ind> The notified operation concerns the acquisition by VIAG AG of the majority of the sharecapital of five  companies, i.e. Thomassen & Drijver-Verblifa N.V., Schmalbach-Lubeca-Werke AG, Continental Can France  S.N.C., Continental Pet France S.N.C. and Continental Can Company Ltd. which together constitute  Continental Can's European packaging business (hereinafter referred to as CCE).  2.<ind> After examination of the notified operation, the Commission has concluded that the notified operation  falls within the scope of application of Council Regulation No. 4064/89 and does not raise serious doubts as to its  compatibility with the common market.  <ind> CONCENTRATION   3.<ind> After completion of the operation VIAG will be the owner of the majority of the sharecapital of the five  companies concerned. The notified operation is thus clearly a concentration within the meaning of Art. 3 of the  Merger Regulation.   COMMUNITY DIMENSION  4.<ind> The combined aggregate worldwide turnover of the undertakings concerned was  5.747 mio. ECU in  1990 . At least two companies achieved an aggregate Community-wide turnover of more than 250 mio. ECU of  which not more than two-thirds was achieved in one and the same Member State. Thus the notified operation  has a Community dimension.  <ind> COMPATIBILITY WITH THE COMMON MARKET  A)<ind> AFFECTED MARKETS  5.<ind> VIAG AG is active in the energy sector, in the manufacturing of aluminium, chemicals, ceramics and  glass products as well as in trade and services. In 1990, VBB VIAG-Bayernwerk-Beteiligungs-GmbH, a joint  venture controlled by VIAG AG and Bayernwerk AG, acquired 51% of the shares of Gerresheimer Glas AG.  Gerresheimer Glas AG is active in glass and plastic packaging for beverages, food and other products.  <ind> The five acquired companies forming CCE's European packaging business are active in metal and plastic  packaging for beverages, food and other products. For metal packaging CCE uses as raw material both steel  (tinplate) and aluminium. VIAG already supplies CCE with aluminium through its subsidiary VAW (Vereinigte  Aluminium-Werke AG).  <ind> The notified operation thus raises both horizontal aspects (combination of the packaging business of  Gerresheimer and Continental Can) and vertical aspects (supply of aluminium by VAW to the acquired  companies).  B)<ind> HORIZONTAL ASPECTS  6.<ind> The European packaging industry as a whole comprises packaging products made of metal (aluminium  and tinplate), glass, plastic and paper. This industry does not however constitute one market but is divided in  several markets based on a combination of the packaging material and the use made of the packaging product.  Depending on the combination of these two parameters, different packaging products are more or less  substitutable.  7.<ind> For the present decision it is only necessary to examine those products for which there is a horizontal  overlap between CCE's and Gerresheimer's product lines which are set out in Annex 1.  8.<ind> It follows from Annex 1 that the main overlap concerns packaging for beverages and food. In all other  fields, the packaging markets are very much segmented and the two companies concerned are mostly active in  different market segments.  <ind> Beverage Packaging  9.<ind> CCE is active in the beverage packaging field with tinplate cans, aluminium cans and plastic bottles  (PETS). Gerresheimer manufactures and sells glass bottles for beverages. The parties have submitted that the  market within which their position has to be assessed is the market for all beverages (beer, carbonated soft drinks  and non-carbonated soft drinks) which uses glass bottles, metal cans, plastic bottles and paper packaging  products. This market would be a Community market.   <ind> The relevant product markets  10.<ind> In 1990, the total EEC consumption of beer and soft drinks (including draft consumption) was 79.826  mio. ltrs. of which 66% were soft drinks and 34% beer. Carbonated soft drinks represented 37% of the total soft  drink consumption. Taking only the beer and carbonated soft drink sectors (CCE is only active in these sectors,  thus no direct overlap exists in the non-carbonated soft drink sector) and excluding draft consumption, the total  EEC consumption was 34.223 mio. ltrs. (beer 46.5%, carbonates 53.5 %). In the carbonated soft drink sector  glass holds 50.5%, plastic 30.8% and cans 18.6%. For beer the respective shares of packaging materials were  glass 85%, cans 14.4% and plastic 0.6%. These shares have not changed materially over the last four years  although metal packaging slightly increased its share (between 1% and 2%). Thus glass is generally very strong  in most countries except in the United Kingdom and Ireland where metal cans are stronger than glass. For beer,  virtually only glass and cans are accepted packaging products. For carbonated soft drinks, three packaging  materials are used. For non-carbonated soft drinks, the main packaging materials are glass, plastic and paper  (mainly for juices). Cans have only an insignificant share in that sector.  11.<ind> Given this situation and the fact that the overlap between CCE and Gerresheimer only exists in the  beer and carbonated soft drink sectors, it is sufficient to examine whether for these beverages glass, cans and  plastic belong to the same product market. The answer to this question depends on a variety of factors which  make these packaging products more or less interchangeable.  12.<ind> On the demand side the degree of interchangeability depends inter alia on:  <ind>  -<ind> the specific beverage packaged: for beer virtually only glass and cans are accepted; for carbonated  soft drinks glass, plastic and cans are used; <ind>  -<ind> the consumer preferences: within each beverage sector the shares of the different packaging  materials remain relatively stable; this seems to reflect preferences of consumers based on perceptions of taste,  convenience and possibly other factors which change only in the medium or long term; <ind>  -<ind> the price differences: the prices for the various packaging materials vary considerably which  would indicate that these materials belong to different product markets; <ind>  -<ind> the competition in the downstream market of filled products: unless the consumers were to regard  the different drinks as perfectly substitutable which is certainly not the case for all the drinks considered, the  impact of downstream competition on the packaging market depends in the short term on the cost share of the  packaging product in the sales price of the final filled product. This cost share is generally small with the result  that price changes in the different packaging products would not provoke significant price changes of the filled  products and thus would not be  likely to cause a switch by the filling companies from one packaging  product to  another. Therefore there exists a relative independence of prices between the different packaging products.  Changes in packaging products material rather depend on demand trends in the market, including  environmental aspects such as the pressure against  one-way packaging; <ind>  -<ind> the filling equipment: except for tinplate and aluminium cans which can be filled with the same  machines, each packaging material requires specific filling machinery;   13.<ind> On the supply side, the following factors need to be taken into account:   <ind>  -<ind> the use of different raw materials creating different cost structures for the suppliers of glass,  plastic and metal packaging products; <ind>  -<ind> the use of different manufacturing technologies and equipment which, except for beverage  tinplate and aluminium cans, make it technically impossible to switch production from one packaging product to  another;  14.<ind> In view of the above, the Commission cannot accept the parties' submission that there is only one  beverage packaging market comprising glass, plastic and cans. It considers that these packaging products may  belong to separate markets which only compete to a limited extent which is not sufficient to ensure effective  competition between these different products in the short term. However, for the reasons set out later the  Commission does not think it necessary to exactly delimitate the different product markets for the purposes of  the present decision.  <ind> The geographic reference markets  15.<ind> The geographical overlap between CCE's and Gerresheimer's activities concerns mainly Germany and  the Netherlands and to a lesser extent also France (see Annex 1). It is thus only necessary to examine whether  these territories or parts thereof could constitute together or individually separate geographic markets. This  examination can also be limited to beverage cans and glass bottles where CCE and Gerresheimer have their  strongest positions.  16.<ind> The following factors influence inter alia the geographic scope of competition between the suppliers on  the separate product markets envisaged:  <ind> -<ind> the transport costs: because empty cans and glass bottles have only a small value and take up a  great deal of space, they cannot economically support transport costs over a long distance; the average shipping  distance of cans is approximately 200 km; longer transports are only envisaged if customer demand in a given  area does not support a plant or in the period leading up to the construction of a manufacturing plant. CCE sells  approx. 95% of all its beverage cans to customers located in countries where it has a production plant, i.e. in  Germany, the Netherlands, Belgium, France (Dunkirk) and the United Kingdom/Ireland. For glass bottles the  area of distribution is even more reduced because of the heavier weight compared to cans; <ind> -<ind> the proximity to customers: for large filling companies just-in-time deliveries and security of  deliveries are essential elements in the choice of a supplier; daily deliveries of large volumes are regular in an  industry where fillings may be undertaken at very high speed; there is also a need for close customer liaison over  modifications of shape, size or decoration of certain products and for after-sales service;  17.<ind> Though it is difficult to exactly delimitate the relevant geographic markets for can and glass bottles  used for beverages, the above factors tend to indicate that there could be several regional geographic markets of  which one would be the territories of Germany, the Benelux and Northern France. It is in that region that CCE  and Gerresheimer have their main activities and hold strong market positions.  <ind> Dominance  18.<ind> In 1990, CCE's net sales amounted to approx. [] ECU for beverage cans and to approx. [] ECU for  beverage plastic bottles. Gerresheimer's sales of beverage glass bottles amounted to approx. [] ECU.  19.<ind> On the basis of the information obtained by the Commission CCE's 1990 market share and that of its  competitors for beverage cans (excluding glass and plastic as substitutes) for the combined beer and carbonated  soft drink sector in the countries relevant for the present decision [Market shares for the regional market  considered by the Commission to be relevant (see point 17) are not available; for practical reasons therefore the  Comission has based its assessment on national market figures in the countries constituting the assumed regional  market.] are as follows:   Germany<tab> Netherlands<tab> Belgium<tab> France CCE[] - <tab> CCE[] - <tab> CMB - <tab> CCE[] - PLM - <tab> ANC - <tab> CCE[] - <tab> CMB - ANC - <tab> PLM - <tab> PLM - <tab> ANC - CMB - <tab> CMB - <tab> ANC - <tab> PLM - Total 100<tab> Total 100<tab> Total 100<tab> Total 100  <ind> [For purposes of publication these market shares are deleted. They largely exceed 25 %].  <ind> In terms of capacity installed in the geographic region of Germany, the Benelux and Northern France  CCE holds about [] of the total capacity in that region.  20.<ind> The beverage can market is thus highly concentrated and in fact in the hands of only four major  suppliers. The share of "others" is virtually inexistent in the region considered. At EEC level, the share of  "other" suppliers seems to have considerably decreased over the last 4 years from 16% in 1987 to 5% in 1990.  The four major suppliers thus hold 95% of the total EEC market (ANC [], CCE [], CMB [], PLM [].  21.<ind> There is, however, a demand side with a considerable buying power, particularly in the carbonated soft  drink sector where nearly 60% of the market demand is in the hands of 5 buyers. CCE's 10 top customers for  beverages accounted in 1990 for over 70% if its total sales. These large volume customers have a policy of dual  or triple sourcing  and can easily play one supplier against the other. The beverage can  market is also  characterized by a high growth rate (8% in Germany - 12% at EEC level) which causes regular capacity  additions.  22.<ind> CCE's activities in the beverage plastic bottles market (mainly PETS) is far less important. That  developing market is characterized by low entry barriers and an increasing number of suppliers.  23.<ind> On the basis of the information obtained by the Commission Gerresheimer's 1990 market share for  beverage glass bottles in Germany (over 80% of its sales) is estimated at [For purposes of publication these  market shares are deleted. They are below 25%.]. Its main competitors in Germany are  Oberland Glas AG  (controlled by St. Gobain), Nienburger Glas, PLM, Heye and Bayerische Flaschenglashuettenwerke Wiegand.  Gerresheimer's exports relate  mainly to bottles for beer sold in the Netherlands (below [For purposes of  publication these market shares are deleted. They are below 25%]  market share) and in France (below [For  purposes of publication these market shares are deleted. They are below 25%] market share).  24.<ind> In the light of the above, VIAG's proposed acquisition of CCE does not materially change CCE's or  Gerresheimer's market position. If one considered glass bottles and cans as close substitutes for beer; glass,  plastic and cans as close substitutes for carbonated soft drinks (see point 10 above), CCE's and Gerresheimer's  combined market share in their biggest national market, i.e. Germany, would necessarily lie between CCE's []  can market share and Gerresheimer's [] glass market share. Their combined market share would have to be  weighted by the relative  importance of glass and cans in this German market. Their combined market share  would probably be in the region of approx. [For purposes of publication these market shares are deleted. They are  in the region between 20 and 30%.] for beer and [For purposes of publication these market shares are deleted.  They are in the region between 20 and 30%.] for carbonated soft drinks.  25.<ind> If one considers that  cans and glass bottles used for beverages belong to separate markets, no  substantial  strengthening of CCE's or Gerresheimer's market position occurs through the addition of market  shares.   <ind> Food packaging  26.<ind> Food packaging is CCE's second most important activity with 1990 sales of approx. [] ECU. CCE  manufactures and sells tinplate/aluminium cans and plastic containers mainly in Germany and the Benelux.  Gerresheimer is active in food packaging  with glass containers (1990 sales of approx. []. ECU with 85% of its  sales in Germany). It exports glass containers mainly to France and the Netherlands. The geographic overlap is  thus mainly Germany and the Benelux.  27.<ind> In food packaging, cans dominate with 85% of the EEC market volume compared with 9%  for plastic  and 6% for glass. These shares are similar in all EEC Member States.  28.<ind> On the basis of the information obtained by the Commission CCE's 1990 market share for food cans is  estimated in Germany at [For purposes of publication these market shares are deleted. They largely exceed  25%.], in the Netherlands at  [For purposes of publication these market shares are deleted. They largely exceed  25%.] and in Belgium at [For purposes of publication these market shares are deleted. They largely exceed  25%.]. At EEC level its market share would only be []. It estimated the market share of its main competitor  CMB Packaging at [] at EEC level with the following national market shares: Spain [], France [], U.K. [],  Germany [], Italy [], and the Benelux [].  29.<ind> CCE is active in several food can segments: fish, meat, petfood, ready meals (soups), fruit and  vegetables, dairy products and snacks. In Germany and the Benelux, CCE holds very strong historical market  positions in some of these segments: in fish cans [For purposes of publication these market shares are deleted.  They very largely exceed 25%.] in Germany, in meat and ready meals [For purposes of publication these market  shares are deleted. They very largely exceed 25%.]  in Belgium and [For purposes of publication these market  shares are deleted. They very largely exceed 25%.]  in the Netherlands and in petfood [For purposes of  publication these market shares are deleted. They very largely exceed 25%.]  in the Netherlands.  30.<ind> In food glass containers Gerresheimer estimates its market share at [For purposes of publication these  market shares are deleted. They are below 25%.] in Germany, [For purposes of publication these market shares  are deleted. They are below 25%.]  in France and [For purposes of publication these market shares are deleted.  They are below 25%.]  in the Netherlands. Gerresheimer is mainly active in the segments of babyfood, instant  coffee/tea, marmelades, fruit and vegetables.  31.<ind> In the light of the above, the notified operation does not materially strenghten either CCE's or  Gerresheimer's market position. If one considered glass containers as close substitutes to food cans,  Gerresheimer could only strenghten CCE's position if Gerresheimer's market shares were equally very important.  Its market shares are however far below 25%. If in addition one considered as relevant product markets those  market segments where CCE is very strong, i.e. fish cans, meat and ready meals and petfood, no strenghtening  of CCE's position on those markets can occur because Gerresheimer is not active in those markets. In all other  market segments CMB is a strong competitor. Unlike CCE, CMB is active in almost all EEC countries and is the  leader in the food packaging market generally. Other competitors in the geographic region considered are ANC  (Pechiney), Crown Cork Seal and Ferembal.  32.<ind> If for reasons similar to the beverage packaging market one limits the relevant product market to cans,  no strenghtening of CCE's market position can result from its acquisition by VIAG.  <ind> General packaging and aerosols  33.<ind> General packaging comprises a wide range of packaging products for household and industrial  products. The main materials used are metal (32%) and plastics (67%). This market is very segmented and  Gerresheimer and CCE are active in different segments: while Gerresheimer manufactures mainly plastic  containers for cosmetics and pharmaceuticals, CCE produces metal containers for household and industrial  products (e.g. paints, chemicals, etc...).  34.<ind> Aerosols are produced both in metal (69%) and glass (31%). Here again Gerresheimer and CCE are  active in different segments: Gerresheimer manufactures only glass aerosols for cosmetics (e.g. perfume) while  CCE produces aerosol cans of bigger sizes used for hairspray, insecticides, paints, cleaners, etc.  <ind> There is thus no overlap in these specific market segments and hence no possible strengthening of CCE's  or Gerresheimer's market position.  <tab> Closures  35.<ind> CCE manufactures metal vacuum closures used for glass containers in the food and beverage industry  and plastic closures used for metal/composite cans, cosmetics, cleaners and small containers for food and  delicatessen (1990 sales of approx. [] ECU). Gerresheimer manufactures cork-stoppers and stoppers made of  plastic and cork used as tops in the beverage industry (1990 sales of approx. [] ECU).  36.<ind> There is thus no direct overlap between CCE and Gerresheimer's products. However, the two parties  will have the opportunity to offer customers Gerresheimer glass containers with CCE's metal closures and to  jointly develop new product applications specially adjusted to each other. Even if this advantage were to be  considered as relevant under Art. 2 (1) of the  Regulation, it could in general only harm competition  if CCE or  Gerresheimer were already in a dominant position in their respective market.  37.<ind> The market for closures, be it only metal closures or metal and plastic closures, is a Community  market. Closures are easily transportable over long distances because their packaging density is high. On the  EEC metal closures market CCE is the leader with approx. [] market share. CMB Packaging is the second  biggest supplier with [] market share followed by Italcaps [], Massilly [], and Cebal (Pechiney) []. This market is  thus highly concentrated (two suppliers holding 76%  of the EEC market). CCE is also the leader in technology  for metal vacuum closures. On the EEC plastic closures market CCE and Gerresheimer hold only very small  market shares.  38.<ind> The market for closures is further characterized by a good deal of innovative activity and increasing  possibilities of substitution between several materials, in particular metal and plastic. This market is also  growing fast (approx. 8% p.a.) and customers apply more and more European purchase strategies.  39.<ind> Given this market structure and the fact that customers have alternative suppliers for both closures and  glass containers which are able to build up the necessary capacity to follow the growing demand, there is no real  risk that CCE or Gerresheimer could force upon their customers a system selling approach for glass containers  and closures which would seriously affect other closure or glass container suppliers.  <ind> Conclusion  40.<ind> In none of the markets considered will VIAG's acquisition of CCE create or strengthen a dominant  position as a result of which effective competition would be significantly impeded in the common market or in a  substantial part of it.   C)<ind> VERTICAL ASPECTS  41.<ind> The proposed concentration will establish a vertical relationship between CCE being a packaging  manufacturer and VAW being an aluminium producer and a fully owned subsidiary of the acquiring party  VIAG. Since metal represents approximately 60% of the total cost of manufacturing metal packaging and both  companies belong to the leading firms of their respective industries, this relationship will have an impact on  competition on the affected upstream metal supply market as well as on the affected downstream packaging  markets. The impact will in principle be the same for all metal packaging markets, on which CCE is active.  <ind> Impact on packaging markets  42.<ind> CCE will ensure its supplies with aluminium rolled products and gain other  advantages through the  envisaged transaction. Actual competitors of the vertically integrated firm might in turn have to face raising  costs for their purchases of aluminium and ultimately be foreclosed from the market, if they depended on  supplies from VAW. Potential competitors of CCE may find it significantly more difficult to enter the metal  packaging markets. It must therefore be examined whether the improved access to supplies that CCE will gain  through the concentration will create or strengthen a dominant position for CCE on the metal packaging  markets.   43.<ind> The foreclosure effect of the envisaged concentration could only be significant if  aluminium rolled  products for the packaging industry constitute a separate product market and are not part of a larger market  including tinplate for packaging purposes. The insignificance of the foreclosure effect can already be  demonstrated by the 30% share aluminium holds of all metal purchases by the packaging industry. There are in  addition to this nine major suppliers of aluminium and tinplate (Alcan, Alcoa, Reynolds, Sacilor-Usinor, British  Steel, Thyssen, Hoogovens, Hoesch and Cockerill) which have no interest in firms in the downstream packaging  market and to which actual or potential competitors of CCE could turn to. These independent suppliers are in  terms of market share as strong as VAW or even stronger.  44.<ind> The foreclosure effect would, however, be much more significant, if aluminium rolled products had to  be considered as a separate product market. There are mainly three reasons which support a narrow product  market definition:  <ind> -<ind> the welding lines for manufacturing metal packaging are adapted to the specific metal used. A  change to another metal can only be done with additional costs; <ind> -<ind> certain parts of metal packaging products can at the present stage of technology only be  manufactured out of aluminium.  Ends or tabs for beverage cans, for instance, are only made out of aluminium; <ind> -<ind> certain customers of the  packaging industry prefer aluminium to tinplate. This is caused by the  product they want to package (fish, for instance, can only be canned in aluminium packaging) or by consumer  preferences in some Member States (aluminium is, for instance, exclusively used in Italy and Greece for  beverage cans containing softdrinks and beer).  <ind> In view of the above reasons, aluminium rolled products for the packaging industry may constitute a  separate product market. However, the Commission does not think it necessary to exactly delimitate the different  product markets for the purposes of the present decision. Even assuming that aluminium rolled products form a  relevant product market of its own, the concentration will not create or strenghten a dominant position for CCE  on the metal packaging markets.   45.<ind> Market concentration on the aluminium market is much higher than on the larger metal supply  market. The combined market share of the leading five suppliers including VAW amounts to over 90%, even  Community-wide. The concentration rate is even higher in certain segments of the market, since not all kinds of  aluminium rolled products delivered to the packaging industry are produced by all five suppliers. Aluminium  body stock for beverage cans, for instance, is supplied by only three firms. After completion of the concentration,  only one out of these three will not be linked with a packaging manufacturer.  46.<ind> The foreclosure effect will therefore be more significant on the aluminium market than on the larger  market which includes tinplate. However, there will remain at least one major aluminium supplier for each  segment of the market, who will not be vertically integrated after the concentration and to whom competitors of  CCE could turn to for their demand. They are Alcan for all rolled products, Alcoa for end stock and Reynolds for  body stock for fish cans. These major suppliers dispose of the necessary capacity to supply competitors of CCE.  This will even be more so if CCE decided to choose VAW as its principal supplier, because CCE's demand  exceeds VAW's actual sales at  present  considerably. Actual and potential competitors of CCE will therefore not  depend on aluminium supplies from either VAW or the other two aluminium producers (Pechiney and Reynolds)  with interests in the packaging industry. There are also no indications that future demand for aluminium will not  be met by these independent producers. Future demand of aluminium may be higher than today, because of the  higher compatibility of this metal with environmental considerations.   47.<ind> Alcan also belongs to the small group of independent aluminium suppliers competitors of CCE can  turn to. The fact that Alcan runs an aluminium rolling mill and related operations at Norf, Germany, in a joint  venture together with VAW (Aluminium Norf GmbH) does not preclude Alcan from behaving independently of  VAW. This applies especially in a situation where the commercial interests of both parent companies of the  production joint venture do not match. Alcan has been one of the principal suppliers of CCE in the past. It  cannot take it for granted that this relationship will continue indefinitely after CCE is linked with VAW and it  may wish to develop alternative supply relationships. It is therefore unlikely that the vertically non-integrated  aluminium producers will apply the same sales strategy as the vertically integrated producers.  48.<ind> Imports from outside the Community reduce also the possible foreclosure effect of the proposed  transaction for aluminium end stock for which there are at least three non-EC suppliers available. Even so tariff  barriers and uncertainties like fluctuating currency exchange rates have kept packaging manufacturers from  establishing closer relationships with non-EC suppliers in the past.  49.<ind> Finally, substitutional competition from tinplate producers will continue to exert some influence on the  assumed aluminium market. Even if tinplate did not belong to the same metal supply market for the packaging  industry and might only be an imperfect substitute for aluminium, packaging manufacturers can to a certain  degree interchange tinplate for aluminium and are actually doing it. The production lines for beverage cans  recently installed by CCE and ANC (Pechiney) in Dunkirk have been layed out for tinplate. This shows that  competition from tinplate limits to a certain extent the scope of action of the aluminium suppliers which have  additionally to cope with higher production costs than the tinplate suppliers.  50.<ind> The conclusion therefore is that the proposed transaction will not cause a foreclosure effect for  competitors of CCE which would create or strenghten a dominant position of CCE on any of the affected  packaging markets.  <ind> Impact on aluminium market  51.<ind> Aluminium suppliers are also affected by the vertical relationship to be established between CCE and  VAW. They may loose CCE, who is the leading purchaser of aluminium rolled products for the packaging  industry within the Community, as an actual or potential customer through the proposed concentration. VAW  may in turn benefit from the transaction, gain a higher share of aluminium supplies to the packaging industry  and foreclose CCE for other aluminium suppliers.  <ind> However, this foreclosure effect does not result in the creation or strengthening of a dominant position on  the assumed market for aluminium rolled products. Approximately 40% of present demand for aluminium will  still come from vertically non-integrated manufacturers. Among these independent firms are major  manufacturers like CMB and PLM. It is highly likely that these will for their aluminium supplies not favour  producers which are linked with their competitors. Therefore, both these and independent aluminium producers  will have a common interest to develop alternative supply relationships. There will remain from the competition  point of view a sufficient amount of demand from packaging manufacturers for vertically non-integrated  aluminium producers. The proposed concentration will therefore also with regard to its vertical effects on the  aluminium market neither create nor strengthen a dominant position.  <ind> ANCILLARY RESTRAINTS  52.<ind> The Stock Purchase Agreement of 26 April 1991 contains a three year non-competition obligation on  the part of the seller. This non-competition  obligation is limited to the activities transferred to VIAG and applies  to the territory of the EEC and a number of other European countries where CCE's European packaging  activities were located prior to the sale to VIAG. This non-competition obligation constitutes a restriction  directly related and necessary to the implementation of the concentration. The present decision covers this non- competition obligation.   FINAL ASSESSMENT  Based upon the above findings the Commission has come to the conclusion that the proposed concentration does  not raise serious doubts as to its compatibility with the common market.  For the above reasons the Commission has decided not to oppose the notified concentration and to declare it  compatible with the common market. This decision is adopted in application of Article 6(1)(b) of Council  Regulation No. 4064/89.  For the Commission,  ANNEX 1 CONTINENTAL CAN Material <tab> Use <tab> Main sales territories 1. Tinplate / Aluminium  . <ind> beverages : carbonated soft drinks + beer (2p. cans + ends) <ind>  D, F, NL, B, UK, IRL  . <ind> food: fish, meat, petfood, ready meals, fruit, vegetables, snacks, dairy products, (2p. +3p. cans) <ind>   D, NL, B  . <ind> general packaging : for household + industrial products (cans, pails, boxes, barrels, drums, etc.) <ind>   D, NL, B  . <ind> aerosols : hairsprays, insecticides, paints, cleaners <ind>  D, NL, B   . <ind> closures : white cap closures for glass containers for juices and food <ind>  D, NL, B, UK    2. Plastic (mainly PETS)  . <ind> beverages : mainly for carbonated soft drinks <ind>  D, NL   . <ind> food, household + industrial products : margarines, desserts, ice-cream, trays, tops, cups, detergents,  insecticides, etc. <ind>  D, NL, B   . <ind> closures : for metal / composite cans, cosmetics, cleaners, small containers for food + delicatessen <ind>   D  ========= GERRESHEIMER 1. Glass  . <ind> beverages : soft drinks + beer <ind>  D, NL, F  . <ind> food: babyfood, instant coffee / tea, fruit + vegetables, marmelades <ind>  D  . <ind> glass bottles for cosmetics, pharmaceuticals + spirits (incl. aerosols) <ind>  D   . <ind> tubing glass : for medical and pharmaceutical applications <ind>  D  2. Plastic  . <ind> plastic containers for cosmetics, pharmaceuticals, medical products, personal care + cleaning products  <ind>  D   . <ind> closures : cork-stoppers for the beverage industry <ind>  D