CELEX: 32013M7010
Language: en
Date: 2013-12-09 00:00:00
Title: Commission Decision of 09/12/2013 declaring a concentration to be compatible with the common market (Case No COMP/M.7010 - BOLTON / TRI-MARINE / JV) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

                                        Brussels, 9.12.2013
                                        C(2013)9124 final

                                        [pic]

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|                                                                    |To the notifying party:                                                 |

Dear Sir/Madam,

Subject:    Case No COMP/M.7010 – Bolton/Tri-Marine/JV
         Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

    1) On 4 November 2013, the European Commission received a notification  of  a  proposed  concentration  pursuant  to  Article  4  of  Council
       Regulation (EC) No 139/2004 (the 'Merger Regulation') by which the undertaking Bolton Group International S.r.l. ('Bolton', Italy) intends
       to acquire within the meaning of Article 3(1)(b) of the  Merger  Regulation  joint  control  over  the  undertakings  Tri-Marine  Holdings
       Coöperatief U.A. (Netherlands), Tri Marine US Holdings, LLC (United States), Cape Fisheries Holdings, LP (United States) and CFH  GP,  LLC
       (United States), forming the Tri Marine group, by way of purchase of shares ('the Transaction').[2] Bolton and the Tri  Marine  group  are
       designated hereinafter as ('the Parties' or 'the Merged Entity').

       THE PARTIES

    2) Bolton produces mass consumption products in the following industries, (i) food, (ii) household care,  (iii)  personal  and  health,  (iv)
       beauty care, (v) adhesives and glues. In the food sector, Bolton is mainly active in the canned seafood business, namely in the production
       and sale of canned tuna and other canned pelagic fish products, including popular canned tuna brands such as Rio Mare, Saupiquet,  Palmera
       and Calvo.

    3) The Tri Marine group is active in the canned seafood supply chain, namely in the fishing, trading and processing of tuna and other pelagic
       fish.

       THE TRANSACTION

    4) The Transaction entails the  acquisition  of  joint  control  by  Bolton  over  the  undertakings  Tri-Marine  Holdings  Coöperatief  U.A.
       (Netherlands), Tri Marine US Holdings, LLC (United States), Cape Fisheries Holdings, LP (United States) and CFH GP, LLC  (United  States),
       forming the Tri Marine group, by way of purchase of shares.

    5) Prior to the Transaction, the Tri Marine group comprised a total of seven legal entities with  a  number  of  subsidiaries.[3]  Mr  Renato
       Curto, a natural person, holds controlling interests in the holding companies of the Tri Marine Group involved in the Transaction. In view
       of the proposed Transaction, the Tri Marine Group is being reorganised. Tri-Marine Holdings Coöperatief U.A is established as a new  joint
       venture to which Tri Marine International (PTE) Limited Singapore and Tri Oceanic Overseas Holdings LLC are contributed. Further, three of
       the Tri Marine group entities are contributed to the new legal entity Tri Marine US Holdings, LLC. As a result, four Tri  Marine  entities
       will be subject to the Transaction: (i) Tri-Marine Holdings Coöperatief U.A., (ii) Tri Marine US Holdings, LLC, (iii)  CFH  GP,  LLC,  and
       (iv) Cape Fisheries Holdings, LP.

    6) Under the terms of an Umbrella Agreement and three Share Purchase Agreements signed on 30 September 2013  Bolton  would  acquire  minority
       interests in each of those four entities, namely:

         – a […]% interest in Tri-Marine Holdings Coöperatief U.A.,

         – a […]% interest in Tri Marine US Holdings, LLC,

         – a […]% interest in CFH GP, LLC, and

         – a […]% interest in Cape Fisheries Holdings, LP.[4]

    7) Mr Curto will retain (directly or indirectly) the majority interests in these four companies.

    8) The proposed transaction falls within the scope of paragraph 45 of the Commission's Jurisdictional Notice under Council Regulation (EC) No
       139/2004 on the control of concentrations between undertakings[5] (hereinafter "the JN"). The acquisitions are interdependent as they  are
       subject to the same Umbrella Agreement which stipulates that none of the transactions shall be deemed to have taken place if and until all
       other transactions have taken place.[6] Therefore, the four transactions constitute one concentration in the form of  the  acquisition  of
       joint control by Bolton of a single business within the meaning of Article 3 of the Merger Regulation.

    9) Although there is no equality in voting rights or in appointment rights to decision-making bodies, Bolton  will  have  a  number  of  veto
       rights in all four entities concerned. These veto rights relate to, among other things, the appointment of senior management,  the  annual
       budget, the business plan, as well as any investments above […] within the annual budget and above […] outside of the annual budget. These
       rights go beyond the normal protection of the rights of minority shareholders because they give Bolton the power to  block  actions  which
       determine the strategic commercial behaviour of the Tri Marine group.[7] The Tri Marine group will thus be jointly  controlled  by  Bolton
       and Mr. Curto after the Transaction.[8]

       EU DIMENSION

   10) The undertakings concerned have a combined aggregate world-wide turnover[9] of more than EUR 2 500 million.[10]  In  each  of  France,[11]
       Italy[12] and Spain[13] the combined aggregate turnover of the undertakings concerned is  more  than  EUR 100 million  and  the  aggregate
       turnover of each of at least two of the undertakings concerned is more than EUR 25 million. The aggregate EU-wide turnover of each of  the
       undertakings concerned is more than EUR 100 million,[14] but they do not achieve more than two-thirds of their aggregate EU-wide  turnover
       within one and the same Member State. The Transaction therefore has an EU dimension pursuant to Article 1(3) of the Merger Regulation.

       MARKET DEFINITION

1 The value chain

   11) The Transaction concerns all the phases along the value chain of the fishing industry, from the  extraction  (catching  of  raw  material,
       notably tuna and pelagic fish)[15] and trade through processing (converting the raw material into semi-finished or finished  products)  to
       marketing of canned seafood products (supply of the products to wholesalers, retailers and customers in the food service sector).

   12) The tuna and pelagic fish industries rely exclusively on wild-caught production. First, fish are caught by fishing  vessels  in  different
       areas across the world. Fishing vessels sell and deliver their catch directly to the processing plants located near the  port  where  they
       unload their harvest (i.e. mainly in developing countries) or to traders.[16] Fish is then put into cartons, which are either processed in
       situ or sent to blast freezers.

   13) Tuna is usually supplied to processors or traders in the form of round tuna,[17] which is frozen either directly on-board or once unloaded
       from the vessels. Once the product is frozen, it is placed in cold storage until it is shipped to the processing plants.

   14) Once delivered to the processing plant, round tuna is gilled, gutted, headed, cut, loaded into trays and taken to  the  pre-cooker.  After
       pre-cooking and cooling, the cleaners remove the skin from the fish and separate the loins from  the  skeleton.  This  further  processing
       phase is called 'loining'. Tuna loins are then packed and frozen so as to be shipped to canneries, or alternatively they are used directly
       in situ by the processor for its canned tuna captive production.[18]

   15) The last step, canning, is an automated process. Canneries can use both round tuna and tuna loins. Tuna is canned in  oil,  brine,  spring
       water, sauce, vegetable broth, or in “tuna salad” form. Once the cans are sealed, they are cooked a second time  (“retort  cooking”),  for
       two to four hours.[19] After the retort cooking, the cans are cooled, labelled, and packed into cardboard cases for distribution.

   16) The processing model for canned pelagic fish is similar to that of canned tuna, except for the fact that pelagic fish do not  require  the
       intermediate processing phase of loining.

   17) Once the fish has been fully processed (i.e. canned), it is sold (i) to private labels and/or brand owners who then distribute through the
       retail channel; (ii) to the food service sector (e.g. restaurants, caterers, etc); or (iii) directly to final consumers through the retail
       channel if the cannery/processor is a brand owner.

2 The positioning of the Parties in the value chain

   18) Both Parties are active in the supply chain for canned tuna and canned pelagic fish. Tri  Marine  mainly  operates  at  the  upstream  and
       intermediate levels of the supply chain as a raw material supplier and canned seafood manufacturer. To a much lesser extent, Tri Marine is
       active in downstream wholesale distribution of canned tuna and in the distribution of canned tuna to the food service sector or the retail
       channel.

   19) Bolton is mainly present in the intermediate and downstream levels of the supply chain  in  the  production  of  canned  seafood  and  the
       distribution of canned seafood to consumers, especially branded canned tuna.[20] To a much lesser extent, Bolton is active in the upstream
       supply of round tuna or tuna loins to canneries.

   20) The Transaction would then give rise to some horizontal overlaps between the Parties' activities (in any case with very small market share
       increments), but it would mainly result in the vertical integration between the Parties' activities along the supply chain. The  following
       tables illustrate the positioning of the Parties in the value chain:

|Table 1 –SUPPLY CHAIN OF CANNED TUNA                                                                                                  |
|              |1) Primary         |2) Processing                         |3) Wholesale        |4) Marketing/Distribution to customers |
|              |production         |                                      |distribution        |                                       |
|                                                                                                                                      |

   |                                                                                                                                      |
|Table 2 –SUPPLY CHAIN OF CANNED PELAGIC FISH                                                                                          |
|             |1) Primary          |2) Processing                       |3) Wholesale         |4) Marketing/Distribution to customers |
|             |production          |                                    |distribution         |                                       |
|             |Fishing/ Supply of  |Production of canned pelagic fish   |Canned pelagic for   |Canned pelagic for|Canned pelagic for   |
|             |pelagic fish        |                                    |private labels/brand |the food service  |distribution to      |
|             |                    |                                    |owners               |sector            |consumers through the|
|             |                    |                                    |                     |                  |retail channel       |
|Bolton       |                    |√                                   |√*                   |√**               |√                    |
|*Bolton Group sells marginal quantity of unbranded canned pelagic fish to private labels.                                             |
|**In 2012 Bolton sold unbranded canned mackerels exclusively to the food service sector in France.                                    |

   21) As regards pelagic fish, the Commission notes that Tri Marine only operates upstream as a supplier of pelagic fish that  is  addressed  to
       sectors other than canneries (i.e. production of fishing bait and/or animal feed production).[21] Therefore,  although  Bolton  has  minor
       activities downstream as a processor and distributor of canned pelagic fish for human  consumption,  since  Tri  Marine  does  not  supply
       pelagic fish for human consumption, the transaction does not give rise to any vertical link between the  Parties’  activities  in  pelagic
       fish, and thus these markets will not be further discussed in this Decision.

3 Relevant markets

1 Relevant product markets

   22) The markets concerned by the Transaction have not been previously investigated by the Commission.

   23) The Parties identify the following relevant product markets along the supply chain for canned tuna:

       i. supply of round tuna;

      ii. supply of tuna loins;

     iii. wholesale supply of canned tuna to private labels/brand owners;

      iv. supply of canned tuna to final customers through retailers;

       v. supply of canned tuna to the food service sector.[22]

       Tuna species/fishing methods

   24) The Parties submit that none of the markets in the tuna value chain should be sub-segmented on the basis of the different species of  tuna
       (Skipjack, Yellowfin, Albacore, Bigeye or Bluefin) or the fishing method.

   25) According to the Parties, both from a demand and supply-side perspective, all tuna species belong to the  same  market.  Fishing  vessels,
       catching methods, loining and canning processes do not change on the basis of the tuna species. Moreover, all tuna  species  are  suitable
       for the canning industry[23] and canneries buy a mix of different tuna species based on the different availability and price.  As  regards
       final customers, the Parties indicate that they cannot differentiate canned tuna on the basis of the tuna species contained in  the  cans.
       According to the Parties, in most countries such information is not provided on the can label, and in any case, once canned, the different
       tuna species do no present different taste characteristics.

   26) The Parties only operate fishing through 'purse seiner'[24] and 'pole and line'[25]  vessels.  The  Parties  consider  that  the  relevant
       markets should not be further segmented based on the fishing method, in particular because processing manufacturers  and  final  customers
       purchase tuna regardless of the fishing method.

   27) With regard to a possible segmentation based on the different tuna species, the result of the market investigation confirmed that, from  a
       supply-side perspective, such a segmentation is not applicable throughout the value chain.[26] However, from  a  demand-side  perspective,
       the market investigation indicated that (i) customers in the retail and food service sectors might have specific  preferences  as  regards
       the tuna species used for canned tuna, and that (ii) their purchase specifications for canned tuna usually include the indication  of  the
       desired tuna species. In any event, the precise product market definition can be left open since any segmentation by species does not have
       any impact on the competitive assessment in this case.

   28) With regard to the different fishing method, the market investigation showed that neither from a supply-side perspective nor from a demand-
       side perspective, canned tuna should be further segmented on that basis in this case.[27] The Commission notes that this could change  one
       day if EU legislation concerning compulsory information to consumer changes and information on species and fishing gear used could  become
       important for the choice of the consumers.

       Fresh market/canning industry and trading activities

   29) As regards the market for the supply of round tuna, the Parties consider that the market should not be further segmented on the  basis  of
       the 'destination' of the tuna, namely whether it is sold to the fresh market or the canning industry.

   30) Respondents to the market investigation confirmed that all tuna species are equally suitable for the canning  industry  but  not  for  the
       fresh market, for which some species (such as Yellowfin and Bluefin) seem to be preferable in view of their larger size.[28]  The  precise
       scope of the market for the supply of round tuna (i.e. possible further segmentation on the basis of the destination) can be left open, as
       in any case this would not have an impact on the competitive assessment of the Transaction.[29]

   31) The canning industry purchases round tuna and tuna loins directly from  producers  or  from  traders.  Whether  or  not  trading  activity
       constitutes a separate product market can be left open given that such  a  distinction  would  not  have  an  impact  on  the  competitive
       assessment of the Transaction.

       Branded v private label tuna

   32) As regards the markets for the supply of canned tuna (whether at the wholesale level or further downstream), the Parties  submit  that  no
       further segmentation should be made on the basis of whether canned tuna is marketed as a branded or private label product. On the  supply-
       side, there is no difference in the manufacturing process of branded and private label canned tuna. Canneries often  produce  canned  tuna
       for both private labels and brand owners. On the demand-side, canned tuna is a low cost  product,  mainly  addressed  to  price  sensitive
       consumers that can easily switch from brands to private labels and vice versa.[30]

   33) The results of the market investigation confirmed that canneries indeed produce canned tuna for both private labels and brand  owners  and
       that the commercial relationships with private labels customers and with brand owner customers do not differ to  any  significant  extent.
       The vast majority of customers confirmed that they consider that branded and private label canned tuna fully compete with each other.  For
       the purpose of this case, branded and private label canned tuna are therefore considered as belonging to the same product market.[31]

       Preservation liquids/ingredients/canning material

   34) The Parties argue that the markets for the supply of canned tuna should not be sub-segmented on the basis of the liquids used to  preserve
       the fish, the ingredients added to the fish or the canning material used. In fact, the Parties submit that canning is a totally  automated
       process and most canneries can produce any variety of canned tuna products.[32]

   35) The results of the market investigation confirmed supply-side  substitutability  in  this  respect.  However,  on  the  demand-side,  some
       customers in the retail and food service sectors perceived canned  tuna  in  different  preserving  liquids  and/or  canning  material  as
       different products.[33] In any event, the precise product market definition can be left open since the precise delineation has  no  effect
       on the competitive assessment in this case.

2 Relevant geographic market

   36) As regards the geographic scope of the markets for the supply of round tuna and tuna loins, the Parties stress that the majority of  round
       tuna or tuna loins that is processed in the EEA is imported from non-EEA countries and that the market is therefore  worldwide  in  scope.
       According to the Parties, it is common practice in the tuna industry to undertake all the processing stages, up to the loining,  as  close
       as possible to the catch areas, and to export the semi-processed  product  to  canneries  in  developed  countries.  This  allows  for  an
       optimization of the shipping/transportation costs.

   37) The results of the market investigation indicate that the majority of the operators in the value chain in the  upstream  markets  for  the
       supply of round tuna and tuna loins source and sell round tuna and tuna loins at worldwide level. This is confirmed by the import  figures
       provided by the Parties according to which almost the totality of the unprocessed tuna purchased in the EEA is imported from  outside  the
       EEA. Furthermore, no specific trading patterns emerged between specific geographic regions.[34] Given the worldwide  trade  patterns,  the
       Commission considers the markets for the supply of round tuna and tuna loins to be worldwide in scope.

   38) The Parties also submit that the market for the supply of canned tuna to private labels/brand owners is worldwide  in  scope  since  major
       brands and private labels in the EEA also source their products to be branded and labelled from low-cost production  centres  outside  the
       EEA. Within the EEA Spain is the main producing country of canned tuna (69%  of  the  total  European  production),  whereas  the  Italian
       production is below one-fifth of the European production and France and Portugal own respectively 7% and 4% of the canned tuna produced in
       Europe.[35] In conclusion the Commission considers that the supply of canned tuna to private labels/brand owners is at least EEA-wide.

   39) In relation to the downstream market for the supply of canned tuna through retailers, although the Parties consider that the market  could
       be wider than national, in view of previous cases analysed by national competition authorities,[36] the Parties ultimately  submit  market
       shares on a national basis.

   40) As far as the downstream market for the supply of canned tuna to the food service sector is concerned, the Parties acknowledge that in its
       decision making practice, the Commission has considered that the market for the supply of food products to  the  food  service  sector  is
       national in scope. However, they also submit that there has been a growing harmonisation and Europeanisation of this market.[37] Moreover,
       the Parties argue that in the food service sector, customers make their purchasing decisions on the basis of the product price rather than
       on the basis of its quality, taste and brand.[38] Consequently, according to the Parties, the market for the distribution of  canned  tuna
       to the food sector service should be considered worldwide or at least EEA-wide.

   41) In respect of the food service sector, all respondents in the market investigation suggested that this is a national market. However,  for
       the purposes of this decision, the exact scope of these markets can be left open, as in any case this would not  have  an  impact  on  the
       competitive assessment of the Transaction.

       COMPETITIVE ASSESSMENT

1 Horizontally affected markets

   42) The horizontal overlaps between the Parties' activities give rise to three affected markets, namely:

         – the worldwide market for the supply of round tuna;

         – the worldwide market for the supply of tuna loins;

         – the French market for the supply of canned tuna to the food service sector.

   43) The Parties' combined market shares in 2012[39] are summarised in the tables below:

|(i) Supply of round tuna to canneries                                                                               |
|                                                      |Worldwide                      |Worldwide only trading       |
|Tri Marine                                            |[20-30]%                       |[20-30]%                     |
|Bolton                                                |[0-5]%                         |[0-5]%                       |
|Combined market share                                 |[20-30]%                       |[20-30]%                     |
|(ii) Supply/trade of tuna loins to canneries                                                                        |
|                                                      |Worldwide                      |Worldwide only trading       |
|Tri Marine                                            |[30-40]%                       |[20-30]%                     |
|Bolton                                                |[0-5]%                         |[0-5]%                       |
|Combined market share                                 |[30-40]%                       |[20-30]%                     |
|(iii) Supply of canned tuna to the food service sector                                                               |
|                             |Spain                      |France                       |EEA                         |
|Tri Marine                   |NA*                        |[5-10]%                      |NA                          |
|Bolton                       |NA                         |[10-20]%                     |NA                          |
|Combined market share        |NA                         |[20-30]%                     |[0-5]%**                    |
|*Even though both Parties are active in Spain in the market for the distribution of canned seafood to the food      |
|service sector, they claim not to have enough information to estimate the size of the market and their respective   |
|market shares. Bolton's sales to the food service sector in Spain amounted to EUR […], whereas Tri Marine's sales   |
|amounted to EUR […].                                                                                                |
|**The Parties could not estimate precise market shares at EEA level.                                                |

   44) The Commission notes that Bolton's activities in the upstream markets for the supply of round tuna and loins are mainly captive  and  that
       the Transaction would not significantly modify the structure of those markets. In both markets, the increment in market  shares  would  be
       minimal at less than [0-5]%.

   45) The respondents to the Commission’s market investigation have not raised specific concerns related to the horizontal overlaps between  the
       business activities of the Parties.

   46) As regards the supply of canned tuna to the food service sector, only the French market would be horizontally affected. In that case,  the
       related market share increments would be [5-10]%. Customers confirmed that alternative suppliers to the Parties  exist  and  none  of  the
       respondents raised any concerns.

   47) Therefore, the Commission concludes that the Transaction is not likely to raise serious doubts as to its compatibility with  the  internal
       market in relation to the horizontally affected markets.

2 Vertically affected markets

   48) The Transaction gives rise to vertically affected markets resulting from the vertical link between the upstream market for the  supply  of
       round tuna and tuna loins, where Tri Marine is mainly active,[40] and the downstream markets for (i) the supply of canned tuna to  private
       labels/brand owners, (ii) the supply of canned tuna to the food service sector and (iii) the distribution  of  canned  tuna  to  consumers
       through the retail channel where Bolton is mainly active.

   49) The Parties' market shares[41] in 2012 are summarised in the tables below.

|UPSTREAM -  Supply round tuna to canneries                                                        |
|                                              |Bolton                  |Tri Marine                |
|WW                                            |[0-5]%                  |[20-30]%                  |
|UPSTREAM -  Supply of loins to canneries                                                          |
|WW                                            |[0-5]%                  |[30-40]%                  |
|DOWNSTREAM - (i) Supply of unbranded canned tuna to private labels/brand owners *                 |
|EEA-wide                                      |[0-5]%                  |[0-5]%                    |
|WW                                            |[0-5]%                  |[0-5]%                    |
|DOWNSTREAM - (ii) Supply of unbranded canned tuna to the food service sector                      |
|France                                        |[10-20]%                |[5-10]%                   |
|Spain**                                       |NA                      |NA                        |
|DOWNSTREAM - (iii) Distribution of canned tuna to consumers through retailers[42]                 |
|EEA-wide                                      |[20-30]%                |/                         |
|WW                                            |[5-10]%                 |/                         |
|Austria                                       |[20-30]%                |/                         |
|Croatia                                       |[20-30]%                |/                         |
|Malta                                         |[20-30]%                |/                         |
|Cyprus                                        |[30-40]%                |/                         |
|Czech Republic                                |[30-40]%                |/                         |
|Slovakia                                      |[30-40]%                |/                         |
|Italy                                         |[30-40]%                |/                         |
|Hungary                                       |[40-50]%                |/                         |
|Greece                                        |[40-50]%                |/                         |
|Slovenia                                      |[50-60]%                |/                         |
|* The Parties indicate that Bolton was only active in this market segment in Italy and that in any|
|case, since the beginning of 2013, Bolton no longer operates on this market.                      |
|** Bolton's sales to the food service sector in Spain amount to EUR […] and Tri Marine's amount to|
|approximately EUR […].                                                                            |

1 Vertical integration in the tuna value chain and role of traders

   50) The Parties claim that the Transaction does not give rise to any input or customer foreclosure concerns since their main competitors, such
       as Thai Union Food and Korean Dong Won, are large vertically integrated international players, which operate at every level  of  the  tuna
       value chain. As for non-integrated processors and suppliers of canned tuna, the Parties underline that in recent years traders  have  been
       playing a crucial role in the industry, by facilitating supplies to non-integrated tuna  processors  and  guaranteeing  access  to  inputs
       (round tuna and loins).

   51) The arguments made by the Parties in relation to vertical integration have been confirmed by the results of the market  investigation.  In
       particular, respondents confirmed that the industry has been undergoing a sustained process of vertical  integration  over  the  last  few
       years and that the industry is characterised by large spare capacity.[43]

   52) Furthermore, the market investigation confirmed the important role played by traders. Further details on the role of traders  in  ensuring
       access to raw material in the tuna value chain will be discussed in the analysis  of  potential  input  foreclosure  concerns  in  section
       5.2.2.1 below.

2 Markets for the supply of round tuna or tuna loins/Markets for the supply of canned tuna (to private  labels/brand  owners,  through  retailers
       and to the food service sector)

1 Input foreclosure

   53) The majority of respondents to the market investigation raised no concerns. A few respondents submitted that the Merged Entity would  have
       a strong market presence in the upstream markets for the supply of round tuna and tuna loins and would be in a position to restrict access
       to products or raise prices to its competitors downstream post-Transaction. Some made specific reference to the Merged Entity’s  allegedly
       strong market position in Yellowfin tuna.

   54) Tri Marine has a relatively strong presence in particular in the market for the supply of tuna loins ([30-40]% in the worldwide market for
       all tuna loins).[44] However, Tri Marine’s own production of tuna loins accounts for only [5-10]% of the global volumes of tuna loins  and
       of [5-10]% of the global volumes of tuna loins destined for the merchant market (thus excluding volumes used for captive production).  Tri
       Marine’s remaining tuna loins sales are based on its trading activity and not  on  its  own  production.  According  to  Tri  Marine,  its
       contractual relations with loin processing plants are non-exclusive and short-term meaning  that  loin  processors  (i.e.  canneries)  can
       switch to alternative purchasers. In 2012, [50-60]% of Tri Marine's sales of loins were made to Bolton.

   55) The Commission notes that several competitors will continue to be active in the supply of tuna loins  (including  Yellowfin  tuna  loins).
       These competitors include the trading companies FCF and Itochu of Japan with estimated market shares of [20-30]% and [0-5]%  in  loins  at
       worldwide level respectively. According to the Parties, the remaining market is highly fragmented between  several  small  operators  like
       General Tuna, Marbelize, Tecopesca, Unicord-Sea Value, Eurofish, TUF, Thon de Mascareignes, Wanainchi Marine Products, Actemsa, Commercial
       Pernas, Jais, Dragon Waves.

   56) Even though Tri Marine may currently be the largest supplier of tuna loins to the EEA,[45] given that the markets are  worldwide,  current
       EEA-customers of Tri Marine could start sourcing from several competitors, including traders such as FCF.

   57) Moreover, according to the Parties, Bolton's downstream competitors in the market for canned tuna can use both loins  and  round  tuna  as
       input to their production. The same applies to the branded manufacturers of canned tuna, who can either source  raw materials (i.e.  round
       tuna or loins) and internalize production, or buy directly the finished product (i.e. canned tuna) from other suppliers.

   58) The results of the market investigation confirmed that most canned tuna manufacturers can process both loins and round tuna. Moreover, the
       majority of the suppliers of canned tuna indicate that they can easily switch and  change  loin  suppliers  and  identified  a  number  of
       alternative suppliers to the Parties.

   59) The existence of at least a certain degree of input substitutability between round tuna and tuna loins for canned tuna manufacturers would
       suggest that an input foreclosure strategy in relation to loins might not yield benefits. In fact, suppliers of round tuna are  likely  to
       exert a certain degree of additional competitive pressure on the suppliers of loins, including Tri Marine. In this regard, the  Commission
       notes that Tri Marine has a more limited market share in the supply of round tuna ([20-30]% at the worldwide level and [5-10]% at the EEA-
       wide level) and would be constrained by other international players.

   60) The results of the market investigation confirmed the presence of a relatively large number of  potential  alternative  suppliers  to  the
       Merged Entity for round tuna which are essentially the same competitors as in the supply of tuna loins. In particular,  the  crucial  role
       played by traders in the supply of round tuna to non-integrated operators in the value chain was widely confirmed by the  results  of  the
       market investigation. The most important traders of round tuna competing with Tri Marine are FCF and Itochu with global market  shares  in
       the trading of round tuna to the canning industry of [20-30]% and [5-10]% respectively.

   61) The competing traders have a global reach, raw material is available in the short term because there are  generally  no  long-term  supply
       contracts and there are generally no quotas in place to restrict tuna fishing activities. In  the  course  of  the  market  investigation,
       competitors in the supply of round tuna, including FCF, indicated that they do not  anticipate  any  impact  of  the  transaction  on  the
       availability of round tuna.

   62) The Commission therefore finds that a price increase in tuna loins (or in round tuna) would likely be undercut by alternative producers of
       round tuna and tuna loins as well as by trading competitors who would continue to have access to both round tuna and tuna  loins  and  who
       could increase their trading volumes.

   63) Despite Tri Marine’s relatively strong position in the production of tuna loins, given the degree of substitutability between  round  tuna
       and tuna loins, the existence of alternative suppliers in the supply of round tuna and tuna loins, the role of competing traders, and  the
       fact that Bolton already sources [60-70]% of its external needs from Tri Marine and is therefore unlikely to be able  to  absorb  all  the
       volumes produced/traded by Tri Marine without significant capacity expansion, the  Commission  concludes  that  the  Merged  Entity  would
       unlikely be able to implement an input foreclose strategy vis-à-vis it competitors in the markets for the supply of canned tuna.

2 Customer foreclosure

   64) In view of the vertical relationship between the Parties' activities, the Commission has also analysed whether post-Transaction the Merged
       Entity could successfully implement a customer foreclosure strategy, whereby the Merged Entity would disrupt competition in the market for
       the supply of tuna loins by sourcing loins exclusively internally or by increasing the competitors’ cost to access downstream customers.

   65) The Commission notes that in the downstream markets for (i) the supply of unbranded canned tuna to private  labels/brand  owners  and  for
       (ii) the supply of canned tuna for food service sectors, Bolton is a small buyer since most  of  its  production  is  captive.  Therefore,
       Bolton is unlikely to be a crucial or significant customer in these two markets. However, it could be argued that in the downstream market
       for (iii) the distribution of canned tuna to consumers through retailers, Bolton has a significant market position in some countries (e.g.
       [50-60]% market share in Slovenia). Therefore, Bolton might represent a significant customer in this downstream market.

   66) However, the Commission has taken into account that Bolton and Tri Marine have had a close  business  relationship  including  significant
       sale purchase relations in tuna raw materials for many years. For example, in 2012, about [60-70]% of Bolton's requirement for  loins  was
       purchased from Tri Marine (and [50-60]% of Tri Marine's sales of loins were made to Bolton). Moreover Bolton only represents  [20-30]%  of
       the demand on the worldwide merchant market for loins. The Commission thus finds that the quantity of sales that could be  withdrawn  from
       Tri Marine's competitors is relatively small since Tri Marine is already Bolton's major supplier of tuna loins.

   67) Some operators acknowledged in the course of the market investigation that in the last few years Bolton has already  been  sourcing  loins
       predominantly from Tri Marine, and hence de facto the Transaction would not significantly alter  the  market  structure.[46]  Furthermore,
       none of the respondents raised any specific concern in relation to the likelihood of a customer foreclosure scenario.

   68) Therefore, the Commission concludes that the Merged Entity would unlikely be able to implement a customer foreclosure  strategy  vis-à-vis
       competitors in the market for the supply of tuna loins.

3 Market for the supply of canned tuna to private labels and brand owners/Market for the supply of canned tuna through retailers

1 Input foreclosure

   69) The Commission has analysed whether the Merged Entity might be in a position to restrict supply of canned tuna or raise prices  of  canned
       tuna for private labels and brand owners which compete with Bolton in the market for the supply of canned tuna  for  distribution  through
       the retail channel.

   70) At the EEA-wide level, the Merged Entity would not be a significant player in the market for the supply of canned tuna to  private  labels
       and brand owners (with a [5-10]% volume market share and a [5-10]% value market share).[47] The market investigation  confirmed  that  the
       majority of customers sources at a worldwide level[48] and that the majority of suppliers are willing to supply  customers  regardless  of
       their geographic location.[49] In addition, the respondents confirmed that traders also play a role in the supply of canned tuna  and  did
       not raise any specific concerns relation to the likelihood of an input foreclosure scenario in these markets. Therefore, the Merged Entity
       is unlikely to have a significant degree of market power in the upstream market and thus the  ability  to  implement  an  input  foreclose
       strategy.

   71) Therefore, the Commission concludes that the Merged Entity would unlikely be able to  implement  an  input  foreclose  strategy  vis-à-vis
       competitors in the markets for the supply of canned tuna through retailers.

2 Customer foreclosure

   72) In view of the fact that Bolton is a significant player on the downstream market for the supply of canned tuna  for  distribution  through
       the retail channel in a number of countries, the Commission has also analysed whether  the  Merged  Entity  would  be  in  a  position  to
       implement a customer foreclosure strategy.

   73) However, this scenario would seem unlikely because despite its strong market presence in certain countries, Bolton does not  represent  an
       important customer of canned tuna given that it produces most of its branded canned tuna captively. In fact, the  amount  of  canned  tuna
       purchased by Bolton for the subsequent sale through the retail channel accounts for less than [5-10]% of the  total  European  demand  for
       canned tuna. Following the business model adopted by all the major players active in this market,  Bolton  has  already  internalised  the
       production of canned tuna and relies on third-party suppliers of canned tuna only to a very limited extent.

   74) The market investigation confirmed that the majority of the suppliers of canned tuna to private labels/brand owners are  ready  to  supply
       any customers regardless of their geographic location. The same is true for customers of (unbranded) canned tuna, who in most cases source
       at worldwide level. This implies that even if post-Transaction Bolton were to stop sourcing (unbranded) canned tuna from third parties  or
       tried to increase the competitors’ cost to access customers, suppliers of canned tuna could easily access a broader customer base than the
       European one and easily find alternative customers.

   75) Finally, during the market investigation, no specific concerns were raised in  relation  to  the  likelihood  of  a  customer  foreclosure
       scenario in these markets.

   76) Therefore, the Commission concludes that the Merged Entity would unlikely be able to implement a  customer  foreclose  strategy  vis-à-vis
       competitors in the market for the supply of canned tuna to private labels/brand owners.

4 Conclusion on the competitive assessment

   77) Therefore the Commission concludes that the Transaction is not likely to raise serious doubts as to its compatibility  with  the  internal
       market in relation to the vertically affected markets.

       CONCLUSION

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

                                        For the Commission

                                        (signed)
                                        Joaquín ALMUNIA
                                        Vice-President
-----------------------
[1]   OJ L 24, 29.1.2004, p. 1. 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]   Publication in the Official Journal of the European Union No C 326, 12.11.2013, p.7.

[3]   The seven Tri Marine group entities are (i) Tri Oceanic Overseas Holdings LLC, (ii) Tri Marine Management Company, (iii)  Tri  Marine  Fish
      Co, (iv) The Tuna Store, LLC, (v) CFH GP, LLC, and (vi)  Cape  Fisheries  Holdings,  LP,  (vii)  Tri  Marine  International  (PTE)  Limited
      Singapore.

[4]   Bolton will acquire a […]% interest directly. Bolton will acquire the remaining […]% indirectly through its […]% shareholding  in  CFH  GP,
      LLC, which holds a […]% interest in Cape Fisheries Holdings, LP.

[5]   OJ C95, 16.04.2008, p1.

[6]   Clause 8 of the Umbrella Agreement, Annex 3 to the Form CO.

[7]   Paragraphs 65ff JN.

[8]   Given that Mr Curto is a natural person without any economic activities other than his interests in the Tri-Marine target companies  he  is
      not considered an undertaking concerned and a notifying party under the Merger Regulation. Paragraph 12 JN; see similarly case  COMP/M.3762
      – Apax/Travelex, Commission decision of 16 June 2005, paragraph 6, and Case COMP/M.6411 – Advent/Maxam,  Commission decision of 6  February
      2012, paragraphs 6 and 7.

[9]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the JN.

[10]  Bolton: EUR […]; Tri Marine group: EUR […].

[11]  Bolton: EUR […]; Tri Marine group: EUR  […].

[12]  Bolton: EUR […]; Tri Marine group: EUR […].

[13]  Bolton: EUR […]; Tri Marine group: EUR […].

[14]  Bolton: EUR […]; Tri Marine group: EUR […].

[15]  Pelagic fishes swim in shoals close to the surface of coastal waters and often travel long distances. Sardines, squids, anchovies,  herring
      and mackerels are types of pelagic fish.

[16]  Traders help vessel operators with the financial and  administrative  burdens  associated  with  marketing  their  catch  and  ensure  that
      processors have continued access to large volumes of raw material.

[17]  Round tuna refers to tuna not subjected to any transformation except for chopping and freezing.

[18]  A substantial volume of loins is intended for the captive supply of vertically integrated companies which,  through  their  own  processing
      plants, convert the round fish into loins in situ or in canneries located in the destination markets. It is a relatively common practice of
      the EU and United States’ tuna industry to carry out all the processing stages, including loining, as close as possible to the fish landing
      areas in the developing countries, and then to export the semi-processed product (frozen pre-cooked tuna loins for canning) to canneries in
      developed countries.

[19]  The Parties explain that the canning process illustrated is used by market operators representing 90% of the total  market.  The  remaining
      10%, mainly located in Brazil and France, does not cook seafood before canning it.

[20]  In Europe, Bolton sells canned tuna under the Rio Mare, Saupiquet, Palmera and Calvo brands.

[21]  See reply of the Parties to the request for information dated 21 November 2013.

[22]  The Parties acknowledge that the supply of canned tuna to the food services sector could represent a separate market from  the  market  for
      the supply of canned tuna to retailers. On the demand side, the configuration and pack sizes demanded by  customers  in  the  food  service
      sector are likely to be different from those demanded by retailers.

[23]  The Parties acknowledge that canneries process mainly certain tuna species, such as Yellowfin and Skipjack.  However,  such  preference  is
      simply driven by the large availability of these two species as compared to other species (the two species together represent approximately
      82% of the worldwide tuna catches).

[24]  A purse seiner is a net set vertically in the water. When a school of tuna is sighted, the purse seiner vessel  encircles  the  school  and
      traps it by closing the net.

[25]  A pole and line consists of a hooked line attached to a pole. On pole and line vessels, fishermen  stand  on  vessels  and  fish  with  the
      poles.

[26]  See replies to question 11 of questionnaire Q1 (Supply chain operators).

[27]  Only [0-5]% of Tri Marine's catches are addressed to the fresh market. Bolton is not active at all in the  supply  of  round  tuna  to  the
      fresh market. Hence, this decision will only consider the narrower segment of supply of round tuna to the canning industry.

[28]  The Parties refer to the decision of 6 September 2012 in case C11589 – Bolton Group International/Luis Calvo Sanz, where  the  Italian  NCA
      established that branded and unbranded canned tuna belongs to the same product market.

[29]  See replies to question 32 of questionnaire Q1 (Supply chain operators),  question  9  of  questionnaire  Q2(Retail)  and  question  11  of
      questionnaire Q3(Food service).

[30]  The Parties refer to the decision of 20 December 2007 in case C8971 - Bolton Alimentari/Rami d’azienda di brands,  where  the  Italian  NCA
      established that oil free tuna, oil tuna, tuna salad and tuna fillets belong to the same market.

[31]  29 of questionnaire Q1 (Supply chain operators).

[32]  The largest tuna loin suppliers of the EU are Ecuador, Thailand, Mauritius,  El  Salvador/Guatemala  and  Papua  New  Guinea.  35%  of  EEA
      supplies of tuna loins originate in Ecuador.

[33]  Internal EU production represents around 40% of EU estimated consumption of canned and preserved tuna.

[34]  See OFT decision CR/46/10 - Thai Union Frozen Products /MW Brands Holdings and the Italian NCA decision C11589 - Bolton/Calvo.

[35]  The Parties refer to the decision in case COMP/M.6813 - McCain Foods Group/Lutosa Business. In the decision,  the  Commission  argued  that
      the market for the supply of potato products to quick service restaurants is EEA wide since, from  the  supply  side,  these  products  are
      homogeneous and do not differ in taste or quality from country to country and, from the demand side, customers  purchase  them  by  way  of
      global tenders.

[36]  The investigation conducted by the OFT in case CR/46/10 - Thai Union Frozen Products /MW Brands  Holdings,  demonstrated  that  “for  those
      products where the end-consumer does not see the brand (for example where tuna is an input to a ready-meal or sandwich),” branding  is  not
      important.

[37]  Unless differently specified, value market shares are used which are generally higher than the volume market shares.

[38]  Bolton has a limited production of loins outside the EEA. In the EEA, its production of loins is only for captive purposes.

[39]  Unless differently specified, value market shares are used which are generally higher than the volume market shares.

[40]  Market shares include both branded and private label products and are provided on a national basis only when they exceed 25%.

[41]  See Minutes of the conference call with FCF of 20 November 2013.

[42]  Given that a concern was raised in respect of Yellowfin tuna specifically, it is worth noting that Tri Marine's position in Yellowfin  tuna
      loins is weaker than when considering all tuna species together with a market share of [10-20]% at worldwide level.

[43]  With a market share of [40-50]% of the supply of tuna loins to customers in the EEA.

[44]  See Minutes of the conference call with Frinsa of 18 November 2013, and Minutes of the conference call with FCF of 20 November 2013.

[45]  Tri Marine would have the following (volume) market shares: [0-5]% in Spain; [0-5]% in France; [5-10]% in Belgium; [5-10]% in Germany;  [0-
      5]% in Poland. For this market reference is made to volume market shares rather than value market shares, because the volume market  shares
      are higher than the value market shares.

[46]  See replies to questionnaire 11 of Q2 (retailers).

[47]  See replies to questionnaire 47 of Q1 (supply chain operators).

-----------------------
 In the published version of this decision, some information has  been  omitted  pursuant  to  Article  17(2)  of  Council  Regulation  (EC)  No
 139/2004[pic]!*+12<>?ABEFG^_`abcdefh}?‘õñíñçáÛáÓÅÓÁ¸©ž©?~©žrlclrZQHh¸\h4&@ˆýÿhÏ+h¸\aJh¸\5?>*[pic]aJh(j¥h¸\aJh¸\aJh(j¥h¸\5?>*[pic]aJj(:h?m€h¸\U[pic]
 mHsH jh?m€h¸\U[pic]mHnHu[pic]h?m€ concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown
 thus […]. Where possible the information omitted has been replaced by ranges of figures or a general description.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE