27.5.2014

Official Journal of the European Union

C 160/6

Opinion of the Advisory Committee on mergers given at its meeting of 25 April 2012 regarding a draft decision relating to Case M.6286 Südzucker ED&F Man

Rapporteur: Spain

(2014/C 160/06)

1.	The Advisory Committee agrees with the Commission that the notified operation constitutes a concentration within the meaning of the Council Regulation (EC) No 139/2004.

2.	The Advisory Committee agrees with the Commission that the notified operation has a community dimension within the meaning of the Regulation (EC) No 139/2004.

The Advisory Committee agrees with the Commission that, for the purpose of assessing the present operation, the definitions of the relevant product markets are:

(a)	separate markets for (1) the supply of white sugar to industrial processors and (2) for the supply of white sugar to retailers;

(b)	separate market for supply of raw cane sugar and for the supply of sugar beet, whereas within the supply of raw cane sugar a further distinction between preferential raw cane sugar and non-preferential raw cane sugar can be left open in this case;

(c)	market for molasses, whereas a further distinction between beet molasses and cane molasses can be left open in this case;

(d)	market for bioethanol, whereas it is not necessary to conclude on the exact product market definition in this case;

(e)	market for biofuel, whereas it is not necessary to conclude on the exact product market definition in this case;

(f)	market for feedstuff, whereas it is not necessary to conclude on the exact product market definition in this case;

(g)	market for vinasses, whereas it is not necessary to conclude on the exact product market definition in this case.

The Advisory Committee agrees with the Commission that, for the purpose of assessing the present operation, the definitions of the relevant geographic markets are:

(a)	national-wide for (1) the supply of white sugar to industrial processors and (2) for the supply of white sugar to retailers in Italy;

(b)	national-wide for the supply of white sugar to industrial processors and for the supply of white sugar to retailers in Greece; whereas it is not necessary to conclude on the exact geographic definition in this case;

(c)

covering at least the African, Caribbean and Pacific countries (ACP) and the Least Developed Countries (LDC) countries and could also comprise the main countries providing raw cane sugar under CXL (part of the GATT agreement) and exceptional Tariff Rate Quotas (‘TRQ’) with regard to the supply of preferential raw cane sugar; whereas it is not necessary to conclude on the exact geographic definition in this case;

(d)	EEA-wide or national for the supply of molasses whereas it is not necessary to conclude on the exact geographic market definition in this case;

(e)	EEA-wide for bioethanol, biofuel, feedstuff and vinasses whereas it is not necessary to conclude on the exact geographic market definition in this case.

5.	The Advisory Committee agrees with the Commission that the proposed concentration is likely to result in a significant impediment to effective competition in the internal market or in a substantial part of it on the market for the supply of white sugar to industrial processors in Italy.

The Advisory Committee agrees with the Commission that the proposed concentration is not likely to result in a significant impediment to effective competition in the internal market or in a substantial part of it on the following markets:

(a)	all markets for the supply of white sugar to industrial processors other than that mentioned in the previous question 5;

(b)	all markets for the supply of white sugar to retailers;

(c)	all the markets for the supply of raw cane sugar into the EU;

(d)	all markets for the supply of molasses;

(e)	all markets for biotethanol;

(f)	all markets for biofuel;

(g)	all markets for feedstuff;

(h)	all markets for vinasses.

7.	The Advisory Committee agrees with the Commission that the commitments are sufficient to remove the significant impediments to competition on the market for the supply of white sugar to industrial processors in Italy.

The Advisory Committee agrees with the Commission that, subject to full compliance with the commitments offered by the parties, and considered all commitments together, the proposed concentration does not significantly impede effective competition in the internal market or in a substantial part of it.

9.	The Advisory Committee asks the Commission to take into account all the other points raised during the discussion.

10.	The Advisory Committee agrees with the Commission’s view that the notified concentration should be declared compatible with the internal market and the EEA Agreement in accordance with Articles 2(2) and 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.

27.5.2014

Official Journal of the European Union

C 160/8

Final Report of the Hearing Officer (1)

Südzucker/ED&F Man

(M.6286)

(2014/C 160/07)

1. BACKGROUND

On 19 September 2011, the European Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (2) (the ‘Merger Regulation’) by which Südzucker Holding GmbH, controlled by Südzucker Mannheim/Ochsenfurt (the ‘Notifying Party’) acquires control, within the meaning of Article 3(1)(b) of the Merger Regulation, of ED&F Man Holding Limited (‘EDFM’), by way of purchase of shares. (The Notifying Party and EDFM are referred to as ‘the parties’).

2. WRITTEN PROCEDURE

During the first phase, the Commission raised serious doubts as to the compatibility of the operation with the internal market. Accordingly, on 9 November 2011, the Commission decided to initiate proceedings pursuant to Article 6(1)(c) of the Merger Regulation.

On 24 January 2012, the parties submitted formal commitments to divest all the shares held by EDFM in a refinery in Brindisi, Italy (‘SRB’), which is a 50/50 joint venture with Società Fondiaria Industriale Romagnola S.p.A. (‘SFIR’), and to transfer to SRB three existing contracts for the supply of raw cane sugar. The parties also committed, in case of a failure to transfer the contracts, to supply or procure to supply SRB with the contract volumes of raw cane sugar at reasonable prevailing market rates, in line with industry wide practices. Further to the market test, the Commission took the view that the proposed commitments would not entirely eliminate the competition concerns identified, and proceeded to the adoption of a Statement of Objections (‘SO’).

The SO was sent to the Notifying Party on 14 February 2012. The deadline to reply was 28 February 2012.

In the SO, the Commission’s preliminary findings indicated that the notified concentration would result in the creation of a dominant position on the market for the supply of white sugar to industrial processors in Italy. On the remedies, the SO found that there was a significant risk of failure in the transfer of the raw sugar cane contracts, and that the alternative remedy proposed by EDFM was insufficient to guarantee the viability of SRB.

On 28 February 2012, the parties submitted joint written comments on the SO and requested a formal oral hearing. In addition, EDFM submitted separate comments on certain documents in the Commission’s file concerning SRB, to which EDFM was granted access (3) and which were confidential vis-à-vis the Notifying Party.

Access to file

The Notifying Party was given access to the file on 15 February 2012. Requests for additional access to the file were submitted by the parties on 20, 21 and 23 February 2012.

All the parties’ requests for additional access to the file have been dealt with by the Directorate-General for Competition. As I did not receive any complaint from the parties, I consider that their procedural rights in respect of access to the file have been observed.

Interested third persons

On 21 February 2012, I accepted a request from SFIR to be heard as interested third person pursuant to Article 18(4) of the Merger Regulation. SFIR demonstrated sufficient interest in the proceedings given that the remedies proposed by EDFM are likely to affect its competitive position on the relevant market and that SFIR has made a number of written submissions in the course of the procedure. On 29 February 2012, following the parties’ request for a formal oral hearing, I communicated to SFIR my decision to allow it to express its views at the formal oral hearing.

3. ORAL PROCEDURE

Request for closed session

10.

On 1 March 2012, the parties requested a closed session regarding certain parts of their presentations dealing with the impact of the transaction on the Italian market and the remedies, on the ground that market participants would have access to sensitive information.

11.

I rejected this request for the following reasons. First, I informed the parties that the only interested third person attending the formal oral hearing was SFIR. Second, the parties’ argument that competitors should not have access to the information on the parties’ respective positions on the relevant market, is an argument which could equally be made for any formal oral hearing in any merger case. If accepted, it would thus deprive Article 13 of Decision 2011/695/EU of its meaning. Third, as EDFM’s joint venture partner in SRB, SFIR was party to EDFM’s commercial information regarding the supply of sugar in Italy. Thus, I found no reason why SFIR should not have access to any of the Notifying Party’s information which could be discussed in the presence of EDFM. Moreover, regarding the remedies proposal, SFIR was aware of the content, having been granted access to a nearly un-redacted version. Finally, both SFIR and EDFM are parties to the main contract covered by the remedies (the ‘Mitra’ contract).

The formal oral hearing

12.

The formal oral hearing was held on 5 March 2012 in Brussels and was attended by: the Notifying Party and its legal advisors; EDFM and its legal and economic advisors; the interested third party and its legal advisors; the relevant Commission services and the representatives of six national competition authorities, i.e. the Belgian, German, Spanish, Italian, Finnish and Swedish competition authorities.

13.

No incident occurred during the formal oral hearing.

4. PROCEDURE AFTER THE FORMAL ORAL HEARING

Additional submissions of the parties

14.

On 12 March 2012 the parties submitted further comments following the discussions at the formal oral hearing.

Letter of facts

15.

On 14 March 2012, the Commission sent to the parties a letter of facts setting out additional elements in support of the Commission’s objections in the final decision. The parties were given until 16 March 2012 to provide their written comments. The parties responded on 19 March 2012.

Commitments

16.

On 16 March 2012, the parties submitted a set of improved commitments to address the concerns that were highlighted in the SO. These consist in the divestment of all the shares held by EDFM in SRB and the transfer of the economic benefit of the three existing contracts for the supply of raw cane sugar. The parties also committed that, should EDFM fail to transfer the economic benefit of the Mitra contract, it will supply or procure to supply SRB with volumes of preferential raw cane sugar on the same terms and conditions of this contract; whereas concerning the two remaining contracts, EDFM will supply or procure to supply SRB with the respective volumes of preferential raw cane sugar at reasonable prevailing market rates in line with industry wide practices. The remedy package includes additional measures, such as the specification of certain purchaser requirements and the introduction of a fast-track arbitration clause.

17.

The market test for these improved remedies was launched on 20 March 2012. The Commission concluded that the commitments proposed by the parties on 16 March 2012 sufficiently addressed all the remaining concerns regarding the compatibility of the proposed transaction with the internal market.

5. THE DRAFT DECISION

18.

Pursuant to Article 16(1) of Decision 2011/695/EU, the Final Report shall consider whether the draft decision deals only with objections in respect of which the parties have been afforded the opportunity of making known their views.

19.

Upon review of the draft decision, I conclude that it does not deal with any objection in respect of which the Notifying Parties have not been afforded the opportunity of making known their views.

6. CONCLUDING REMARKS

20.

I conclude that that all participants in the proceedings have been able to effectively exercise their procedural rights in this case.

Brussels, 2 May 2012.

Wouter WILS

(1) Pursuant to Articles 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29) (‘Decision 2011/695/EU’).

(2) Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ L 24, 29.1.2004, p. 1).

(3) See Article 18(3) of the Merger Regulation and Article 17(2) of the Merger Implementing Regulation.

27.5.2014

Official Journal of the European Union

C 160/11

Summary of Commission Decision

of 16 May 2012

declaring a concentration compatible with the internal market and the functioning of the EEA Agreement

(Case M.6286 — Südzucker/ED & F MAN)

(notified under document C(2012) 3145 final)

(Only the English text is authentic)

(Text with EEA relevance)

(2014/C 160/08)

On 16 May 2012 the Commission adopted a Decision in a merger case under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (1) , and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision can be found in the authentic language of the case on the website of the Directorate-General for Competition, at the following address: http://ec.europa.eu/comm/competition/index_en.html

I. THE PARTIES

(1)

Südzucker, the notifying party, is a German food company active in the areas of sugar production and marketing, food additives, frozen food, portioned food articles, bioethanol production and fruit juices concentrates and preparations. The sugar segment covers white sugar production from beet as well as the refining of raw cane sugar and marketing of sugar and by-products. Südzucker produces sugar in 29 beet sugar factories and three refineries in Germany, Belgium, Bosnia-Herzegovina, France, Poland, Austria, Slovakia, the Czech Republic, Hungary, Moldova and Romania.

(2)

ED & F Man (‘EDFM’) is primarily a commodity trading company. Its product portfolio comprises sugar, liquid by-products of sugar production such as molasses (liquid-products segment), coffee, tropical oils and biofuels.

(3)

Südzucker and EDFM are designated hereinafter as the ‘Parties’ while Südzucker is the ‘notifying party’.

II. THE OPERATION

(4)

On 19 September 2011, the Commission received a formal notification pursuant to Article 4 of the Merger Regulation by which Südzucker would acquire 24,99 % of EDFM’s share capital (the ‘proposed transaction’).

(5)

Pursuant to paragraph 54 to 57 of the Jurisdictional Notice sole control may be acquired de jure by a minority shareholder if it obtains the ability to exercise decisive influence over the other undertaking’s strategic commercial behaviour. The Subscription Agreement and the Articles of Association grant Südzucker special veto rights over strategic decisions, in particular over the annual budget, business plan and appointment of directors. Therefore, the proposed transaction would confer to Südzucker sole control over EDFM.

(6)

The proposed transaction thus constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

III. SUMMARY

(7)

Based on its investigation in phase I, the Commission raised serious doubts as to the compatibility of the proposed transaction with the internal market and adopted a decision to initiate proceedings pursuant to Article 6(1)(c) of the Merger Regulation on 9 November 2011.

(8)

On 14 February 2012, the Commission adopted a Statement of Objections (‘SO’) pursuant to Article 18 of the Merger Regulation. On 28 February 2012, Südzucker responded to the Statement of Objections.

(9)

On 5 March 2012, an Oral Hearing providing the possibility for the notifying party to exercise its right of defence took place. SFIR, as a third party, also attended the Oral Hearing.

(10)

On 24 January 2012, Südzucker offered a first set of commitments. Following the Statement of Objections and the results of the market test, commitments were modified and an updated version of the commitments was submitted to the Commission on 16 March 2012. On 30 March 2012, the Parties offered certain clarifications and improvements in the final set of commitments.

(11)

Therefore, on 16 May 2012 the Commission adopted a conditional clearance decision pursuant to Article 8(2) of the Merger Regulation.

IV. EXPLANATORY MEMORANDUM

(12)

Südzucker is the largest European sugar producer and EDFM is the second largest sugar trader worldwide. EDFM is also active in the production of sugar in Europe via two refineries; the Brindisi refinery in the South of Italy, a joint-venture with SFIR and the DAI refinery in Coruche (Portugal). Their activities overlap or may overlap in the following categories: (i) the supply of white sugar in Italy and Greece, (ii) the supply of preferential raw cane sugar in the EEA, and (iii) the supply of molasses in several Member States, mainly in Central Europe.

(13)

Irrespective of the precise market delineation, the proposed transaction does not raise competition concerns in the supply of preferential raw cane sugar, molasses, and supply of white sugar in Greece. However, the proposed transaction raised competition concerns in the supply of white sugar in Italy.

A. The relevant product markets

Introduction to the sugar industry

(14)

Sugar (the proper term being sucrose) is the most common sweetener. It can be found in many natural foods (e.g. fruits and vegetables) but can only be extracted from sugar beet, which is grown in Europe and elsewhere and processed into sugar locally, or from sugar cane which is grown in more tropical climates.

(15)

Currently, 80 % of world sugar production is based on cane. While most of the sugar consumed in the EU is still beet sugar. However, since the 2006 EU sugar regime reform a bigger percentage of EU production is based on raw cane sugar.

(16)

The supply of sugar is regulated by the Common Market Organisation whose principles are set up in Regulation (EC) No 1234/2007. The sugar regime was established in 1967 to ensure a fair income to Community producers and to stabilise the market. EU producers could sell sugar at guaranteed prices, i.e. intervention prices which in the period 1996-2006 were significantly higher than the world market price. Production quota distributed amongst Member States kept the overall production within certain limits. Import levies were applied on external production and sugar surpluses were exported subsidised with export refunds.

(17)

Following a negative WTO ruling condemning in particular the export subsidies, the sugar regime was reformed in 2006 in order to increase the competitiveness in the sugar sector, stabilise the markets, guarantee the availability of sugar supplies and improve the market orientation of the sector by reducing some of the regulatory barriers.

(18)

The main features of the 2006 sugar reform were: (i) significant reduction of the overall European sugar beet production through massive quota renunciation, (ii) abolition of intervention prices (iii) tariff-free market access for the Least Developed Countries (‘LDC’) and for the African, Caribbean, Pacific (‘ACP’) countries as from 1 October 2009 on, (iv) suspension of export refunds for sugar as from September 2008, (v) only limited out-of-quota exports permitted, and (vi) establishment of a temporary restructuring fund to fund compensatory payments for voluntary production quota renunciations.

(19)

The quota renouncements led to a significant reduction of the number of Member States producing sugar thereby resulting in increased EU-wide trade and competition across borders. Furthermore, a large number of EU Member States, including Italy, have become EU sugar deficit countries with consumption exceeding domestic beet production.

(20)

Since the reform of the EU sugar industry was initiated from 2006/07 onwards, it was expected that EU domestic demand of approximately 16,7-17,1 million tonnes per annum would be covered by Member State beet quota sugar production of 13,3 million tonnes, with the remainder covered by imported sugar from traditional preferential trade partners. However, between then and now this has not been the case notably because expected imports from LDC/ACP-countries have been below the Commission’s expectations, with the result that quota stock levels have progressively fallen.

(21)

At the moment, raw cane sugar for refining may be imported into the EU from third countries under the following customs schemes: (i) Sugar imports from ACP/LCP countries (Everything But Arms initiative and Economic Partnership Agreements), (ii) CXL quotas, (iii) exceptional tariff rate quotas (TRQs), and (iv) other sugar import custom schemes.

(22)

The access to raw cane sugar from ACP/LDC countries or under CXL quotas is crucial and strategic for EU sugar producers since it is the only raw cane sugar that can be imported without prohibitive duties and quantities into the EU. However, in 2010, only 2,55 million tonnes of preferential raw cane sugar (including raw sugar from ACP/LDC countries and raw sugar under CXL quotas) were imported into the EEA. This is less than what was necessary to close the gap with European demand.

(23)

Furthermore, the 2006 sugar reform has led to a reduction of the number of players, thus reinforcing the pre-existing concentration trend in the EU sugar sector. The EU leading sugar producers trend towards vertical and horizontal integrations is still present on the market.

Market definition for white sugar

(24)

With respect to the relevant product market, the market investigation confirmed in respect of Italy previous Commission decisions defining separate product markets for the supply of white sugar to industrial processors and the market for the supply of white sugar to retailers.

(25)

The market investigation revealed that switching production from white sugar sold to industrial processors to white sugar sold to retailers may not be economically viable as claimed by the notifying party since this may require significant investments and would also imply the risk of losing customers. From a demand side perspective there is also limited substitutability between products sold to retail and industrial customers.

(26)

In relation to the relevant geographic market, contrary to what the notifying party submitted, the market investigation confirmed that the geographic market for the supply of white sugar is national. Customers and competitor across Italy confirmed both previous Commission’s decisions and national competition authorities’ decisions.

(27)

On the demand side, (i) industrial customers in the vast majority of cases buy from suppliers based in Italy, have national contracts and do not source directly from abroad; (ii) the few large players which do buy transnationally from trans-European players have to pay ‘Italian’ prices for their Italian purchases; (iii) industrial customers buy nationally, because security and regularity of supply and thus closeness to storage facilities are crucial factors for industrial processors and retailers; and (iv) while customers multisource they rarely switch their main supplier. These demand-side characteristics mean that suppliers who want to compete successfully in the overall market for industrial customers in Italy need to have access to an established customer base, possess a developed distribution and logistics network and dispose of good knowledge of local and national market conditions.

(28)

On the supply-side, (i) producers of beet sugar in Italy are constrained by non-tradable fixed production quotas which are set on a national basis; (ii) the large quantity of imports in Italy is the direct consequence of the quota system which limits beet sugar production in Italy and does not as such indicate competitive pressure exercised upon Italian producers by foreign players; (iii) foreign producers operate in Italy mainly through joint ventures with well-established Italian players; this tends to show that the Italian market has characteristics distinct from other markets in Europe; otherwise the big European producers would simply sell directly into Italy and not engage in joint venture agreements which force them to share profits; (iv) in recent years Südzucker’s strategy in Italy has been to compete with low prices and thus markedly different from its strategy in Germany or France where it maintained high prices; in a market wider than national transnational arbitrage would have defeated such separate strategies; (v) internal documents of the Parties indicate national marketing strategies per Member State; (vi) internal documents of the Parties indicate sales programs and price-setting at a national level; (vii) market boundaries along national borders are both reflected and reinforced by non-compete clauses based on Italy as reference territory in joint-venture agreements; and (viii) a submission by the Bundeskartellamt also points towards national market definition for Germany, with arguments which are similarly relevant and coherent for the Italian market.

(29)

In addition, price differences between Italy and Germany/France are not arbitraged away as should be expected to happen in the same geographic market and significant divergences in market shares from one Member State to another, even when those Member States are neighbouring, point towards the existence of national markets because of national supply and production strategies.

Raw cane sugar

(30)

The supply of raw cane sugar is an upstream market to the production and supply of white sugar in the EU. Both Parties are active in the supply/delivery of raw cane sugar to European refineries (upstream) and in the production and supply of white sugar into the EEA (downstream).

Market definition for preferential raw cane sugar

(31)

In line with the findings in the ABF/Azucarera decision (Case COMP/M.5449), it was considered that the supply of raw cane sugar represents a separate relevant product market to be distinguished from the one for sugar beet. However, it cannot be excluded that a further distinction should be made between preferential raw cane sugar (including raw cane sugar from ACP/LDC countries, CXL and TRQ quotas and schemes) and other schemes.

(32)

With regard to the relevant geographic market, the market for the procurement of preferential raw cane sugar covers at least the ACP/LDC countries and could also comprise the main countries providing raw cane sugar under CXL and TRQ preferential quotas and duties such as Brazil, Cuba and Australia. However, the question whether the market could be even wider – eventually worldwide – can be left open as in any event the proposed transaction does not raise serious doubts irrespectively of the exact scope of the relevant geographic market.

Molasses

(33)

Molasses is a by-product of the sugar refining process, and is not subject to a regulatory regime. There are two types of molasses, derived from either sugar cane processing (cane molasses) or sugar beet processing (beet molasses).

Market definition for molasses

(34)

The market investigation did not confirm the argumentation of the Parties that the relevant product market for molasses encompasses the supply of both beet and cane molasses, irrespective of the end-use application. However, the question of whether the market for molasses has to be further delineated can be left open as no competition concerns would arise irrespective of the precise market definition.

(35)

In relation to the relevant geographic market, the notifying party is of the opinion that the market for molasses is at least EEA-wide. The market investigation was not conclusive with respect to the geographical scope of the market. Although it provided some indications that the market could — at least for beet molasses — be narrower than the EEA-wide scope as submitted by the notifying party, it also clearly shows that, from a customer perspective, national borders are not relevant when looking for supplies. However, while the market investigation showed that the market may be EEA wide, for the purpose of the decision, the question of the precise scope of the geographic market definition for molasses can be left open as no competition concerns would arise irrespective of the market definition retained (i.e. EEA-wide markets or national).

B. Competitive assessment

Introduction

(36)

The Commission carried out a thorough investigation as to the structure and the functioning of the supply of white sugar markets, the supply of raw cane sugar and the supply of molasses concerned by the proposed transaction. As a result, the Commission found that the proposed transaction is likely to result in a significant impediment of effective competition through non-coordinated effects and creation of dominant position in the market for the supply of white sugar to industrial processors in Italy.

1. Supply of white sugar

Italy

(i) Supply of white sugar to industrial processors

Structure of the market

(37)

Südzucker is the most important player on the Italian market for the supply of white sugar to industrial processors. EDFM controls jointly with SFIR the sales of white sugar from the Brindisi refinery to industrial processors which is also an important player on the same product market in Italy.

(38)

Moreover, Südzucker and EDFM are geographically close competitors. Contrary to their competitors, they both have storage facilities and make sales of white sugar to industrial processors and to retailers in the whole territory of Italy.

(39)

Following the proposed transaction, the Parties would have high combined market shares of at least [50-60] % in the market for sales of white sugar to industrial processors in Italy with a significant increment added (conservatively estimated at [10-20] %).

(40)

Therefore, in an already concentrated industry, further consolidation takes place which further eliminates competition between two close competitors and creates a market leader unmatched by its competitors.

Capacity constraints

(41)

The proposed transaction would bring together the two most dynamic and fastest growing players in Italy. Südzucker and EDFM are the two competitors that can most easily adapt their quantities/sales in the Italian market.

(42)

Post transaction, Südzucker and EDFM would have the incentive and the ability to withdraw quantities and raise prices in Italy.

(43)

Moreover, the market investigation demonstrated that notwithstanding the fact that some market players are well established in terms of infrastructure, customer relationships or specific partnership with a sugar supplier, competitors would have limited ability, but no incentive and no intention to increase supply in case of price increase on the Italian white sugar market.

(44)

It was concluded that competitors, established in Italy or outside Italy, face capacity constraints and therefore are unlikely to increase supply if prices increase, and therefore to counteract such market behaviour by the post-merger entity as explained above.

Countervailing buying power

(45)

On the basis of the facts that the Italian sugar market is a deficit country and the Italian sugar prices are high as compared to the sugar prices in other Member States of the EU, the security of supply is crucial for the customers in terms of both quantity and quality.

(46)

The market investigation showed that Italian sugar customers do not consider themselves to detain important buyer power vis-à-vis their sugar suppliers and are not likely to have possibilities of switching sugar suppliers.

(47)

Therefore, it was concluded that no countervailing buyer power can be attributed to Italian sugar customers in the relationship with their sugar suppliers and they do not constitute in this sense competitive pressure on the Italian sugar producers/suppliers including the Parties.

Entry unlikely to occur

(48)

The market investigation did not confirm the notifying party’s view that there are no relevant barriers to enter this market.

(49)

Competitors claimed that the Italian market is characterised by relatively high market entry barriers, the access to input being the main market entry barrier in a deficit market environment. The market investigation also confirmed that the sugar market necessitates local knowledge, distribution channels and high investments costs.

(50)

Moreover, the market investigation did not reveal any entity interested in entering the market for supply of white sugar to industrial processors in Italy. To the contrary, the Italian white sugar market is rather characterised by market exits due to scarcity of essential input.

(51)

Therefore, it was concluded that entry in the relevant market is not likely and timely.

(ii) Supply of white sugar to retailers

(52)

The Parties’ combined market shares remain below [30-40] % in the market for the supply of white sugar to retailers.

(53)

The market investigation demonstrated that the proposed transaction does not significantly impede effective competition in the market for the supply of white sugar to retailers in Italy.

Greece

(54)

The market investigation confirmed that EDFM has no sales of white sugar in Greece. With respect to the likelihood that EDFM could have constituted a potential competitor in Greece, there is no evidence at all that EDFM is likely to enter the Greek white sugar market in the near future.

2. Supply of preferential raw cane sugar

(55)

Despite the genuine scarcity of preferential raw cane sugar available for the EEA and despite the fact that EDFM is an important independent player on this market, the proposed transaction is unlikely to have an impact on the other players given (i) the low quantities and percentage of Parties’ preferential raw cane sugar currently delivered to third Parties, (ii) the presence of a wide number of already vertically integrated players, (iii) the decreasing role of EDFM as an -independent trader over the last years (iv) the presence of alternative well-establish traders, in particular for the supply of CXL sugar that could readily replace EDFM in case it would stop supplying its current quantities to third party refineries and (v) the potentially low demand from Südzucker in DFQF (duty-free-quota-free) raw cane sugar for its refineries.

(56)

Therefore, it is concluded that the merged entity will have neither the ability nor the incentive to foreclose access to preferential raw cane sugar input to its competitors in the downstream market for the production of white sugar. In addition, given the high percentage of Parties’ captive sales and the scarcity of preferential raw cane sugar, the merged entity will have neither the incentive nor the ability to foreclose access to EEA customers of preferential raw cane sugar.

3. Supply of molasses

(57)

The Parties’ activities overlap with respect to the supply of molasses to both fermentation and farmers/animal feed customers. Depending on the geographic market definition, affected markets would arise at both the EEA and national levels.

(58)

Should the market be defined as EEA-wide, the combined entity will hold a market share of [30-40] % on the overall molasses market (i.e. comprising beet and cane molasses) for all applications. In case the market was to be delineated according to the molasses application, the proposed transaction thus brings no important change to the market structure for the highly volatile demand for molasses in animal feed. With respect to the supply of molasses to the fermentation industry, the post-merger entity will have a combined market share of around [40-50] % (Südzucker [20-30] % and EDFM [10-20] %). However, no substantiated concerns were expressed with respect to the impact of the proposed transaction for fermentation customers during the market investigation.

(59)

In Austria, the Parties’ activities overlap only with respect to the supply of molasses to compound feed producers. During the market investigation, compound feed manufacturers indicated that the proposed transaction will not affect their access to molasses or the price of it. Given the importance of fermentation customers as a stable and reliable source of demand, it is unlikely that the merged entity would be in a position to behave independently from its customers and competitors.

(60)

In the Czech Republic, Südzucker and EDFM are not closely competing with each other. Moreover, EDFM’s lack of dedicated molasses storage capacity in the Czech Republic limits its ability to play an important role in the market other than that of distributing the product.

(61)

In Belgium, Südzucker and EDFM supply different customers. Südzucker supplies primarily the fermentation customers. The market investigation confirmed that fermentation customers have alternative suppliers and know-how to organise alternative supplies from third parties or source directly from countries of origin outside the EEA. In animal feed, EDFM has similar market shares to other traders in the market. During the market investigation no substantiated concerns were expressed by any customer group.

(62)

In France, EDFM’s presence is very limited ([0-5] % of overall molasses sales), which adds to Südzucker’s modest [20-30] % market share.

(63)

In Germany, Südzucker and EDFM account for only a small percentage of the molasses sold for animal feed production. With respect to molasses supplied to the fermentation industry, the Parties are both present (Südzucker [20-30] % and EDFM [10-20] %) and face competition of comparable strength. During the market investigation, all the fermentation customers confirmed that they currently multisource their molasses needs and in case the merger entity were to request a higher price for molasses they would look for alternatives suppliers.

(64)

In Slovakia, Südzucker and EDFM are not closely competing to each other. The Parties’ activities primarily overlap with respect to the supply of molasses to farmers who confirmed during the market investigation that it is easy to switch away from molasses to other feed components.

(65)

In light of the above elements, it is concluded that the proposed transaction is not likely to lead to competition concerns with respect to the supply of molasses in the EEA or at national level.

V. COMMITMENTS

(66)

In order to remove the identified competition concerns arising from the proposed transaction, the Parties proposed commitments under Article 8(2) of the Merger Regulation. The final commitments accepted as addressing the competition concerns identified by the Commission were submitted on 30 March 2012.

(67)

The final commitments consist of (i) the Divestiture by EDFM of all the shares currently held in Brindisi by EDFM corresponding to the […] % of the outstanding shares of Brindisi, and (ii) the transfer of the economic benefit of the Raw Cane Contracts. EDFM also undertook certain guarantees with respect to the Raw Cane Contracts.

(68)

Therefore, the Parties undertake, on top of the divestment of the shares of EDFM in Brindisi, the obligation to transfer the economic benefit of the Raw Cane Contracts to the new purchaser, while remaining free to choose the means of such transfer ensuring that Brindisi remains the final beneficiary of the current quantities and prices of the Raw Cane Contracts.

(69)

The final remedy package therefore removes competition concerns identified in a clear-cut way, as it provides (i) the divestiture of EDFM’s current participation in the Brindisi refinery, and (ii) the transfer of the economic benefit of the Raw Cane Contracts.

VI. CONCLUSION

(70)

For the reasons mentioned above, the decision concludes that the proposed concentration will not significantly impede effective competition in the Internal Market or in a substantial part of it.

(71)

Consequently the concentration should be declared compatible with the Internal Market and the functioning of the EEA Agreement, in accordance with Article 2(2) and Article 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.

(1) OJ L 24, 29.1.2004, p. 1.

		ISSN 1977-091X
Official Journal of the European Union		C 160

English edition	Information and Notices	Volume 57 27 May 2014

Notice No	Contents	page
	II Information
	INFORMATION FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES
	European Commission
2014/C 160/01	Non-opposition to a notified concentration (Case M.7162 — INEOS / SSG Solvents Business) ( 1 )	1

	IV Notices
	NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES
	European Commission
2014/C 160/02	Euro exchange rates	2
2014/C 160/03	New national side of euro coins intended for circulation	3
2014/C 160/04	New national side of euro coins intended for circulation	4
2014/C 160/05	New national side of euro coins intended for circulation	5
2014/C 160/06	Opinion of the Advisory Committee on mergers given at its meeting of 25 April 2012 regarding a draft decision relating to Case M.6286 Südzucker ED&F Man — Rapporteur: Spain	6
2014/C 160/07	Final Report of the Hearing Officer — Südzucker/ED&F Man (M.6286)	8
2014/C 160/08	Summary of Commission Decision of 16 May 2012 declaring a concentration compatible with the internal market and the functioning of the EEA Agreement (Case M.6286 — Südzucker/ED & F MAN) (notified under document C(2012) 3145 final) ( 1 )	11
	NOTICES FROM MEMBER STATES
2014/C 160/09	Reorganisation measures — Decision on a reorganisation measure in respect of Societatea de Asigurare-Reasigurare ASTRA SA	19

	V Announcements
	ADMINISTRATIVE PROCEDURES
	European Commission
2014/C 160/10	Training of national judges in EU competition law and judicial cooperation between national judges	20

	Corrigenda
2014/C 160/11	Corrigendum to Employment, Social Policy, Health and Consumer Affairs Council meeting on 9 and 10 December 2013 ( OJ C 376, 21.12.2013 )	21

	Currency	Exchange rate
USD	US dollar	1,3635
JPY	Japanese yen	138,97
DKK	Danish krone	7,4637
GBP	Pound sterling	0,80990
SEK	Swedish krona	9,0371
CHF	Swiss franc	1,2210
ISK	Iceland króna
NOK	Norwegian krone	8,1245
BGN	Bulgarian lev	1,9558
CZK	Czech koruna	27,421
HUF	Hungarian forint	302,77
LTL	Lithuanian litas	3,4528
PLN	Polish zloty	4,1550
RON	Romanian leu	4,4075
TRY	Turkish lira	2,8467
AUD	Australian dollar	1,4761
CAD	Canadian dollar	1,4812
HKD	Hong Kong dollar	10,5718
NZD	New Zealand dollar	1,5955
SGD	Singapore dollar	1,7085
KRW	South Korean won	1 396,64
ZAR	South African rand	14,1090
CNY	Chinese yuan renminbi	8,5071
HRK	Croatian kuna	7,5915
IDR	Indonesian rupiah	15 787,45
MYR	Malaysian ringgit	4,3768
PHP	Philippine peso	59,568
RUB	Russian rouble	46,6175
THB	Thai baht	44,432
BRL	Brazilian real	3,0288
MXN	Mexican peso	17,5305
INR	Indian rupee	80,0579

Insurance undertaking	Societatea de Asigurare-Reasigurare ASTRA SA, with its registered office at str. Nerva Traian nr. 3, bl. M101, sector 3, Bucureşti, România, J40/305/1991, unique registration code R 330904, registered in the Register of Insurers under No RA-005 on 10 April 2003
Date, entry into force and nature of the decision	Decision No 42 of 18 February 2014 launching the financial recovery procedure under special administration for Societatea Asigurare-Reasigurare ASTRA SA
Competent authorities	The Financial Supervisory Authority (ASF), with its head office at Splaiul Independenței nr. 15, sector 5, Bucureşti, România
Supervisory authority	The Financial Supervisory Authority (ASF), with its head office at Splaiul Independenței nr. 15, sector 5, Bucureşti, România
Administrator appointed	KPMG Advisory SRL, individual registration No 13204347, J40/6657/2000, Șos. București – Ploiești nr. 69-71, sector 1, Bucureşti, România, legally represented by Cristian Șerban Toader, bearer of ID series RR No 687411 issued by SPCLEP sector 4 on 22 June 2010
Applicable law	Romania Government Emergency Order No 93/2012 on the establishment, organisation and functioning of the Financial Supervisory Authority, approved with amendments by Law No 113/2013, as amended; Law No 503/2004 on financial recovery, insolvency, voluntary dissolution and winding-up of insurance business, republished; Law No 32/2000 on insurance and insurance supervision, as amended; Order No 3122 of the President of the Financial Supervisory Commission of 21 September 2005 approving the rules on the rights, obligations and powers of the special administrator.