EUROPEAN COMMISSION DG Competition

Only the English text is available and authentic.

REGULATION (EC) No 139/2004 MERGER PROCEDURE

Article 4(4) Date: 21/08/2024

EUROPEAN COMMISSION

Brussels, 21.8.2024 C(2024) 5989 final

PUBLIC VERSION

In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC) No 139/2004 concerning non-disclosure of business secrets and other confidential information. The omissions are shown thus […]. Where possible the information omitted has been replaced by ranges of figures or a general description.

Fortenova grupa d.d. Marijana Čavića 1 10000 Zagreb Croatia

Javna agencija Republike Slovenije za varstvo konkurence – Slovenian Competition Authority Dunajska cesta 58 1000 Ljubljana Slovenia

Date of filing: 18.07.2024 Legal deadline for response of Member States: 08.08.2024 Legal deadline for the Commission decision under Article 4(4): 23.08.2024

1OJ L 24, 29.1.2004, p. 1 (the ‘Merger Regulation’). With effect from 1 December 2009, the Treaty on the Functioning of the European Union (‘TFEU’) has introduced certain changes, such as the replacement of ‘Community’ by ‘Union’ and ‘common market’ by ‘internal market’. The terminology of the TFEU will be used throughout this decision.

2OJ L 1, 3.1.1994, p. 3 (the ‘EEA Agreement’).

Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111

Dear Sir or Madam,

1. I NTRODUCTION

(1) On 18 July 2024, the Commission received by means of a Reasoned Submission a referral request pursuant to Article 4(4) of the Merger Regulation with respect to the transaction cited above. The parties request the operation to be examined in its entirety by the competent authority of Slovenia.

(2) According to Article 4(4) of the Merger Regulation, before a formal notification has been made to the Commission, the parties to the transaction may request that their transaction be referred in whole or in part from the Commission to the Member State where the concentration may significantly affect competition, and which present all the characteristics of a distinct market.

(3) A copy of this Reasoned Submission was transmitted to all Member States on 18 July 2024.

(4) By letter of 7 August 2024, the Slovenian Competition Authority (Javna agencija Republike Slovenije za varstvo konkurence; the ‘SCA’) as the competent authority of Slovenia informed the Commission that Slovenia agrees with the proposed referral.

2. THE PARTIES

(5) Fortenova grupa d.d. (‘Fortenova’), headquartered in Croatia, is primarily active in the production and supply, wholesale, procurement, and retail sale of daily consumer goods through modern distribution channels in and outside the EU. In respect of the retail sale of daily consumer goods, Fortenova operates a network of approximately […] owned and […] franchised retail stores in Slovenia. Fortenova is currently not controlled by any individual or entity. Pavao Vujnovac (‘PV Group’), through its solely controlled subsidiary is currently in the process of acquiring sole control over Fortenova. This acquisition was subject to review under the Merger Regulation and unconditionally cleared on 11 June 2024. The PV Group is active mainly in respect of the production of fruits and vegetables, as well as in the energy and transport sectors in and outside the EU.

(6) Engrotuš d.o.o. (the ‘Target’), headquartered in Slovenia, is primarily active in the wholesale, procurement, and retail sale of daily consumer goods through modern distribution channels in Slovenia. In respect of the retail sale of daily consumer goods, the Target operates a network of approximately […] owned and […] franchised retail stores in Slovenia.

(7) Fortenova together with the Target will be hereinafter referred to as the ‘Parties’.

3M.11419 - PAVAO VUJNOVAC / FORTENOVA GROUP.

(4) The acquisition of sole control over Fortenova by PV Group does not change the jurisdiction under the Merger Regulation nor gives rise to additional affected markets in either Croatia or Slovenia with a view to Engrotuš d.o.o.’s business activities and their acquisition by Fortenova. Hence the acquisition of sole control over Fortenova by PV Group does not impact the assessment of the referral request pursuant to Article 4(4) of the Merger Regulation in the case at hand.

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3. THE O PERATION AND C ONCENTRATION

(8) On 15 November 2023, Fortenova through Poslovni system Mercator d.o.o., as acquirer on the one hand and the Target’s current owners TUŠ HOLDING, upravljanje družb in naložb, d.o.o. and AH INVEST 1, družba za investiranje, d.o.o., as sellers on the other hand, entered into the Sale and Purchase Agreement, pursuant to which Fortenova will acquire 100% of the shares in the Target (the ‘Proposed Transaction’). The Proposed Transaction will not encompass the drugstore business, the entertainment, recreation and catering activities, or the real estate business which are currently owned and operated by Engrotuš d.o.o. Those activities will be carved out of the Target prior to the closing of the Proposed Transaction.

(9) The Proposed Transaction constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

4. EU DIMENSION

(10) The Proposed Transaction has an EU dimension within the meaning of Article 1(2) of the Merger Regulation. The Parties have a combined aggregate turnover of more than EUR 5 000 million (Fortenova: EUR […]; and the Target: EUR […]). Each of the Parties achieved Union-wide turnover in excess of EUR 250 million (Fortenova: […]; and the Target: EUR […]). Fortenova does not achieve more than two thirds of its EU-wide turnover within one Member State.

5. ASSESSMENT

(11) The Proposed Transaction results in horizontally affected markets in relation to the retail sale of daily consumer goods through modern distribution channels, procurement of certain daily consumer goods, and certain segments of the wholesale of daily consumer goods in Slovenia. The Proposed Transaction also results in vertically affected markets in relation to Fortenova’s upstream production and supply of certain daily consumer goods and the Target’s downstream wholesale and procurement of daily consumer goods in Slovenia.

(12) With the exception of vertically affected markets in relation to Fortenova’s upstream production and supply of certain daily consumer goods and the Target’s downstream procurement of daily consumer goods in Croatia, the Proposed Transaction does not give rise to affected markets outside Slovenia.

5.1. Relevant product markets

5.1.1. Retail sale of daily consumer goods through modern distribution channels

(13) In previous decisions, the Commission considered that the sale of daily consumer goods carried out by retail outlets such as hypermarkets, supermarkets and discount chains (‘modern distribution channels’) constitutes a distinct market, different from

5For the sake of clarity, even considering that PV Group had already acquired sole control over Fortenova, the Proposed Transaction would still have an EU dimension within the meaning of Article 1(2) of the Merger Regulation. Furthermore, for the sake of clarity, we note that the question of whether Fortenova or the Target control their respective franchise businesses can be left open for the purposes of the referral since the Proposed Transaction has EU dimension and gives rise to affected markets regardless of whether these franchise businesses are taken into account or not.

the sale of consumer goods carried out by other types of retailers such as specialised outlets (butchers or bakers, for instance) and service stations. These modern distribution channels offer consumers a basket of fresh and dry foodstuffs and non-food household consumables sold in a supermarket environment. Supermarkets, hypermarkets and discount chains compete with respect to their food and non-food product range, marketing strategy and customer approach, and each offers consumers the possibility to purchase all their daily groceries in one shop.

(14) The Commission has generally left open the question of whether a further distinction should be made according to the total surface of the stores. However, it has considered possible segmentations between: (i) hypermarkets (larger than 2 500 square meters), (ii) supermarkets (between 400 and 2 500 square meters), (iii) convenience stores and neighbourhood stores (less than 400 square meters), and (iv) maxi-discount stores.

(15) The Parties consider that in line with the Commission’s decisional practice the market should be defined as retail sale of daily consumer goods through modern distribution channels, comprising supermarkets, hypermarkets, and discount chains. This is broadly in line with the decisional practice of the SCA.

(16) In any event, for the purposes of the Commission’s preliminary assessment under Article 4(4) of the Merger Regulation, the precise scope of the product market can be left open.

5.1.2. Procurement of daily consumer goods

(17) In previous decisions, the Commission has considered a separate market for the procurement of daily consumer goods, comprising the purchase of daily consumer goods from suppliers and wholesalers by customers such as wholesalers, retailers and other firms to be sold to consumers. The Commission considered that this

M.10631 – ITM/Mestdagh, (2022), paragraph 15; M.8374 – UAB Rimi Lietuva/UAB Palink, (2017), paragraph 13; M.7933 – Carrefour/Billa Romania and Billa Invest Construct, (2016), paragraph 14; M.7920 – Netto/J Sainsbury/Dansk Supermarked/New Edlington/Hedon/Roundhay Road, (2016), paragraph 15; M.7224 – Koninklijke Ahold/Spar CZ, (2014), paragraph 9; M.5112 – Rewe/Plus Discount, (2008), paragraph 15; and M.5047, REWE/Adeg, (2011), paragraph 24; M.4590 – Rewe/Delvita, (2007), paragraphs 9-14; M.4686 – Louis Delhaize/Magyar Hipermarket Kft., (2007), paragraph 8; M.2604 – ICA Ahold/Dansk Supermarked, (2001), paragraphs 10 and 11; and M.3905 – TESCO/Carrefour, (2005), paragraph 10.

M.10631 – ITM/Mestdagh, (2022), paragraph 15; M.8374 – UAB Rimi Lietuva/UAB Palink, (2017) paragraph 13; M.7933 – Carrefour/Billa Romania and Billa Invest Construct, (2016), paragraph 14; M.7920 – Netto/J Sainsbury/Dansk Supermarked/New Edlington/Hedon/Roundhay Road, (2016), paragraph 15; M.5677 – Schuitema/Super de Boer Assets, (2010), paragraph 18; M.6847 – Triton/Suomen Lähikauppa, (2013), paragraph 11; and M.784 – Kesko/Tuko, (1997), paragraphs 18-20.

M.10631 – ITM/Mestdagh, (2022), paragraph 15; and M.5677 – Schuitema/Super de Boer Assets, (2010), paragraph 18.

M.10631 – ITM/Mestdagh, (2022), paragraph 17; M.9847 – Aldi/FPLPH Assets, paragraph 15; M.7345 – Carrefour/53 magasins de Billa en Italie, paragraph 12.

M.7345 – Carrefour/53 magasins de Billa en Italie, paragraph 12.

Form RS, paragraph 47.

M.10631 – ITM/Mestdagh, (2022), paragraph 13; M.9495 – Fortenova Grupa/Poslovni Sistemi Mercator, (2020), paragraph 77; M.8374 – Uab Rimi Lietuva/Uab Palink, (2017), paragraph 16; M.7933 – Carrefour/Billa Romania and Billa Invest Construct, (2016) paragraph 16; M.7920 – Netto/J Sainsbury/Dansk Supermarked/New Edlington/Hedon/Roundhay Road, (2016), paragraph 19; M.7702 – Koninklijke Ahold/Delhaize Group, (2016), paragraph 15; M.7224 – Koninklijke Ahold/Spar CZ, (2014), paragraph 10; M.5122 – Rewe/Plus Discount, (2008), paragraph 16; M.1684 – Carrefour/Promodes, (2000), paragraph 14; and M.1221 – Rewe/Meinl, (1999), paragraph 75.

M.11165 – Carrefour/Romania Hypermarche (2023), paragraph 14 ; M.9495 – Fortenova Grupa/Poslovni Sistemi Mercator, (2020) paragraph 74. M.7920 – Netto/J Sansbury/Danks Supermarked/New Edlington/Hedon/Roundhay Road, paragraph 19; M.7933 – Carrefour/Billa Romania and Billa Invest Construct, (2016), paragraph 16; M.1221 – REWE/Meinl, (1999), paragraph 81.

M.7592 – Système U/Auchan (2015), paragraph 12; M.7336 – Carrefour/Dia (2014), paragraph 20.

Form RS, paragraph 66.

M.9495 – Fortenova Grupa/Poslovni Sistemi Mercator, (2020), paragraph 81.

Form RS, paragraph 59.

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market may be further segmented with a view to different sales channels (such as, food-retailing, specialised trade, delicatessen, cash and carry stores and other wholesalers, drugstores and export trade) but has left the precise scope of the product market open.

(18) The Commission considered but ultimately left open whether the procurement markets for daily consumer goods could also be further segmented into the following product categories: (1) liquids, (2) drugstore, (3) perfume and hygiene products, (4) dry grocery, (5) para-pharmacy products, (6) self-service perishables, (7) cured meats, (8) sea food, (9) fruits and vegetables, (10) bread and pastries, (11) meat, (12) do-it-yourself, (13) home, (14) culture, (15) toys, leisure and relaxation, (16) gardening, (17) automobile, (18) large household appliances, (19) small household appliances, (20) photography/cinema, (21) hi-fi and audio systems, (22) TV and video, (23) textiles and footwear.

(19) The Parties consider that in line with the Commission’s decisional practice the market should be defined as procurement of daily consumer goods; however, a further segmentation of this market is not warranted. This is broadly in line with the decisional practice of the SCA.

(20) In any event, for the purposes of the Commission’s preliminary assessment under Article 4(4) of the Merger Regulation, the precise scope of the product market can be left open.

5.1.3. Wholesale of daily consumer goods

(21) In previous decisions, the Commission has considered the wholesale of daily consumer goods as a separate relevant product market. The Commission has considered but ultimately left open further potential segmentations, such as: (i) segmentation into food and related non-food products; (ii) segmentation by mode of supply (e.g. delivered wholesale, contract distribution, and cash & carry); (iii) segmentation by temperature range (i.e. frozen, chilled / fresh, and ambient); (iv) segmentation by geographic scope of the customers (i.e. national or independent); (v) segmentation by end-customer type (i.e. quick service, full service, pubs / coffee shops, hotels / accommodation, business & industry, other commercial, health, education, other institutional); and (vi) segmentation by product category (e.g. fruit & vegetables, poultry, savoury bakery, sweet bakery, dairy, fish, confectionary, desserts, meat, all other).

(22) The Parties consider that in line with the Commission’s decisional practice, the market should be defined as wholesale of daily consumer goods and that in certain instances it may be appropriate to further segment this market, for instance, by product category and / or customer type. This is broadly in line with the decisional practice of the SCA.

(23) In any event, for the purposes of the Commission’s preliminary assessment under Article 4(4) of the Merger Regulation, the precise scope of the product market can be left open.

5.1.4. Production and supply of daily consumer goods

(24) In previous decisions, the Commission has considered separate product markets for production and supply of daily consumer goods based on narrow product categories. The Commission has also considered but ultimately left open whether private label and branded products belong to the same market as well as whether the distinction between production and supply of food products dedicated to the retail sector and the production and supply of food products to the food service sector is warranted.

(25) With a view to Fortenova’s offering at the level of production and supply in Slovenia, in previous decisions concerning other companies, the Commission has pondered but left open separate markets for dessert sauces and cocoa-based beverages.

(26) The Parties consider that in line with the Commission’s decisional practice the markets should be defined as respectively production and supply of cocoa-based beverages and dessert sauces / toppings. This is broadly in line with the decisional practice of the SCA.

(27) In any event, for the purposes of the Commission’s preliminary assessment under Article 4(4) of the Merger Regulation, the precise scope of the product market can be left open. For the purposes of this decision, the Commission considers separate product markets for cocoa-based beverages and dessert sauces / toppings.

5.2. Relevant geographic markets

5.2.1. Retail sale of daily consumer goods through modern distribution channels

(28) In previous decisions, the Commission has considered that the geographic market for the retail sale of daily consumer goods through modern distribution channels is local in nature, the exact geographical scope corresponding to a catchment area around each store, based on travel distance to the store. In previous decisions, the Commission has considered a zone of 10, 20, or 30 minutes of travel time by car to the store: in general, hypermarkets, defined as stores with a surface of more than 2 500 square meters, have a larger catchment area (20 to 30 minutes) than smaller stores such as supermarkets (catchment areas of 10 to 20 minutes). This is broadly in line with the decisional practice of the SCA.

(29) The Parties consider that the geographic scope of the market for the retail sale of daily consumer goods through modern distribution channels has national and local elements, whilst it is appropriate, in line with the Commission’s decisional practice, to define the relevant market as local catchment areas.

(30) In any event, for the purposes of the Commission’s preliminary assessment under Article 4(4) of the Merger Regulation, the precise scope of the geographic market can be left open.

5.2.2. Procurement of daily consumer goods

(31) In previous decisions, the Commission considered the market for the procurement of daily consumer goods to be national in scope. The main reasons are the fact that consumer preferences relate to national products and that suppliers generally negotiate on a national level.

(32) The Parties consider that in line with the Commission’s decisional practice the geographic scope of the market for the procurement of daily consumer goods should be national in scope. This is broadly in line with the decisional practice of the SCA.

(33) In any event, for the purposes of the Commission’s preliminary assessment under Article 4(4) of the Merger Regulation, the precise scope of the geographic market can be left open.

5.2.3. Wholesale of daily consumer goods

(34) From a geographic perspective, the Commission has previously considered the market for the wholesale of daily consumer goods to be national in scope.

(35) The Parties consider that in line with the Commission’s decisional practice the geographic scope of the market for the wholesale of daily consumer goods should be national. This is broadly in line with the decisional practice of the SCA.

(36) In any event, for the purposes of the Commission’s preliminary assessment under Article 4(4) of the Merger Regulation, the precise scope of the geographic market can be left open.

5.2.4. Production and supply of daily consumer goods

(37) From a geographic perspective, the Commission has previously considered the market for the production and supply of daily consumer goods to be national in scope.

Form RS, paragraph 53.

M.10631 – ITM/Mestdagh (2022), paragraph 15; M.8374 – UAB Rimi Lietuva/UAB Palink (2017), paragraph 19; M.7933 – Carrefour/Billa Romania and Billa Invest Construct (2016) paragraph 19; M.7920 – Netto/J Sainsbury/Dansk Supermarked/New Edlington/Hedon/Roundhay Road (2016), paragraph 21; M.7224 – Koninklijke Ahold/Spar CZ (2014), paragraph 12; M.5112 – REWE/Plus discount (2008). paragraph 23.

Form RS, paragraph 68.

M.9495 – Fortenova Grupa/Poslovni Sistemi Mercator, (2020), paragraphs 126 et seq.

Form RS, paragraph 61.

M.9495 – Fortenova Grupa/Poslovni Sistemi Mercator, (2020), paragraphs 94 et seq.; M.5644 – Kraft Foods/Cadbury, (2010), paragraphs 42 et seq.; M.6627 – Arla Foods/Milch-Union Hocheifel, (2012), paragraphs 94 et seq.

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The Parties consider that in line with the Commission’s decisional practice, the geographic scope of the market for the production and supply of daily consumer goods should be national. This is broadly in line with the decisional practice of the SCA.

In any event, for the purposes of the Commission’s preliminary assessment under Article 4(4) of the Merger Regulation, the precise scope of the product market can be left open.

5.3. Assessment of the referral request

5.3.1. Legal requirements

30According to the Commission Notice on Case Referral (the ‘Notice’), in order for a referral to be made by the Commission to one or more Member States pursuant to Article 4(4), the following two legal requirements must be fulfilled:

(a) there must be indications that the concentration may significantly affect competition in a market or markets,and

(b) the market(s) in question must be within a Member State and present all the characteristics of a distinct market.

5.3.1.1. The Proposed Transaction may significantly affect competition in a market or markets

33According to paragraph 17 of the Notice, the existence of an affected market is generally considered sufficient to meet the first requirement set forth in Article 4(4) of the Merger Regulation.

The Proposed Transaction results in horizontally and vertically affected markets in Slovenia.

In respect of the retail sale of daily consumer goods through modern distribution channels in Slovenia, the Proposed Transaction would lead at least to the following horizontally affected markets when considering the Commission’s and the SCA’s decisional practice:

(a) the national market for retail sale of daily consumer goods through modern distribution channels;

(b) 194 affected markets comprising hypermarkets, supermarkets, and convenience stores within a catchment area of 30 minutes by car of Target’s retail stores;

(c) 195 affected markets comprising hypermarkets, supermarkets, and convenience stores within a catchment area of 20 minutes by car of Target’s retail stores;

(d) 158 affected markets comprising hypermarkets, supermarkets, and convenience stores within a catchment area of 10 minutes by car of Target’s retail stores;

(e) 4 affected markets comprising only hypermarkets within a catchment area of 30 minutes by car of Target’s retail stores;

(f) 82 affected markets comprising only supermarkets within a catchment area of 20 minutes by car of Target’s retail stores;

(g) 89 affected markets comprising only convenience stores within a catchment area of 10 minutes by car of Target’s retail stores.

In respect of the procurement of daily consumer goods in Slovenia, the Proposed Transaction would lead to at least the following horizontally affected markets / segments when considering the Commission’s and the SCA’s decisional practice:

(a) the national market for procurement of daily consumer goods;

(b) the national market segment for procurement of beer;

(c) the national market segment for procurement of wine and spirits.

In respect of the wholesale of daily consumer goods in Slovenia, the Proposed Transaction would lead to at least one horizontally affected market when considering the Commission’s and the SCA’s decisional practice, i.e. the national market for wholesale of daily consumer goods to independent grocery stores (including franchised stores).

In respect of the production and supply of daily consumer goods in Slovenia, the Proposed Transaction would lead at least to the following vertically affected markets when considering the Commission’s and the SCA’s decisional practice:

(a) Fortenova’s upstream production and supply of cocoa-based beverages vis-à-vis the Target’s downstream wholesale and procurement activities in relation to daily consumer goods;

(b) Fortenova’s upstream production and supply of dessert sauces / toppings vis-à-vis the Target’s downstream wholesale and procurement activities in relation to daily consumer goods.

Besides the said affected markets, the Proposed Transaction further gives rise to horizontal overlaps in relation to procurement of daily consumer goods in Croatia as well as other Member States. However, these horizontal overlaps do not give rise to affected markets.

Moreover, the Proposed Transaction gives rise to vertical relationships between Fortenova’s upstream production and supply of certain products and the Target’s downstream activities in relation to procurement of daily consumer goods in Croatia. These links even lead to vertically affected market segments in relation upstream production and supply of edible oils, margarine, ketchup, mayonnaise, bottled water and iced/ready-to-drink tea and the Target’s downstream activities in relation to procurement of daily consumer goods in Croatia. For the sake of clarity, given the limited market shares in respect of the Target’s downstream activities, it should be noted that the vertically affected market segments arise based on Fortenova’s market shares in relation to its upstream production and supply activities in Croatia.

However, any foreclosure strategies in relation to these vertically affected markets, if at all, could only have a meaningful impact in Slovenia.

Looking at the downstream procurement segments considered by the Commission (i.e., basic foods, dairy products, processed food, meat and sausages, non-alcoholic beverages), the Target’s procurement share in Croatia is for each of these segments below 2%. Even when considering the narrowest upstream product categories (i.e., edible oils, margarine, ketchup, mayonnaise, bottled water and iced/ready-to-drink tea), the Target’s corresponding procurement share in Croatia is for each of these categories well below 10%.

The Target does neither have subsidiaries in Croatia nor any business operations or physical presence in relation to wholesale, procurement, and / or retail of daily consumer goods in Croatia. The Target’s central procurement is located exclusively in Slovenia. The Target negotiates mostly with Slovenian subsidiaries of Croatian suppliers and in some instances with Croatian subsidiaries of Croatian suppliers. All these suppliers deliver their goods directly to the Target’s central warehouse in Slovenia.

The relevant products have no elements of national specificity and Croatian goods / brands in these categories are not perceived to be ‘must have’ products by Croatian or Slovenian customers, meaning that procurement from Croatia is not essential. Furthermore, the Target could equally have procured these products from suppliers in Slovenia, where equivalent products are readily available. It is also noteworthy that most of the products for which Fortenova has a higher estimated share are packaged commodity products with long shelf-lives, which means that, in addition to Slovenia, these products can be procured from producers/suppliers in other neighbouring countries or even across Europe.

In respect of input foreclosure, even setting aside the ability (which appears questionable, as retail as well as wholesale competitors in Croatia appear to have alternative suppliers in Croatia for the production and supply of daily consumer goods, as well as in Slovenia and neighbouring countries), the Parties would lack an incentive to engage in such strategies in Croatia. The Target has no retail or wholesale presence in Croatia, and hence would not be able to capture the extra demand diverted by input foreclosure to a sufficient extent. The impact of input foreclosure could materialise, if at all, only in Slovenia.

In respect of customer foreclosure, the Target is a negligible customer with no market power in Croatia. Competing Croatian suppliers would still have unchanged access to all retail and wholesale customers residing in Croatia. The impact of customer foreclosure could materialise, if at all, only in Slovenia.

In view of the above, the Commission considers that the Proposed Transaction is unlikely to significantly affect competition in respect of the said vertical relationships in Croatia.

The first legal requirement that there must be indications that the concentration may significantly affect competition in a market or markets set forth in Article 4(4) of the Merger Regulation appears to be met.

5.3.1.2. The market(s) in question must be within a Member State and present all the characteristics of a distinct market

According to paragraph 18 of the Notice, the second requirement set forth by Article 4(4) of the Merger Regulation is satisfied if the geographic scope of the markets where competition is affected is national or narrower than national.

As indicated above, the markets for the production and supply, wholesale, procurement, and retail sale of daily consumer goods through modern distribution channels are characterised by strong local elements and defined narrower than national or national in scope by the Commission and even the SCA.

The second legal requirement that the market(s) in question must be within a Member State, Slovenia in the present case, and present all the characteristics of a distinct market set forth by article 4(4) of the Merger Regulation also appears to be met.

5.3.2. Additional factors

In addition to the verification of the legal requirements, paragraph 19 of the Notice provides that it should also be considered whether referral of the case is appropriate, and in particular ‘whether the competition authority or authorities to which they are contemplating requesting the referral of the case is the most appropriate authority for dealing with the case’.

In addition, paragraph 23 of the Notice states that ‘Consideration should also, to the extent possible, be given to whether the NCA(s) to which referral of the case is contemplated may possess specific expertise concerning local markets, or be examining, or about to examine, another transaction in the sector concerned’.

First, the SCA has specific expertise in the assessment of markets in the relevant sector at hand. In fact, the SCA has in the past reviewed concentrations in relation to the production and supply, wholesale, procurement, and retail sale of daily consumer goods through modern distribution channels.

Second, in light of the information submitted in the Reasoned Submission by Fortenova, the Commission considers that the effects of the Proposed Transaction

Form RS, paragraphs 146 et seq.

SCA decisions in cases Agrokor/Mercator (2013); Mercator/Era (2015); Agrokor/Ardeya Global (2018); Mercator/Vesna (2012); Lactalis/Ljubljanske mlekame (2012); Podravka/Žito (2015); Pivovarna Laško/Davidov Hram (2022).

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are confined to Slovenia. Thus, the case may require investigative efforts at local level that the SCA seems better placed to conduct.

64Third, a referral of the Proposed Transaction to the SCA satisfies the need to preserve the benefit of the ‘one-stop-shop’. The case would be referred in its entirety to a single competition authority (i.e. the SCA), which is an important factor of administrative efficiency.

65Fourth, the Commission regularly refers cases concerning the retail sales of daily consumer goods to national competition authorities.

5.3.3. Conclusion on referral

66On the basis of the information provided by the parties in the Reasoned Submission, the case meets the legal requirements set out in Article 4(4) of the Merger Regulation in that the concentration may significantly affect competition in a market within a Member State which presents all the characteristics of a distinct market.

67Moreover, the requested referral would be consistent with paragraphs 19-23 of the Notice, in particular because the SCA appears to be the most appropriate authority to examine the Proposed Transaction.

6. CONCLUSION

68For the above reasons, and given that Slovenia has expressed its agreement, the Commission has decided to refer the Proposed Transaction in its entirety to be examined by Slovenia. This decision is adopted in application of Article 4(4) of the Merger Regulation and Article 57 of the EEA Agreement.

For the Commission

(Signed) Olivier GUERSENT Director-General

M.7336 - Carrefour France/Dia France (2014); M.11165 – Carrefour/Romania Hypermarche (2023); M.10201 - Ahold Delhaize/Deen Assets (2021); and M.10015 – Carrefour/Supersol (2020).

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