Brussels, 4 October 2013
Mergers: Commission clears acquisition of fruit juice bottler Pride Foods (Gerber Emig) by rival Refresco, subject to conditions
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of fruit juice bottler Pride Foods (trading under the name Gerber Emig) of the UK by Dutch rival Refresco. The clearance is conditional upon the divestment of one of Gerber Emig's production and bottling plants in Germany. The parties are both active in the production and bottling of non-carbonated soft drinks (NCSDs) to retailers and in contract manufacturing branded NCSDs for brand owners in a number of European Economic Area (EEA) Member States. The Commission's concerns related to private label bottling in France, Germany and Belgium. The commitments offered by Refresco address these concerns.
The Commission's investigation showed that the proposed transaction, as originally notified, would have eliminated an important competitor from the market of private label bottlers for supermarkets in France, Germany and Belgium in particular in relation to fruit juices, juice drinks, nectars and still drinks bottled in aseptic PET. The parties would also have had a very strong position in relation to ready-to-drink (RTD) teas bottled in aseptic PET in Germany. The Commission had concerns that the remaining competitors would have been unable to exercise a sufficient competitive constraint on the merged entity to avoid price increases.
In order to address the Commission's competition concerns, Refresco offered to divest Gerber Emig's production and bottling plant in Waibstadt, Germany. This plant has the ability to bottle aseptic PET in sufficient volumes to impose a competitive constraint on the parties in the areas of concern. Moreover, Waibstadt is already currently used by Gerber Emig to deliver aseptic PET products to France, Belgium and Germany.
In view of the remedies proposed, the Commission concluded that the transaction, as modified, would raise no competition concerns. This decision is conditional upon full compliance with the commitments.
The transaction was notified to the Commission on 16 August 2013.
Companies and products
Refresco is a Dutch company with production facilities in the Netherlands, Belgium, Finland, France, Germany, Italy, Poland, Spain and the UK. It produces and bottles private label non-alcoholic beverages (NABs) for retailers and contract manufactures NABs for brand owners. Refresco's range of NABs includes carbonated soft drinks (CSDs), fruit and vegetable juices, fruit drinks, sports drinks, sparkling and still mineral water, RTD teas, and energy drinks. Refresco also owns the children's drink brand "Wicky" as well as a number of private label equivalent brands.
Pride Foods is a UK company with production facilities in the UK, Germany, France and Poland. Pride Foods trades under the name Gerber Emig. It produces and bottles private label NCSDs for retailers and contract manufactures NCSDs for brand owners, mainly fruit juices and still drinks, flavoured water and RTD teas. Pride Foods also has limited activities in the production and sale of own brand juices and juice drinks.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).