Article 4
This Decision is addressed to: Südzucker Aktiengesellschaft Maximilianstr. 10 D - 68165 Mannheim. Done at Brussels, 20 December 2001. For the Commission Mario Monti Member of the Commission (1) OJ L 395, 30.12.1989, p. 1; corrigendum OJ L 257, 21.9.1990, p. 13. (2) OJ L 180, 9.7.1997, p. 1; corrigendum OJ L 40, 13.2.1998, p. 17. (3) OJ C 97, 24.4.2003. (4) OJ C 97, 24.4.2003. (5) Turnover calculated in accordance with Article 5(1) of the Merger Regulation and with the Commission notice on calculation of turnover (OJ C 66, 2.3.1998, p. 25). (6) Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets and marked with an asterisk. (7) The parties also commented in writing after the hearing, notably by Südzucker's memoranda of 5 and 6 November 2001 and SLS's memoranda of 5 and 9 November 2001. (8) OJ L 61, 2.3.1988, p. 1. (9) See the Commission notice on remedies acceptable under Council Regulation (EEC) No 4064/89 and under Commission Regulation (EC) No 447/98, OJ C 68, 2.3.2001, p. 4, recital 13. (10) See Commission Decision 97/624/EC of 14 May 1997 in Case IV/F-3/M.34.621 Irish Sugar, OJ L 258, 22.9.1997, p. 1, recital 90, and Commission Decision 1999/210/EC of 14 October 1998 in Case IV/F-3/33.708 British Sugar, OJ L 76, 22.3.1999, p. 1, recital 59. (11) OJ L 178, 30.6.2001, p. 1. (12) On this point and the argument that follows see Commission Decision of 31 January 2001 in Case COMP/M.2097 - SCA/Metsä Tissue, recitals 23 et seq., and Commission Decision of 27 July 2001 in Case COMP/M.2337 - Nestlé/Ralston Purina, recitals 15 et seq. (13) See also Court of Justice in Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114/73 Suiker Unie [1975] ECR 1663, paragraphs 16, 17 and 24. (14) See Commission Decision 97/624/EC of 14 May 1997 in Case IV/F-3/M.34.621 Irish Sugar, OJ L 258, 22.9.1997, p. 1, recital 98, and Commission Decision 1999/210/EC of 14 October 1998 in Case IV/F-3/33.708 British Sugar, OJ L 76, 22.3.1999, p. 1, recital 65. (15) Commission Decision 73/109/EEC of 2 January 1973 in Case IV/26.918 European sugar industry, OJ L 140, 26.5.1973, p. 17. (16) Thuringia, Saxony, Saxony-Anhalt, Mecklenburg-Western Pomerania, Berlin and Brandenburg. (17) The sugar "season" is the period in which sugar is produced in Europe, and stretches from October to December. The "marketing year" therefore begins on 1 October, and ends on 30 September of the following year. (18) Points 64 et seq. of the reply. (19) See also Court of Justice in Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114/73 Suiker Unie [1975] ECR 1663, paragraphs 16, 17 and 24. (20) Points 21 to 29 of the statement of objections. (21) Points 64 et seq. of the reply. (22) See the Commission Decisions of 31 January 2001 in Case COMP/M.2097 - SCA/Metsä Tissue (recitals 60 et seq.) and 27 July 2001 in Case COMP/M.2337 - Nestlé/Ralston Purina (recitals 32 et seq.). (23) As used here, "southern Germany" refers to the Länder of Bavaria, Baden-Württemberg, Saarland, Hessen and Rheinland-Pfalz. (24) Already, an area the size of the Land of Rheinland-Pfalz, with a surface area of some 20000 square kilometres and some four million inhabitants, is, according to the case law of the Court of Justice, to be considered a substantial part of the common market (judgment of 25 October 2001 in Case C-475/99 Ambulanz Glöckner, not yet reported, paragraph 38). (25) See also Commission Decision 1999/210/EC of 14 October 1998 in Case IV/F-3/33.708 British Sugar, OJ L 76, 22.3.1999, p. 1, recital 4. (26) African, Caribbean and Pacific States. See Article 36(4) of the Partnership Agreement between the members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000, and Article 13 of Annex V to that Agreement, OJ L 317, 15.12.2000, p. 3; those provisions confirm Protocol 3 on ACP sugar annexed to the Lomé Convention signed on 28 February 1975, OJ L 25, 30.1.1976, p. 114. (27) OJ 30, 20.4.1962, p. 993/62. (28) OJ 53, 1.7.1962, p. 1571/62. (29) Südzucker expressly agrees with this in point 6 of its reply to the statement of objections. (30) Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114-73 [1975] ECR 1663, paragraph 24. (31) Point 93 of the reply. (32) See Court of Justice in Case 85/76 Hoffman - La Roche [1979] ECR 461, paragraph 39, and Court of First Instance in Case T-102/96 Gencor [1999] ECR II-753, paragraphs 201 and 202. (33) Points 90 to 94 of the reply. (34) See, in particular, points 54 and 57 of the statement of objections. (35) See also point 45 of the statement of objections. (36) See also point 55 of the statement of objections. (37) See in particular Articles 8 and 9 of the Agreement on Agriculture concluded in 1994 in the framework of the WTO, OJ L 336, 23.12.1994, p. 22. (38) No meaningful statistics are kept for the southern German market. However, the market study findings suggest that the trend for Germany as a whole can be extrapolated for southern Germany. (39) Points 105 et seq. of the reply. (40) Points 109 et seq. of Südzucker's reply; statement made by SLS at the hearing on 26 October 2001 and letters from SLS dated 5, 9 and 23 November 2001. (41) Points 120 et seq. of the reply. (42) Confirmed in writing on 5, 9 and 23 November 2001. (43) Confirmed in writing on 5, 9 and 23 November 2001. (44) The storage cost reimbursement was EUR 3,3 per month. Data from SLS shows the average storage time of [...]* months for sugar for export to non-EU countries to be much lower than the average six-month storage time for sugar destined for the Community market. According to SLS, this difference stems from the fact that exports to non-EU countries are carried out during the marketing period, in order to keep storage costs as low as possible. On the basis of this difference in storage time, the loss of the storage cost reimbursement gives an average loss in proceeds per 1000 tonnes of quota sugar for exports to non-EU countries of EUR [...]* ([...]* x 3,3 = [...]*), which is lower than that for exports within the Community (EUR [...]*, corresponding to [...]* x [...]*). (45) The figure of EUR [...]* is the price which SLS charges [to ...]*. (46) According to data provided by SLS itself, the company's profit margin comes, on a full cost basis, to [...] in the case of industrial sugar and to [...] in that of retail sugar. It must be borne in mind, however, that the profit margin is distinctly bigger when based on variable costs; this measure is much more significant for purposes of analysing market power. The supply of sugar for private labels is of no significance on the French market, the only one with which we are concerned at this point. (47) Points 128 et seq of the reply. (48) See SLS's reply of 25 September 2001 to the Commission's request for information of 31 August 2001, p. 57, where mention is made of "industrial customers and distributors who are increasingly developing European purchasing strategies" (original French: "clients industriels et distributeurs qui développent de plus en plus des stratégies d'achats européennes"). (49) Position taken by Ebro Puleva during talks with members of the Merger Task Force on 6 December 2001 and in a letter dated 7 December 2001. (50) Points 134 et seq. of the reply. (51) For details, see Section A of Annex II. (52) For details, see Section B of Annex II. (53) See Commission Notice on remedies acceptable under Council Regulation (EEC) No 4064/89 and under Commission Regulation (EC) No 447/98, OJ C 68, 2.3.2001, p. 3, recitals 13 et seq. (54) Section 2 of the German Order on the distribution and amendment of quotas for sugar of 22 October 1981, BGBl. I, p. 1161. (55) Article 12(1) (3) and (4), in conjunction with Annex IV, point II(1)(c), of the common organisation of the market in sugar. (56) Article 12(1) and (4), in conjunction with Annex IV, point IV(a) of the common organisation of the market in sugar. (57) Article 12(4), in conjunction with Annex IV, point stet IV(b) of the common organisation of the market in sugar. (58) See full text of Commission Notice on remedies acceptable under Council Regulation (EEC) No 4064/89 and under Commission Regulation (EC) No 447/98, OJ C 68, 2.3.2001, p. 3, paragraph 12. (59) Paragraphs 1, 2, 10 to 15 and 23 (first sentence) of Annex II.