“38. Investigations and reports on references under section 22 … (1) The CMA shall prepare and publish a report on a reference under section 22 […] within the period permitted by section 39. (2) The report shall, in particular, contain— (a) the decisions of the CMA on the questions which it is required to answer by virtue of section 35 […]; (b) its reasons for its decisions; and (c) such information as the CMA considers appropriate for facilitating a proper understanding of those questions and of its reasons for its decisions. (3) The CMA shall carry out such investigations as it considers appropriate for the purposes of preparing a report under this section.” (a) the decisions of the CMA on the questions which it is required to answer by virtue of section 35 […]; (b) its reasons for its decisions; and (c) such information as the CMA considers appropriate for facilitating a proper understanding of those questions and of its reasons for its decisions. Section 39(1) states that a report under section 38 must be published within 24 weeks of the reference. Section 39(3) allows the CMA to extend that time period by no more than eight weeks: “… if it considers that there are special reasons why the report cannot be prepared and published within that period.”
“104. Certain duties of [the CMA] to consult (1) Subsection (2) applies where the relevant authority is proposing to make a relevant decision in a way which the relevant authority considers is likely to be adverse to the interests of a relevant party. (2) The relevant authority shall, so far as practicable, consult that party about what is proposed before making that decision. (3) In consulting the party concerned, the relevant authority shall, so far as practicable, give the reasons of the relevant authority for the proposed decision. (4) In considering what is practicable for the purposes of this section the relevant authority shall, in particular, have regard to— (a) any restrictions imposed by any timetable for making the decision; and (b) any need to keep what is proposed, or the reasons for it, confidential. (5) The duty under this section shall not apply in relation to the making of any decision so far as particular provision is made elsewhere by virtue of this Part for consultation before the making of that decision. […].”
“120. Review of decisions under Part 3 (1) Any person aggrieved by a decision of the CMA … under this Part in connection with a reference or possible reference in relation to a relevant merger situation or a special merger situation may apply to the Competition Appeal Tribunal for a review of that decision. … (4) In determining such an application the Competition Appeal Tribunal shall apply the same principles as would be applied by a court on an application for judicial review. (5) The Competition Appeal Tribunal may— (a) dismiss the application or quash the whole or part of the decision to which it relates; and (b) where it quashes the whole or part of that decision, refer the matter back to the original decision maker with a direction to reconsider and make a new decision in accordance with the ruling of the Competition Appeal Tribunal.” (a) dismiss the application or quash the whole or part of the decision to which it relates; and (b) where it quashes the whole or part of that decision, refer the matter back to the original decision maker with a direction to reconsider and make a new decision in accordance with the ruling of the Competition Appeal Tribunal.”
“9.9 Based on the above methodology, the Parties currently have a very high combined share in the wholesale supply of DTB products to grocery retailers in the UK. Further, that high share has been sustained over time and sustained at least up to forecast for 2023, and the only other suppliers with notable (although significantly lower) shares are Henglein and Bells.”
“37. Large grocery retailers, which account for the large majority of DTB products sold in the UK, told us that their ability to trade off the Parties in their negotiations is an important constraint which enables them to get a good deal when purchasing DTB products. 38. These grocery retailers told us that they may not typically explicitly pit their PL supplier against their branded supplier but that the availability of both is a source of competitive tension that would be lost by the Merger, thereby reducing their ability to protect against potential price rises (or other kind of worsening in the Parties’ DTB offerings). The Parties’ internal documents also show some evidence of this kind of constraint operating in practice. 39. We consider that the constraint between the Parties is important for both channels, noting that PL in particular (for which Cérélia is the leading supplier) operates as a pricing discipline on Jus-Rol. Post-merger, the strong market positions held by each of Cérélia and Jus-Rol will be consolidated within the Merged Entity, resulting in the loss of the constraint between the Parties which will, in turn, affect retailers’ ability to resist a price rise (or other worsening in the Parties’ offerings). 40. There is significant overlap in the product ranges that the Parties supply to grocery retailers. While some retailers might only buy some of the products within the Parties’ ranges at present, we found that the DTB product category should, for the purposes of assessing competition, be considered as a whole (because retailers consider all DTB products together and suppliers are able to alter and expand the types of DTB product that they offer to grocery retailers). 41. While, as noted above, there are important differences in the offerings of the Parties, the relative importance of the competitive constraint offered by the Parties upon each other also depends on the available alternatives. As discussed further below, we found that there were few credible alternatives for grocery retailers purchasing DTB products, which makes the loss of the competition between the Parties particularly important. 42. The Parties told us that because Cérélia already manufactures most of the Jus-Rol products sold in the UK, there could be no existing competition between the Parties which would be lost by the merger. We note that this submission is not fully supported by the data that the Parties have provided. We also note, more broadly, that Cérélia’s role in manufacturing Jus-Rol products is based on a contractual relationship, which is materially different in nature to a merger. A contractual relationship does not result in a lasting change in market structure, has limited duration and may be renegotiated or terminated even before its initial term. 43. In this regard, the Merger would result in material changes in competitive dynamics and market structure: (a) Post-Merger, Cérélia would have control over all aspects of the wholesale offering to retailers across both channels, which it does not have at present. In particular, Cérélia would have control over pricing of both the PL products bought by retailers from Cérélia and Jus-Rol products and could determine pricing to maximise joint profits (which is not the case at present). (b) The Merger would also ‘cement’ Cérélia’s role as the manufacturer of Jus-Rol products. As a result of the transaction, GMI would lose its ability to independently decide its commercial strategy, including whether to terminate the agreement with Cérélia and appoint an alternative supplier, take the production back in-house, or take any other course of action relating to its Jus-Rol products. 44. We therefore found that the Parties’ submissions, that it would not be profitable to raise prices or degrade the quality of both Jus-Rol products and Cérélia’s manufacturing services to retailers for the PL channel, were not supported by the evidence available to us.”
“...there is no reason to make a mystery about the subjects that commissioners deal with, or to invite the court to impose any exceptional restraint on themselves because they are dealing with cases that arise out of facts found by the commissioners. Their duty is no more than to examine those facts with a decent respect for the tribunal appealed from and, if they think that the only reasonable conclusion on the facts found is inconsistent with the determination come to, to say so without more ado.”
“168. Given the diverse mix of factors taken into account by the CMA in considering Bells’ effectiveness as a constraint, it is entirely possible that the CMA might have reached a different outcome on this assessment. It is possible that, had it done so, this might have affected its overall SLC assessment regarding a post-Merger increase in PL prices. It was open for the CMA to have done more to explore whether any given loss of Cérélia’s PL volume to a rival PL supplier would (if credible) have been sufficient to provide an effective competitive constraint on Cérélia’s pricing of PL products, thereby placing less emphasis on simple market share considerations. However, it is evident from the long list of factors at play here that the CMA is entitled to considerable discretion when making this assessment, and we cannot say that it was unreasonable to draw the conclusion that it did and not make further specific enquiries. Cérélia’s argument about the existence of Bells’ spare capacity is contentious in its own right, and also addresses only part of the picture that was relevant to the CMA’s deliberations on this point. There was sufficient information for the CMA to conclude that Bells’ spare capacity was only a limited competitive constraint for the reasons set out in the Decision. Bells had left its options open and naturally would want to see how its new contract would develop before taking a decision on whether to explore taking on any new large contract.”
“169. It also bears mention that the CMA is entitled to take into account the commercial motivation of competing suppliers when addressing their submissions on SLC concerns. In contrast to customers, who generally have a direct interest in avoiding an SLC, rival suppliers would stand to gain from any relaxation in competition in the market in which they are also sellers. This is not to suggest that Bells took a strategic approach to its responses to the CMA, but it does justify the CMA in taking a more rounded view of the evidence it received from competitors to the post-Merger firm.”
“171. Cérélia also stressed that the actual constraint on Cérélia’s PL business from alternative competitors would comprise the sum total of the constraints offered by Bells and Henglein combined. We agree. However, since the CMA’s assessment of neither constraint was obviously irrational or wrong, this does not change our conclusion.”
“175. Having reviewed all the arguments in relation to Ground 1A, the Tribunal dismisses this Ground which was a root and branch attack on significant aspects of the Decision. The CMA gathered a great deal of information and evidence for its assessment and carefully weighed the evidence that it had gathered. Whilst on some aspects it may have been open to it or a reasonable decision maker to take a different view on certain aspects, it did not make any error of fact or law. In dealing with Ground 1A the Tribunal has reviewed both the various sections of the Decision and the underlying evidence that the parties have referenced for its consideration.”
“if you were to switch to an alternative supplier of private label products, who would you switch to? Please indicate their suitability and provide reasons for your choices”
“Have you considered switching away from/to Cérélia for the supply of private label products in the last three years? Why/why not? Please also include in your response whether you have considered sponsoring entry and if so, how this would work in practice”
“We provisionally conclude that PL suppliers, individually and in aggregate, exert only a limited competitive constraint on Cérélia, and even less of a constraint on Jus-Rol given the branded nature of its product.”
“170. As regards Henglein, the factors behind this assessment are different but again, we do not find that the CMA’s conclusion was unreasonable. The Decision showed that Henglein had become a less active supplier to the UK since Brexit. Although Cérélia cited its very large total DTB capacity relative to the size of the UK market, that alone does not address legitimate questions as to how much of Henglein’s capacity it would choose to devote to supplying UK customers, or indeed the extent to which those customers would perceive the logistical complications of depending on a supplier whose production was based outside the UK. This is not to say that all the indicators around the threat from Henglein as a PL supplier pointed unequivocally in favour of the CMA’s assessment, but the criticisms raised by Cérélia come nowhere close to proving its case to the requisite standard for establishing irrationality.”
“The Inquiry Group has decided that the reference period should be extended by eight weeks under section 39(3) of the Act as it considers that there are special reasons (set out below) why the final report cannot be prepared and published within the reference period. The revised reference period will expire on24 January 2023 . In taking this decision, the Inquiry Group had regard to the complexity of the inquiry, the need to consider the issues raised by the Parties and by third parties, including the broad scope of the submissions made by the Parties in response to the Annotated Issues Statement and Working Papers and the need to reach a fully reasoned final decision in the statutory timeframe. The Inquiry Group considers that completion of its investigation and the publication of its final report will not be possible within the original reference period.”
“In particular, we note that the CMA has received a substantial volume of representations from the Parties in response to the [AIS] and [WPs]. This includes the submission of two additional Frontier Economics Analysis models regarding entry and expansion and the quantitative analysis of input foreclosure, both of which were received on 13 September (following a request from Cérélia for an extension to the original deadline). We also note that Cérélia requested, on repeated occasions, during the main party hearings held on 6 September that the CMA should critically appraise its evidence on its file from third parties, to address what Cérélia perceived as a risk that certain ambiguities in that evidence could have been misconstrued. We believe that our statutory duties require us to consider this evidence and these representations carefully, including by engaging with further evidence-gathering with third parties (which, as noted, possess their own rights of due process) where appropriate.”
“(1) The CMA shall prepare and publish its report under section 38 within the period of 24 weeks beginning with the date of the reference concerned. …. (3) The CMA may extend, by no more than 8 weeks, the period within which a report under section 38 is to be prepared and published if it considers that there are special reasons why the report cannot be prepared and published within that period.”
“The section permits the CC to extend the 24-week period for the report for one further period of no more than 8 weeks where it is satisfied that there are special reasons for a delay. The section does not further define ‘special reasons’, but it is anticipated that they would include matters such as the illness or incapacity of members of a reporting group that has seriously impeded its work, and an unexpected event such as a merger of competitors.”
“319. Ideally these features would have been more explicitly particularised and dealt with by the CMA, whether in the extension notice or in correspondence with Cérélia and that might, perhaps, have addressed Cérélia’s objections at the time. Nevertheless they support the proposition that this was an unusual case in terms of how little common ground there was at that stage of the inquiry. It was both necessary and appropriate for the CMA to carry out the further investigation and analysis that it in fact did. No doubt Cérélia would have criticised it if the CMA had not. 320. The fact that, in the event, the CMA conducted the Further Consultation into matters raised and particularly the issue of alternative competitive constraint involved the further testing of the CMA’s thinking and Cérélia’s responses in a way that partially (albeit ex post) justified the extension.”
“special” and “if it considers”
“(5) The Competition Appeal Tribunal may— (a) dismiss the application or quash the whole or part of the decision to which it relates; and (b) where it quashes the whole or part of that decision, refer the matter back to the original decision maker with a direction to reconsider and make a new decision in accordance with the ruling of the Competition Appeal Tribunal.”
"…however wrong they may be, however lacking in jurisdiction they may be, they subsist and remain fully effective unless and until they are set aside by a court of competent jurisdiction."
“… the emphasis ought to be on the consequences of non-compliance, and posing the question whether Parliament can fairly be taken to have intended total invalidity”