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NON-CO28 JANU
BRU-#776
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ONFIDENTIAUARY 2015
6931-v1
PROPOSE
bmission setsart of the CMits Decision
he CMA in pa2015.
ubmission, wse 1 processse to the Issu
ce is also mening Letter
xecutive s
he Anticipatessening of co
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here are no pecifically, int
ajor retailers
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AL VERSION
ED ACQUIS
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s out the initiMA’s Phase 2of 19 Decemaragraphs 25
we have conss – in particuues Letter of
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summary
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rties are notPlay range at brand positt purposes.
rties don’t co
are other supY (including p
N
SITION OF
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ial views of R2 investigatiomber 2014 (th5-26 and Ann
solidated anular the Merf 3 Decembe
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F K-Y BRA
UBMISSIO
Reckitt Bencon. In doing he Decisionnex B to the
d built open rger Notice or 2014 (Issu
ded with RB’
Y brand by Rent market in t
s the effectsand retailers er, within thehem is limite
ntry into suption channel
power [].
ad to any ad
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AND BY RE
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kiser (RB) inso we respo
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eckitt Benckthe UK. []
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A
n respect of tond to variouparticular regse Two Open
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onal lubricantn 5 below).
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BENCKISE
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RB to the CMrger Notice
C of the CMA
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te with each
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MA during ) and the
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ubstantial
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NON-CO28 JANU
BRU-#776
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6931-v1
ackgroun
ummary
B is a globarand from SSmed at enhaunches, form
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B is organisxchange. R6,000 people
B is a globaygiene, homeas 106 brandanufacturing
ome of the algon, Dettol
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B has sough013 [] andtroduced new3 2013 and 014.
AL VERSION
d on Reck
al consumer SL in 2010. ancing the p
mulae and pa
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al consumere, food and pds, includingg sites across
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18 months o Since then
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pleasure of sackaging.
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r goods compharmaceutic
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NON-CO28 JANU
BRU-#776
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AL VERSION
In late 2014,ct from the we
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BRU-#776
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ONFIDENTIAUARY 2015
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AL VERSION
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NON-CO28 JANU
BRU-#776
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6931-v1
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AL VERSION
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BRU-#776
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ONFIDENTIAUARY 2015
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AL VERSION
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6931-v1
Relevant m
ummary
B believes ththe supply
roduct type
here is a sositioning annhancement oth types of l
ome brands owever, RB’
esult of suffieutrally, featroducts can at some cons Yes! and Wuring sexual ategories.
its Phase 1 ay not form p
) Some v
) Private retail chparties’ positionsales inproduct
ales channe
he unusual nelevant markee general pbricants are onsiderable r
ll sales chanf the same m
) The cochannel
AL VERSION
markets
hat the approof lubricant
ignificant amnd use of dif
products anubricant prod
are therefos view is thacient supply
turing characbe supplied
nsumers viewWoohoo! or activity such
Decision, thpart of the re
vaginal moist
label produchannel in par
products (foning to K-Y) an those retailes account fo
el
nature of lubet. Lubricanpopulation a more likelyroom for the
nels – grocemarket for the
onditions of ls. [].
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opriate markets to wholes
mount of diffferent formund is recognduct to their
re significanat all lubricay and demacteristics of across the d
w various prosome of th
h as Sylk) as
e CMA suggelevant mark
urisers are m
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bricant produts are not no
and are pury to be a comarket to gr
ery retailers, e following re
supply and
7
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fferentiation ulae. This isised by privacustomers.
ntly differentiants are proband side su
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much closer c
e strongly wiey are aimedBoots’ functi
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ith the partieat closely coonal productively. They Those retaiants but, in a
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, specialist a
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ONFIDENTIAUARY 2015
6931-v1
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AL VERSION
mers increasse, there arls and often more potenwell-being (Sshopping is ortable buyie proportion cy chains all).
duced stigman Summers cives (includin
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gnificant degre are three ricants:
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nal lubricantsex. They alactivity (alththin the NHS
re enhancinge of sexual aed in a colos, warming o
act that lubrico different cot. The reay between thes (for examgories by onbrands (e.g.
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ntial sales chSWB) produ
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rea of overla
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etween typeoisturisers, f
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ence suggesy retailers ore in the groc
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ant product. bricants and
ort of vaginad will typicall
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NON-CO28 JANU
BRU-#776
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ONFIDENTIAUARY 2015
6931-v1
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AL VERSION
er brands thaerent applica
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NON-CO28 JANU
BRU-#776
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ONFIDENTIAUARY 2015
6931-v1
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AL VERSION
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also addresurisers notedlevant as suof prices rat
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ey are not c
recommendationclude function.uk/Livewell/wom
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sion – not leis significant
widely stockebranded comy chains. In, Rephresh,
en data ([]bstitutable w
the parties’ oser competn some reta
n the shelf wi
oblem solvingveryday reliee marketing ylk8, which ada medical pro
perience of umonth, whe
ylk more eco
Y Jelly uses 5
er product in r comfort.”
ss the differd by the CMAbstitution beher than sim
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ns for products al lubricants (sumen4060/Pages
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aragraph 43 ey offered forhese productn the same m
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s on this poinY than Durex both produc
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moisturisersmay be var
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ch could be desent 23%
consider moiY.
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me way thatng sexual intects: a good es ([]). Inparison betw
that a 42g tuubricant lastsnts.”
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6931-v1
rands are noey are in the
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ubmissions
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AL VERSION
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of private lab
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ompetition aon of product
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AL VERSION
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6931-v1
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6931-v1
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6931-v1
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AL VERSION
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6931-v1
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ONFIDENTIAUARY 2015
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B understandvantage of pr medical-typom alternativ
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emand-side bove, for co5% of mass sit an onlinenline channe5% and 20%ompared to 2
ubricants are
ubricants areurchase dueide range of hen comparequently onfferences in,eems to be s
].
sizeable proo)
a recent subricants in thome adult stoeriod in quesould switch ddition, one ith those in tonths (not a
urvey, nearlyurchasing.24
footnote 13 couple of ot
AL VERSION
nds that somproducts avape products ve supply rou
shopping an
l shift to onlin
factors poinnsumers, mmarket retai
e retailer in el’s value of
% annually. W25% currently
e particularly
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red to purchline than th, for exampleomething tha
oportion of b
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or a significandoms, lubrk and mortarofile of cons
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sumers that ups.23
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rsue “grey mach may be issues arou
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umers that ced online butuency of purcsought inform
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rket retail. Acommon in
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ould like to uscommonplace
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esponses to esponse to thWhich shops esponse is phoppers are s
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AL VERSION
these questhe question o
would you cprovided as summarised
nels conside
alist store
alist website
on
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market webs
website
e telling and mortar masse. Amazon were websitfact that con
mortar masslubricants (Rbecame mor
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those that he past but ohe offering ofould be well-sed SWB prmmers onlin
ne and online
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indicate thas market retawas also a tes operatednsumers regs market ret
RB suggests tre expensive
gests that oucts at pharwere considonly 44% haffline were to-placed to mooducts onlin
ne (amongste offerings.27
19
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arket
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have purch% at superme SWB buyed them onlin a sizeable nrchases onlint Amazon, 5ving them p
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m?”, the detaortar superm
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6%
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purchase lubom a speciaa third of sup
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products onl18% at drug65% had psting that, if urrent offlineer, of those t7% Boots oncasions on
vided the question
btained in pharmacy
bricants in alist store permarket strongly
ternatives planning
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AL VERSION
carried out be important in
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mers identifiedt consumers
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ve is particulho have not
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t and considchannels, mbricant. This, which may
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s surveyed thfuture, most s
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hopping);
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the low penconstitute th
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ned with theopping opporbeauty shoppricant purcha
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at it is discre56%);
but were inte%); and
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es of lubricanof the populagrow. In genity of online
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ho buy (or moffers and woe alternative rtunities to s
upport a narroe evidence f
d are typicaler in paragranclusions drmay be boua whole. [
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probably never buy
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6931-v1
dded anonymf the stigma reets and in
he suggestioarket retail crice increaseore generalloted above, he evidence rectly contras this, only nprofitable anetailers mayhen respondroposed by th
ormalisation
paragraph ompete with believe in rovehoney. Rconsiderabl
uch as Ann his is also stummers and
B has evidediminished stura of respec
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AL VERSION
mity.28 Even through the
out-of-town
on by third pconsumers oe, is not crely about grolubricants aavailable to
adicts these s[] have
nd require a y have inadvding to the Che CMA is no
of adult sho
75(b) of theadult storesrespect of hRB’s experiey less than wSummers orongly linked the online s
nce to supptigma in visitctability”.29
nalysis
ortant to noelatively low c
just groceryhis responsentage of matake advanta
mers who pls consumerswho could e
N
adult storese appearancshopping ce
parties, sumof lubricants dible. Perh
ocery producre not like mRB in relatiosuggestions to switch inbroader def
vertently conCMA’s questioot appropriat
ps
e Decision, t. Whilst thisigh-street chnce is that awas tradition
opening brand to the rise opecialist Lov
port this viewting”. Ann S
te that the critical loss wy retailers ane, if a 5% priass market age of likely s
lan their pus shopping veasily visit a
21
s constitute ace of, for exntres, as not
mmarised in would not sw
haps this comcts or weeklymost groceryon to SWB pmade by thi
n order to finition of thensidered theon. In any cte on this ba
he CMA refs may be truehains such aany stigma anally the casnches in higof online salevehoney taki
w. [] acceSummers was
prevailing vawould necessnd national pice increase retail consusupply side
rchases havvia the websnother webs
a viable alternxample, Ann ted further be
paragraph 7witch to onlinmment was y shopping
y products aroducts geneird parties [make a hyp
e relevant mae average cocase, segmesis.
ers to a viewe of some inas Ann Sumassociated wse, especiallyh streets anes describedng a significa
eptance of ss noted to be
ariable profitsitate a definpharmacy chwere implemmers to swchanges, thr
ve many opsite of majorsite; it also i
native. TheySummers s
elow.
75(a) of the ne channels being madebaskets. Hnd are not perally, and lu]. In additipothetical prarket (see paonsumer or
entation of th
w from retaidependent a
mmers or onlith visiting a y given the tnd out-of-towd above, withant role in the
ex stores one “more com
t margins foition of the rehains. [].mented, RB
witch channerough some
pportunities tr retailers anncludes con
y may have lstores on m
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e based on owever, as
purchased frubricants in pion, in a marice increas
aragraph 4.6even all co
he relevant m
ilers that theadult stores, line retailersspecialist ad
trend of majown shoppingh brands suce market.
n the High Smmonplace –
or personal lelevant mark Given the might expec
els for their or all of the
to buy onlinnd national pnsumers who
ost some many high
hat mass e to a 5% evidence we have
requently. particular, rket such e of 5% 7 below).
onsumers market as
ey do not it is hard
s such as dult store or chains centres.
ch as Ann
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ubricants ket that is evidence
ct a much lubricant following
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ONFIDENTIAUARY 2015
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grocery lubrican
) Some cfrom a street sproximiteasy (ethis prod
) [].
) Suppliefrom onthat pric
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he relevant ersonal lubric
B is active ats buyers fromeir orders cend mortar ouimilarly, the ortals of the ml targeted at
].30
AL VERSION
retailers or nts from, onli
consumers wgrocery reta
specialist adty to one an
especially forduct).
rs in the onlne channel toces were to r
scope
geographic cants in a nu
t the wholesam the larger centrally and utlets, RB hamajority of mass markecustomers in
N
national phne retailers s
who purchasailer or nationult stores s
nother on ther planned pu
ine and aduo another anrise in the gro
area of oveumber of othe
ale level. Suchains of supdistribute th
as no controlsales condut retailers ann the UK.
22
harmacy chasuch as Ama
e lubricants nal pharmac
such as Anne high streeurchases, wh
ult store channd more migocery retailer
erlap is the er jurisdiction
pply at this lpermarkets a
he products tl over whereucted througnd a number
ains and whoazon.
in urban arecy chain to in Summers. t or in shophich constitu
nnels have sht be expectr / national p
UK, althougns.
evel is typicaand pharmacto their store
e, within the h the onlineof larger onl
o also visit,
eas have thendependent These sto
ping centresute the majo
shown how itted to seek tharmacy cha
gh RB is act
ally conductecies, as well es themselveUK, its produ
e channel arine retailers.
or already
e ability to spharmacies
ores are all s so that swority of purch
t is possibleto do so in tain channel.
ctive in the s
ed on a natioas wholesales. In termsucts appear re through th. These web
purchase
substitute s or high-
in close witching is hases for
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supply of
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he online bsites are
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ONFIDENTIAUARY 2015
6931-v1
arriers to
ummary
or potential n
a) no intell
b) obtainin
c) manufa
d) distributand
e) entry int
oreover, theupply of lubri
a) promotirequired
b) many bstore chand Sugateway
c) [].
d) Single pwider h(with at
ew supplier
here are nobricants.
terms of lubnow-how requt there are edical devicend fall into aersonal lubricut instead thotified Body.3485. This is
AL VERSION
market en
new lubricant
lectual prope
ng certificatio
cturing is str
tion is easy
to the online
ere are no sicants becau
onal spend d to build pro
rands are alhannels and perdrug choy to the supe
product suppealthcare promost two SK
entry
o particular
bricant produired to manno patents fe but this proa number ofcants fall into
he manufactu The Notifies a straightfo
N
ntry/exit
t suppliers, th
erty rights or
on as a medic
aightforward
to outsource
segment is
gnificant barse:
in this categofile (this can
ready knownsome, like Aose to have
ermarkets; an
pliers would oducts wouldKUs) does no
difficulties
uct ingrediennufacture theor the produocess is straf Classes. o Class IIa, furer needs ted Body will torward proce
23
here are no
significant k
cal device is
d and contrac
e and only a
particularly e
rriers to entr
gory is not n be done ine
n through BoAnn Summe
e a wider rannd
be able to d not createothing to cha
associated
nts, there are products (suct in generaaightforward. Class I devfor which it isto obtain a cthen audit co
ess.
barriers to en
now-how is r
straightforw
ct manufactu
small team
easy and cou
ry into the m
high and siexpensively u
oots and Supers, are alreange of produ
compete ane any barriersange the exis
with comm
re no intellecsome individual). It is nece
Medical deices can bes not necesscertificate ofompliance ev
ntry:
required;
ard;
rers are ava
of employee
uld be used t
mass market
gnificant mausing online
perdrug or thady generallyucts in store
nd RB’s ports. Moreoversting situation
mencing the
ctual propertyual products essary to obvices are regself-assess
sary to contaapproval fo
very one or tw
ailable;
es is require
to build bran
retail chann
arketing spenmedia);
hrough onliney well know
e and can se
rtfolio of lubrr, the addition.
supply of
ty rights or ss have relatedbtain certificagulated by thsed. The mact the MHRAor the producwo years ag
ed to sell;
d profile.
el for the
nd is not
e or adult n. Boots erve as a
ricants or on of K-Y
personal
significant d patents
ation as a he MHRA
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ONFIDENTIAUARY 2015
6931-v1
imilarly, suppwitch their prfferent produanufacturingre simply plabes or bottlether products].
here are exPasante Bulles Amazon) ased by a prosre plenty of cnly requires a
here is also n enter or exroducts are chich show thopen to a w
sible in retail
ntry to mass
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AL VERSION
pliers of oneroduction proucts altogeth
g of personaced into a ba
es that are bs, which impl
xisting manuet lubricants and as contraspective newcompanies ta handful of s
no need to gxpand in thisconducted onhat over one wide variety ol stores.
s market ret
try to the ma
ional spend ed, partly beduct, which mconsider it ap
ant marketinnew media
nts.31 [].
brand awae:
here are manther channe
n addition, th
n paragraph well-known bhis by noting
N
e type of peocesses to mher (if this f
al lubricants asic mixer anoxed for shipies that sunk
ufacturers su– available iact manufac
w supplier to hat can undstaff to be inv
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tail channel
ss market re
in this catecause of the
means that thppropriate, fo
g spend is nand the app
areness is n
ny brands thals). [].
here are bran
226 of the Drands of pe that Ansell’s
24
ersonal lubricmanufacture fits with the does not re
nd the resultpment. The k costs in the
uch as Pasin Superdrug
cturer for thirenter the ma
dertake the dvolved in sa
with the trad] a significthan offline: hases of lubrom brands t
etail channel
egory is note size of the here is a limior example, t
not required propriatenes
not a barrier
at are alread
nds that are g
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cant can easnot only othprofile of th
equire speciaant mixture isame basic
e production
ante that mg, adult storerd parties (suarket. Similadistribution oles and mark
itional brick cant proporti
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are not high
t high. Lubcategory an
it to how theyto promote lu
to build profs and effect
r to entering
dy well known
generally we
CMA is scecants in othees was de-lis
sily and inexer types of phe brand). alised equipms normally dequipment cof personal
manufacture es and majoruch as Tescoarly, on the df the producketing.
and mortar mon of sales
ample the [made online. er not availa
. In particula
bricant prodd partly becy can be proubricants at t
file, especialtiveness of o
g the mass
n to lubricant
ll known []
ptical of the er countries. sted by a gro
xpensively epersonal lubrThis is bec
ment; the indispensed dircan be usedlubricants ar
for their owr online retaio), and that
distribution sict. The supp
mass marketof personal
] survey res As such, th
able or not pa
ar:
ucts are nocause of the omoted (mostthe front of th
lly given the online adver
market reta
t consumers
].
prospects of The CMA
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xpand or ricant but
cause the gredients rectly into d to make re limited.
wn brand lers such could be
ide, there plier itself
t retailers lubricant
sults [], he market articularly
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potential rtising for
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ONFIDENTIAUARY 2015
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It(ic
) Boots arange otwo respromotinot necthroughBoots amass apseek a product
) K-Y onlyRB portpotentiaimplausreplacemore liklubricanthe shesuch, thto place
he CMA in iredible.
etailers will e
paragraph 2 retailers, the
eek to encoun buyer powexercising buyrands are noalling certainom ignoring c
urthermore, ihelf space toumber of SKrange of Sw
ble to replace
ot difficult for
AL VERSION
t is not cleancluding Anlear that Mat
and Superdruof lubricants spects. Firstonal space t
cessary to ha the mass m
and Superdruppeal and wisupermarkes including V
y adds one Stfolio. Any al for RB to sible that K-Y, at most, onkely that bont listings butelf. This comhe merger che in a retailer
its Decision
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227 of its Deere is limitedrage new ener, there areyer power inot “must haven third party competitor o
in a categoryo allow for thUs). For exa
woon producte individual S
r single-prod
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r to what thsell’s relatedtes remains a
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market retail cug in recent idespread di
et listing. ThVamousse, A
SKU (and a concerns abdeny such Y competesne or two sloth K-Y and t also with [mpetitive prehanges very.
raises a nu
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y as small ashe listing of aample, Bootsts. Even wheSKUs from th
uct suppliers
25
his refers and fast-growina very well-k
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Ashton & Par
maximum ofbout how thespace post-
s strongly wots that wouDurex lubri] healthcaressure ([])little in term
umber of po
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s personal lua new brands managed ten space is he Durex Pla
s to get listin
nd whether ang brand, Skknown brand
and beauty ran serve as entry to the brand) – a fly-advertisednumber of b). Second, Boots or Sup
as been follorsons and AF
f two, if bothe merger mimerger, seeith RB for Dld otherwisecants compere products t) will of cous of the num
tential barrie
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ubricants, it wd (particularlyto find an envery limited,
ay range.
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in the UK ([
retailers – chgateways tochannel (asurther demo
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mber of SKUs
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the categoryare “must ha
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would be easy a brand thtire shelf to a however, re
roducts werever, in any c]32). [].
hoose to havo the superms Boots did onstration of ore being abachieved listnd has demoould be well number of h
sizes are listeelf space ored. In fact, space as K
y Durex. Insty with other er could also post-transacs that RB m
None of t
y is of low imave”, retailert below in tht in this cateaddition, the
at retailers haata, suggeststhis category
sy for a retaihat only had allow for theetailers woul
e delisted case, it is
e a wider markets in
by giving how it is
ble to sell tings with onstrated placed to ealthcare
ed) to the give the it seems
K-Y could tead, it is potential place on
ction. As ight seek
hese are
mportance rs will not e section
egory and e parties’ ave been s that, far y.
ler to find a limited
e listing of d also be
NON-CO28 JANU
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5.10 Inofanbrpothdelisplatora
5.11 Sibrwiabth
RB
5.12 PaavprablisprsuheHethth
Th
5.13 Fidranchofbuch
33 http://ww34 http://pro35 http://ww
ONFIDENTIAUARY 2015
6931-v1
paragraphs f needs for pnd terms andrand, makingoints made ie points aboeterrence mestings in the acement are earn a certa
ange of produ
imilarly, the rand/single-pith suppliersbility to struce position m
B’s portfolio
aragraphs 23vailable to Rromotional fuble to match.stings in Booromotion in tuppliers succealthcare caterbals35. Morough mass at K-Y has) d
he whole cat
nally, in parriven by the nd national phannels, the f growth for tusinesses. Inhannel is itse
ww.manflu.com/ofoot.co.uk/. ww.pottersherba
AL VERSION
228-229 of romotional pd conditions g it particularn this submiove regardinechanism sumass marke
e typically coain margin, itucts. Retaile
presence oproduct supp that have a
cture terms aaterially.
of products i
32 of the DeRB will allounding to ma. However,
ots and Supethis categorycessfully comtegory more oreover, if thmarket retai
does not see
tegory is grow
ragraph 234 online segm
pharmacy chaCMA’s commthe grocery rn addition, it elf growing at
/.
als.co.uk/.
N
its Decision, payments andacross their ly difficult forission in resng the low leuggested in et retailers isonsidered on t is certain thers have abso
of brands likpliers being aa broader raand condition
is not a barri
ecision suggew it to benss market rethis has not
erdrug (as noy. There armpeting agai
generally. Re concern isilers, the addem likely to m
wing
of the Decisment and thuains. Whilst ments fail to retailers and
ignores thet around []
26
the CMA refd a potentialrange in ord
r single-branpect of buyeevel of promparagraph
s not clear. a product-b
hat RB is simolute discret
ke Yes! andable to enterange. Moreons as sugge
er
ests that, sonefit from eetailers that oprevented s
oted above).re also maninst larger sRecent exam
s more broaddition of one materially alte
sion the CMus such grow it is true thatake accounnational pha
e fact that the]% per year.
fers to difficu ability of RBder to deter ad suppliers. er power andmotional acti
229 to prevHowever, g
by-product bamply not in a p
ion to determ
d Woohoo! r the mass mover, even i
ested, it is ha
mehow posteconomies oother single-single-brand . This is noty examples uppliers that
mples includedly about RB
or two SKUser RB’s posit
MA notes thawth may not at online salent of the fact tarmacy chaine grocery re
ulties in obtaiB to structurea retailer froAgain, the C
d “must havevity in this cvent third paiven that listasis, where eposition to im
mine which b
in Boots is market retailf (theoreticaard to see h
t-merger, theof scope anproduct thirdlubricant supt surprising gof single pr
t offer a range Manflu33, P’s wider ports (the maximtion vis-à-vis
t growth of tinduce entr
es are growinthat online sans, all of whitail and nati
ining listingse prices, conm switching
CMA is referre” brands, acategory. Tarties from tings and sheach SKU ismpose termsbrands they li
evidence ol channel to
ally) RB did ow the merg
e portfolio of nd provide ad parties wouppliers from given the lowroduct / singge of producProfoot34 andtfolio of prod
mum numbers the retailers
the categoryry in groceryng faster thanales are a mich have majonal pharma
because tributions to a new
red to the as well as The exact obtaining elf space
s required across a ist [].
of single-compete have the ger alters
products additional uld not be obtaining w level of gle brand cts in the d Potter’s ducts sold r of SKUs s.
y may be y retailers n in other
major area jor online acy chain
NON-CO28 JANU
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6 C
Su
Thanrere
(a
(b
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6.2 Th
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6.5 ReThlev(w
6.6 Atre
6.7 [copo
ONFIDENTIAUARY 2015
6931-v1
ountervai
ummary
he major retand well-deveetailers (particemain relevan
a) Retailerproduct
b) Durex aretailers
ressure on s
ass marketophisticated ith suppliers.
hreats do not
]:
) [].
) [].
) [].
n a related price increase
etailers havehis is the coverage its b
which, even if
t paragraph 2eferring to pri
], buyer poondoms marosition at the
AL VERSION
ling buye
ailers are witloped buyingcularly the trnt and attrac
rs use all toos and at a br
and K-Y ares and there a
suppliers
t retailers and well-dev. [].
t always hav
point, in para in respect o
e many optioontrary of thebargaining pf correct, will
249 of the Dvate label pr
ower in the rket – a mar time, and re
N
r power
thout exceptg strategies. raditional mactive, as follow
ols available roader categ
not “must hare several cr
are withoutveloped buy
ve to be expli
agraph 244 oof Durex lubri
ons at their de CMA’s su
position in ol not change
ecision, the roducts in ne
SWB categrket where Detailers earne
27
tion large, we In the expe
ass market rews:
([]) to put gory level. [
have” brandredible altern
t exception ying strategie
icit. [].
of the Decisioicants in 201
disposal wheggestion at
other producas a result o
CMA suggesegotiations w
gory was coDurex has a ed similar ma
ell-resourcederience of RBetailers) to ju
pressure on].
s. They arenatives, such
large, wees which ha
on, the CMA 3. This is no
en seeking toparagraph 2
cts within itsof the transac
sts that they with RB. This
onfirmed by well-recogn
argins.
d organisatioB, there is coustify listings
n suppliers in
e not even lh as Ann Sum
ell-resourced ve buyer po
suggests thot correct: [
o put pressu246 of the Ds portfolio toction).
do not haves is not RB’s
the OFT wised brand,
ons with sophonstant press
and ensure
n relation to i
listed in all smmers. []
organisatioower in their
hat RB implem].
ure on suppliDecision thato personal l
e evidence ofexperience (
when it lookehad a stron
histicated sure from products
individual
stores by .
ons with dealings
mented a
iers: []. t RB can ubricants
f retailers ([]).
ed at the g market
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M
6.8 Inbrason(p
6.9 Fuarpetolu
6.10 Ththbepawosuhath
6.11 Thimlu
6.12 FiincmcoHetoat
36 [].
ONFIDENTIAUARY 2015
6931-v1
ust have br
its Decisionrands. RB ds well-knownne would exparticularly in
urthermore, re not “mustenetration an lose custombricant brand
he charactere CMA has ecause the carticular valuould have stupplier in resave”, the retae Anticipated
he reality is mage. Lubric
bricants as a
nally, the Dcreased maade in mor
ompetitive efere it sufficeday (which it most 2 SKU
AL VERSION
ands
n, the CMA sisagrees with
n and crediblxpect all sto smaller and
even if Duret have” prodnd frequencymers if they d). [].
rization of Duexpressed t
category is sue on specifictrong incentivspect of the “ailers’ abilityd Acquisition
that retailerscants are alsa category: [
Decision sugrket power,
re detail in ffects of the es to say thas disputed),
Us - to RB’s e
N
uggested thah this assessle brands to
ores of a pad convenienc
ex and K-Y wucts. This is
y of purchasedo not stoc
urex and K-Ythat retailerssmall. If thec brands. If,ves to use b“must have” y to exercisen).
s care abouto relatively p[].
ggests in papost-mergerparagraphs merger and at, even if itthe propose
existing busin
28
at some retasment. Firststock [].3
articular retace store form
were “must hs not a majoe rates explack lubricants
Y as “must hs may not exe category i, however, thbuyer power brand (furthe
e buyer powe
t the price leprofitable for
aragraph 24r, vis-à-vis th
156 and 1RB respond
t were true ted transactioness.
ailers may vie, there are o6 Secondly,
ailer to stockats). [].
have” brandsor category fained above.
(much less
have” brandsxercise their s unimportahe brand is tto protect itsermore, if boer would not
evels of anyr them. They
45 that therhe mass ma58 of the D
ds to these pthat RB hadn will not cha
ew Durex andther brands t if the brand
k them but
s (which thefor retailers, As a result,if they do n
s is inconsistbuyer powe
nt, retailers ruly “must has position in oth Durex ant change ma
y product – iy do not, how
re is concerarket retailerDecision regpoints in deta
some form ange this po
d K-Y as “mthat would b
ds were “muthat is not
ey are not), l especially g, retailers arenot stock a
tent with theer against thare unlikelyave”, then thnegotiations
nd K-Y are traterially as a
it goes to thwever, need
rn about RBrs. This allegarding the ail in section
of bargaininosition, given
ust have” e at least st stock”, the case
ubricants given the e unlikely particular
e concern he parties
to place he retailer s with the uly “must result of
eir brand personal
B having egation is
potential 8 below.
ng power that []
NON-CO28 JANU
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7 C
7.1 [
7.2 Inthm
7.3 [
ONFIDENTIAUARY 2015
6931-v1
ounterfac
].
terms of thee counterfacarketing or p
].
AL VERSION
ctual
e K-Y businectual situationpromotional a
N
ess, althoughn, RB is awaactivity for th
29
h J&J will be are that K-Y e last few ye
much betteris a stagnan
ears ([]).
r placed to pt brand in th
provide a reshe UK, with n
ponse on next to no
NON-CO28 JANU
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8 C
Su
RBsu
(a
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In
8.3 Atdo[
8.4 InRBonwh
37 [].
ONFIDENTIAUARY 2015
6931-v1
ompetitiv
ummary
B believes tupply of lubri
a) The paproductdo theyinvestm[].
b) There aDurex awell as nationalcompeti
c) K-Y is nfocus fo
loseness of
urex personositioned at fferent purpbricant wherore closely wroducts readroducts, [].
]. Responales data from
ternal docum
t paragraph ocuments an].
its Issues LB’s internal dn a number hich the CMA
AL VERSION
e effects
hat the transcant product
rties are nos with differey compete c
ment and prom
are other supand K-Y, inc
suppliers al pharmacy itors to Dure
not a potentior J&J [].
f competitio
al lubricantsdifferent pooses. K-Y reas the Duwith productsdily available.37
nses from thm third partie
ments
145 of the nnexed to the
Letter Respodocuments isof these doA has misinte
N
saction will ts in the UK f
ot close coment functionsclosely in nmotion of the
ppliers whoscluding compalready activ
chains. Px or K-Y.
al competito
n
s and K-Y Joints on the
is positionerex range o
s in the please to consum
ird parties aes have been
Decision, the Merger No
nse, RB poins highly selecuments in terpreted the
30
not lead to for the follow
mpetitors: ts and are punegotiations e K-Y brand
se products apetitors activve in the maPrivate label
or to Durex.
Jelly are notspectrum o
ed clearly aof products asure enhancmers that a
are of limitedn incorrectly
he CMA wrootice show th
nted out in sective and flathe Decisioninternal doc
a substantiawing reasons
heir brands urchased by with retailer(which was a
are much mve in the onlass market l products a
RB is aware
t close comof personal as a functioare for pleas
cement categare more na
d value for thinterpreted b
ongly suggeshat the main
some detail wawed. Despitn []. RB hcuments.
al lessening :
are positiondifferent co
rs, especiallalso the case
ore closely pine and aduretail chann
are also de
e that the bra
petitors. [lubricants anal or problsure enhancgory. Accordatural substit
he reasons by the CMA.
sts that a nureference po
where the CMte this, the Chas set out
of competiti
ned differennsumer grouly given thee before the
positioned toult store chanel, especialesigned to
and was and
]. The brand are deslem-solving cement and dingly, there tutes to the
explained be
umber of theoint for Dure
MA’s interpreCMA continue
in [] of th
on in the
ntly, have ups. Nor e lack of
merger).
o each of nnels, as lly in the be close
d is not a
ands are igned for personal compete are other
e parties’
elow and
e internal ex is K-Y.
etation of ed to rely
he way in
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8.5 InindDuth
Ev
8.6 Insuraporeavluabm
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8.7 IncodissostoJe
8.8 Fu“mallua beco
Lim
8.9 InfuAsotmacpaparedifoc
38 It is clea
ONFIDENTIAUARY 2015
6931-v1
short, the Cdicate that thurex and K-Yere is a com
vidence of th
its Decisionuggest that Danges of persossible that espect to SWvailable databricant markble to submitarket testing
eneral statem
paragraph 1onsider K-Y splayed on omehow closore, says noelly are perso
urthermore, materially” theready set oubricant suchquestion of
ecause it suonsumer grou
imited range
a similar venction of thes a result, thether reason tarket as a wctual competaragraph 15articular storetailer stocksfferent positccasions, use
ar that consume
AL VERSION
CMA has failhey are closeY are perceiv
mpetitive dyna
hird parties
n, the CMA Durex produsonal lubricathe third pa
WB products, a. In particuket within thet thoroughly
g.
ments about
152 of the DJelly and Dthe same b
se competitoothing about onal lubrican
the point ine same and ut in section as K-Y andmarketing (
uggests that ups and diffe
is not eviden
ein, the come fact that a ney may regathan these a
whole, is a reltitive constra4 that all c
re bought Du. Moreover, tioning and es or even f
rs view the diffe
N
led to provide competitorsved as compamic betwee
attempts to ucts are the ant. Howeverties misundhave insuffic
ular, given the UK, RB doresearched
store positio
Decision, the Durex lubricabay of shelvors. Such ccompetition.t products, w
n paragraph have the sam4 above, the the pleasuralthough thathe product
erent usage o
nce of close
mments in panumber of gr
ard these braare the only lative assessaints imposeustomers whurex will be the fact thatintended us
for different s
erent types of lu
31
de evidence s. In particupetitors by con RB and J&
use selecteclosest com
er, none of tderstood the cient informahe lack of moes not conresponses i
on and functi
CMA tries toants to be pves in storescategorisatio. It only conwhich is not i
152(c) of me end-use ere are manre enhancemat, in and of ts are likely occasions).38
competition
aragraphs 15rocery retaile
ands as the “two lubrican
sment versused by one oho bought aentirely dep
t a customerses – may sexual partn
bricant as havin
from the intelar, the CMAonsumers an
&J with regar
ed responsesmpeting prodthese submis
questions, ation and themarket intellinsider that thn the limited
ion prove no
o reason thapart of the ss, this is evon, and posinfirms that Dn contention
the Decisionis an over-gy significant
ment lubricanitself, shoulto appeal t
8
53-155 of thers choose tomost closelynts stocked)s other non-lon the otheran alternativpendent on r may have bsuggest thaers. In any
ng different purp
ernal documA has failed tond by the indrds to person
s from its maucts to K-Y ssions are cor, as is a gerefore read gence availa
he third partid time availab
thing about c
at, because mame catego
vidence that tioning in thurex person.
n that the peneralisationdifferences t range of Dd not be dis
to, and are
e Decision so stock only
y competing” , but this is ubricants an
r. In particuve lubricant what other
bought both pt they wereevent, the d
poses ([]).
ments of the po demonstradustry; (ii) [nal lubricants
arket investiJelly in the
convincing. general probtoo much in
able on the ies would hable during th
competition
mass-marketory and that
the two brhe same areal lubricants
parties’ prodn. For all thebetween a furex. This ismissed as targeted at,
seem to be two lubricanin their storea partial vie
nd says nothular, the comproduct to lubricant braproducts – g
e buying for data referred
parties to ate that (i) ]; or (iii) s. [].
igation to retailers’
It is quite blem with to limited personal
ave been he CMA’s
t retailers they are
ands are ea of the s and K-Y
ducts are e reasons functional s not just irrelevant different
largely a nt brands. es (for no ew of the ing about mment in K-Y in a ands that iven their different
to in the
NON-CO28 JANU
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De8.
8.10 Fithdifretoacco
No
8.11 Thcocrm
8.12 Inarcoththar([
No
8.13 Cowismhepo
Th
8.14 Indeda
8.15 Inanelsprinccom
ONFIDENTIAUARY 2015
6931-v1
ecision is no14 to 8.17 be
nally, the CMere is a befferentiated
etailer stands produce twctually the competing.
o competition
he CMA’s coompeting witredible, giveneaning that i
paragraph re not expliconstraint ovee fact that the category are far greate]). These
o alteration t
ontrary to paill not materimall categoryealthcare caortfolio of pro
hird parties’ s
paragraphsemonstrate aata is inconsi
paragraph 1nd K-Y lubrisewhere, it rivate label pconsistent: iompetition wust be accep
AL VERSION
ot consistentelow.
MA’s analysnefit to a reproducts tha
s to maximisewo types of case that w
n between D
omments in th each othen that K-Y isit can never
156, the CMcitly played oer Durex by thhis comment and never haer implicit (anare set out in
to bargaining
aragraph 158ally alter they for retailertegory) and
oducts over w
sales data
s 160-162 oa lack of closistent and un
160 of its Decants as evdismisses m
products showf private lab
with K-Y. If tpted that priv
N
with the da
sis fails to taetailer, espeat are likely te sales from private labehere only tw
Durex and K-
paragraph 1er for promots not generarealistically r
MA notes thaoff each othehe “implicit thdirectly cont
aving used thnd explicit) tn greater det
g positions
8 of the Dece negotiating s (lubricantsthe addition
which RB neg
f its Decisiose competitionduly dismiss
ecision, the Cvidence that much higherwn by this da
bel products the CMA mavate label pro
32
ata that RB h
ake into accoecially whereto appeal toits limited ofl lubricants?wo products
Y for promot
55 and 156 tional activityally promoterequire more
at one mass er but suggehreat of furthtradicts othehe normal “lthreats that tail in section
cision, givendynamics b
s account forn of K-Y magotiates sup
on, the CMAon between sive.
CMA uses [there is sw
r levels of cata as evideare dismiss
aintains its voducts pose
has seen, as
ount the facte a limited r different cu
ffering. Why ? Contrary s are listed
tions
of the Decisy does not fied and has than minima
market retaiested that ither unilateralr points madevers” of theretailers can
n 6 above.
the size of etween RB ar only aroundakes very liply with reta
A dismisses Durex and K
] sales datawitching betwcommon pur
ence of a consed as a comview that Dua considerab
s discussed f
t that in orderange is offestomer grouelse would rto the CMAthey are un
sion in relatit with RB’s eonly (a maxal shelf space
iler acceptedis able to e
l investing inde about retaeir bargainingn and do us
the lubricanand the retaid 1.3% of tottle differencilers [].
evidence pK-Y. The CM
a on commonween the tworchase betwnstraint from mpetitive conrex is in combly greater co
further in pa
er to maximfered, in offeups. In doinretailers ofte
A’s interpretanlikely to be
on to Durexexperience.
ximum of) twce.
d that Durexexercise a d
n K-Y.” Leavailers not carg power, [
se to constra
nt market, thiler. Lubrica
otal retail salce to the ov
ut forward bMA’s treatme
n purchaseso brands. H
ween Durex private labenstraint, so mpetition wiompetitive th
aragraphs
ise sales ering two g so, the n choose tion, it is e closely
x and K-Y Nor is it
wo SKUs,
and K-Y degree of ving aside ing about ]. There
ain Durex
e merger ants are a les in the verall RB
by RB to ent of this
of Durex However, and [] l. This is must the th K-Y, it
hreat.
NON-CO28 JANU
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8.16 ThDe
[
Th
8.17 IncocoCMcrintwolac
Ot
Ph
8.18 ThwiremThgrfawhluev
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8.19 ThreshfroprpofaDupr
8.20 Sustodo
39 [].
ONFIDENTIAUARY 2015
6931-v1
he CMA is ecision. []
]
he parties’ pr
paragraph orrelation anompetition beMA ought toredible data ternal documould expect ck of price co
ther factors
hase 1 respo
he CMA’s coith gathering
etailers that sentions four his appears rocery retaileils to mentiohich the CMbricant prodven within the
helf position
he CMA is wespective shehelf space toom Durex prroducts (withositioned aboils to explainurex (whetherivate label) d
uch larger stores that offoes not sugg
AL VERSION
also wrong ],39 []:
rice correlatio
163 of the nalysis. RBetween pers
o accord it mand becaus
ments. Furththere to be orrelation is
onses from re
omment in pg robust thirdstock lubricagrocery retato suggest t
ers. Even if on that the thMA identifieducts includine unduly nar
in larger stor
wrong in paraelf positioningo the SWB croducts. K-Yh vaginal moove or closen why it is, ier that is nedo get positio
tores accounfer a limited
gest that ther
N
to dismiss
on analysis
Decision, thB accepts thsonal lubricamaterial weigse the story hermore, if co
at least a ctherefore tell
etailers may
aragraph 16d party evid
ant products ailers that hathat the CMAthe paragrapree largest n
d as being wng their ownrrow market d
res tells you
agraphs 168g of the part
category, retaY products aoisturisers an to the condf the produc
ext to the cooned next to
nt for a signifi range of lue is close co
33
the Nera A
e CMA has hat the pric
ants in differeht in its conit tells is c
ompetition wcertain amouling.
have been p
67 is perhapsdence in this
other than tave private laA received oph is represenational pharwithin the ren brands. Cdefinition ado
most about
8 and 169 ofties’ productsailers regulaare often pond pregnancdom shelf. Tcts are closeondoms or e
and near to
icant proportubricants, poompetition be
Analysis in p
been overlyce correlatioent product sideration be
consistent wiwere to exist b
nt of correla
partial and m
s indicative os case. Thethose of the
abel productsonly a partialentative of thrmacy chainselevant fram
Consumers thopted by the
competition
f the Decisios. Where retarly position ositioned witcy tests) wheThe CMA disely competinglsewhere) anDurex.
tion of sales otentially closetween these
paragraphs
y dismissive n analysis segments ([ecause the Cth the messbetween Dur
ation shown
misinterpreted
of the difficuere are more
parties – ins in paragrapl selection ofhe position fos, Boots, Supe of referenherefore hav CMA in its D
n to dismisstailers choosK-Y producth the femaleereas Durexsmisses this g, that K-Y ind why othe
of lubricantsse positionine brands. In
161 and 16
e of the partis only indi[]). That CMA lacks asage providerex and K-Y in the analy
d
lties it may he than three
ndeed, the Cph 56 of the of responses or grocery reperdrug and
nce – all stove alternativeDecision.
s the relevanse to devote ts on a differe intimate hx lubricants
[], but in is not locateer products (
s. []. In reng of Durex fact, as note
62 of the
ies’ price cative of said, the
any other ed in the then one
ysis. The
have had e grocery
CMA itself Decision. from the
etailers, it Lloyds –
ock other e options
nce of the sufficient rent shelf ealthcare are often doing so d next to (including
etailers or and K-Y
ed above,
NON-CO28 JANU
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wipr
8.21 Thbrwhex
Co
8.22 AtsurepaabprcopacoarshY,
8.23 [
8.24 [
Pr
8.25 Thabbefolatan
8.26 In
(a
(b
40 Consum
ONFIDENTIAUARY 2015
6931-v1
ith limited shroducts in an
he functionarands unlikelhen a pleasxisting functio
onstraint fro
t paragraphsufficient consesult, the paarties’ produbove. The Croducts (for ompetitor braarties’ produonstraints of re not), this helf space, re, to attract di
].
].
rivate label
he importantbove, in respe close compr a relativelytest MAT fignd Tesco ([10
response to
) The CMand incodata asdismiss percent([]).
) In paragon the g
mers clearly view
AL VERSION
helf space dn effort to rea
l offering of ly substitutesure enhanceonal segmen
om other su
s 171-188 of straints importies are cocts are diffeCMAs assesthe reasons
anded products. Furtherprivate labewould not imetailers may sparate cust
t role of privapect of the cpetitors to eiy high propoures from Ni0-20]%). [
o specific poi
MA’s use of tonsistent. A indicative ocompetition
ages of com
graph 181 ofground that t
w the brands as
N
devoted to luach a broade
K-Y and thes. 40 The paement categont. [].
uppliers
the Decisionosed by privansidered to
erentiated anssment also s already givcts that are rmore, the cl products a
mply that Duplausibly cho
tomer groups
ate label in thorrect markeither of Dureortion of eacelsen []):
].
nts made by
the [] saleAs explained of competitionn between Dmmon purch
f the Decisionthe overall m
very different [
34
ubricants, rer range of cu
e pleasure enarties know, ory is launc
n, the CMA sate label or be close co
nd do not counderplays
ven in sectipositioned t
conclusion fand competito
urex and K-Yoose to stocs.
he market haet definition. ex or K-Y anch retailer’s Superdrug (
y the CMA in
es data in pain paragraphn between D
Durex and prases are hig
n the CMA dmarket share
].
tailers are liustomers.
nhancement from their e
hed, it has n
submits that icompetitor
ompetitors. ompete in a
the competon 4 aboveto compete fails to recognor branded pY compete ck only differe
as been disc Most privat
nd, where offsales of per([20-30]%), A
the Decision
aragraph 17hs 4.36 and 4Durex and K-rivate label pgher for priv
ismisses privof private la
kely to offer
offering of Dexperience inno impact on
t does not cobranded proThis conclu
ny meaningftitive significa) and is toofar more closnise that, evproducts werclosely. In faentiated bran
cussed in somte label prodfered, privatersonal lubricaAsda ([15-25
n, RB submit
7-178 if the 4.37 , the CM-Y on the onproducts on vate label pr
vate label asabel persona
r highly diffe
Durex renden other markn the volum
onsider that oducts and tusion is wroful way as dance of priv
o dismissive sely with ea
ven if the core limited (wfact, given thnds, like Dure
me detail in ducts are dese label salesant (accordin
5]%) Boots ([
ts:
Decision is MA cannot rene hand, but
the other, wroducts than
s a relevant cal lubricants i
erentiated
er the two kets, that es of the
there are hat, as a ng. The described vate label
of other ch of the
ompetitive which they he limited ex and K-
section 4 signed to s account ng to the [10-20]%)
incorrect egard the t use it to when the n for K-Y
constraint in the UK
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ONFIDENTIAUARY 2015
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is low. (compriless impbecomethe partwhich thin the g20]% oaccordin
ther branded
or the reasonompetition were are ma
ompetitors hemselves ([
ven within ompetitors
ven if the CMuggestion tha
he CMA notbricants) and(grocery retanted). Accver 50% of etailers, somxample, Repuoted for thee largest vol
he CMA is wxplained abond some haxample, is sarket retailer
Waitrose comreater than oupermarkets
any event, ith its range ined forces wharmacy. Lecently, comunch of a film
AL VERSION
This is, howsing all typeportant to the much moreties would alhe CMA chogrocery retailof sales throng to the late
d competitors
ns already giithin separatny competitoave far clos]).
the grocery
MA confines at there are n
es in paragrd Superdrug ailers choos
cording to thsales of lub
me competitoplens – a moe number of umes of sale
wrong to dismove in sectionave a substasignificantly gr and is, in fabined. Saleor equivalen(e.g.: Balanc
moisturisersof pleasure
with Superdrovehoney h
mmenced salem in Februar
N
wever, not a res of channee analysis o
e important. so be signifise to adopt ler and natio
ough major est MAT figur
s
iven in sectiote channels ors active in
ser product o
y retailer /
its review tono real altern
raph 184(a) each choosee not to list se latest MATbricants throor brands anoisturiser – astores in whes will be in l
miss the relevn 4. These antial level ogreater thanact, greater thes of other bnt to the valce Activ, Rep
are not the enhanceme
rug in order tas also launes of a Fifty y 2015 base
35
relevant arguel) is the releof the compe
Indeed, on scantly lowerin the Decis
onal pharmagrocery retares from Nie
on 4 above, in this marken the onlineofferings to
national ph
o the grocerynatives to the
of the Decise to list a widsuch a wideT figures fro
ough the mand private laand Boots prhich a wide rlarger stores
vance of moiproducts are
of sales. Tn the value han all of K-Y
brands in Boolue of sales pHresh, Pas
only alternaent lubricantsto list a widenched its raShades of G
ed on the bes
ument in thisevant markeetitive positiosuch a mark. However, ion and priva
acy chains, aailer and nalsen ([]).
RB does notet. It is impo
e and adult one or othe
armacy cha
y retailers ane parties’ pro
sion that Boder range of range of co
om Nielsen (ass market abel performrivate label orange of prod that offer th
sturisers in pe often direc
The value ofof sales of Y’s sales in Aots alone acachieved b
sion for Life,
ative productss, similar in le range of itsnge of SwooGrey range ist-selling boo
s context. If et, private labon but other ket definition that is not thate label is aaccounting foational pharm
t consider it aossible to sestore chann
er of the par
ain channel,
nd national poducts is inco
oots (by far tcompetitors
ompetitors bu([]), these retail chann
m more strooutsell K-Y inducts is avaie wider prod
paragraph 18ct competitorf sales of RK-Y in any Asda, Morris
ccount for a vby K-Y in so
Biofem, Swo
s: in early 2ook and fee
s SWB produon products n Superdrug
ok of the sam
the whole Ubel productsbranded cothe market s
he frame of ra significant or approximamacy chains
appropriate teparate channels. Many rties than th
there are
pharmacy chorrect.
the largest rto both Dure
ut could do sretailers ac
nel and, withongly than Kn Boots. Thilable are mi
duct range.
84(b), for thers to K-Y in
Replens in Bone individu
sons, Sainsbvalue of sale
ome of the woon and Pju
2013 Ann Suel to those ofucts in this h in Boots a
g, to coincideme name.
K market s become mpetitors shares of reference presence ately [10-s overall,
to assess nnels and
of these e parties
branded
hains, the
retailer of ex and K-so, if they ccount for hin these K-Y. For he figures isleading:
e reasons particular
Boots, for ual mass ury’s and es that is individual r).
ummers – f Durex – igh-street nd, more e with the
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ONFIDENTIAUARY 2015
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nn Summersarties’ produchannel and aot, contrary ready have and, sometimenline). The Cre not capabith the partie
stings in the s
urther, the laaction in maores over thoots, Superdores keeps ass market r
ange is not a
he CMA’s attther competitst like many
ange of persespect. Ranomparing theompeting proompete head
loser compe
].42 [].
loser compe
-Y is consideoreover, the nd Replens.4
nd illustratesdeed, this ise Sylk webs
ompetitors h
paragraph 1ave significan
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AL VERSION
s, Lovehoneycts in retailerany supermato the CMAa customer-bes, through aCMA is incor
ble of constitues in Bootssupermarket
atest MAT fass market rehe last threedrug, Tesco apparent theretail channe
a relevant dif
tempt, in partors because
y competitorssonal lubricange does ne parties’ prooducts fill a d-on with Dur
titors than K-
titors to K-Y
ered as a meNHS recom
43 Such a res those bran reflected in ite comparin
have brand a
185(a) and (ntly higher b
well/women4060
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y and Replenrs that accouarket could c’s comment base, brand a separate rrrect to concuting a comp
and Superts.
figures from etailers. Fo
e years, Repand Asda.
e competitiveel.
fferentiating f
ragraph 184(e K-Y has tws. In fact, mnts than RBot, therefore
oducts with tparticular nicrex or K-Y (e
-Y have an im
edical prodummends K-Y Jecommendatnds that conthe marketing the produc
wareness
b) of the Decbrand awaren
0/Pages/sex-aft
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ns alone areunt for more credibly choo
in paragrapawareness
retail presencclude, basedpetitive consrdrug and ha
Nielsen ([or instance, Splens in MorRetailers’ pr
e threat that
factor as bet
(d) of the Dewo package smany brands B.41 Ann Sue, appear tothose of comche (e.g. org
even some of
mpact on RB
ct by its cusJelly for this tion is likely tnsumers areng materials ct favourably
cision, the Cness than ot
ter-the-menopa
e well-knownthan half of a
ose to stock ph 184(d), ‘nand distributce (e.g. Ann on market s
straint post-mave the pote
]) suggest Sylk appearsrrisons and ractice of triat many brand
tween the pa
ecision, to drasizes is extrecompeting w
ummers and o be a relempetitors. Mganic producf the “niche”
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stomers, suitepurpose alo
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CMA relies [her brands a
use.aspx
brands that all sales in ththem at sho
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that third-pas to have beBalance Actalling compeds represent
arties and com
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evant differeMoreover, oncts such as products).
n
ed to combang with Astrotly influence perceive as ant brands – paragraph 4
] to suggesand awarene
t compete aghe mass maort notice. Tcts. These the gateway
high-street ste, that these ese products pand rapidly
arty brands een offered tiv was introetitor brandst to the parti
mpetitors
tion betweenK-Y has oneactually haveparticular noentiating factnly a small n
Yes!). Mos
ating vaginal oglide, Sylk, consumer pbeing closesuch as a s
4.11 above).
st that Durexess of other
gainst the rket retail
These are products
y retailers tores and products compete
y through
can gain in Tesco
oduced in in a few ies in the
n K-Y and e product, e a wider te in this tor when umber of
st seek to
dryness. Senselle urchases
e to K-Y. ection on
x and K-Y brands is
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ONFIDENTIAUARY 2015
6931-v1
w. This is xample, is arands (includf lubricants urchases of l
he merger ha
addition, in e K-Y brandhat merger s
kely to be veubmitted. Farticular chahannels.
paragraph 1 Durex and ay suggest at category,
oss of poten
he Decision ss of potentiost likely eositioned.
he CMA appe merger Kerception thaight otherwis
&J plans to
].
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].
].
s far as RB nhancement
AL VERSION
not represea very well-kding ID and Sin the onlinubricant in th
as no impact
paragraph 1. Again, thisspecific effery little switcurthermore,
annel, but le
184(c) of theK-Y may be[]. The ato a particula
ntial compet
suggests, inal competitiontrant to th
pears to idenK-Y would at K-Y might se have been
enter the pl
n of K-Y as
is concernedsegment in
N
entative of aknown brandSuper Slik) hne and adulhe UK44).
t on brand loy
185(a) of thes is not necescts flow from
ching betweethe suppose
eaves open
e Decision, the higher in smount of shar brand, is e
tition
paragraphson as a resule pleasure
ntify two poshave enterehave enteredn. [].
easure enha
a potential
d, there are the UK, inclu
37
actual brand d which doeshave significalt store cha
oyal K-Y cons
e Decision, thssarily true. m this. Indeen the Durexed loyalty tothe possibil
he CMA sugome outlets elf-space to entirely at the
s 192 to 217,lt of the transenhanceme
ssible theorieed the plead has had th
ancement s
competitor
closer actuauding both t
awareness s not featureant brand awnnels (which
sumers or Du
he CMA sugHowever, ev
eed, to the cx and K-Y brao the K-Y brity of purcha
ggests that ththan the nudedicate to
e discretion o
, that the CMsaction. Thisnt segment
es of harm inasure enhanhe effect of D
segment
al competitorhose which a
in the UK: e. []. Si
wareness amoh account f
urex shelf pla
ggests that cuven if it werecontrary, it sands, as the rand does nasing the pr
he share of smber of braa particular
of the retaile
MA considerss is on the ba
of the mar
n this respeccement seg
Durex prices b
s already preare currently
Ann Sumimilarly, a nongst existinfor nearly h
ans
ustomers are true, it is hasuggests thate parties havenot imply loyroduct throu
shelf space aands listed inr category, aer [].
s that there masis that K-Yrket where
ct: either thagment, or tbeing lower t
esent in the y available o
mers, for umber of ng buyers alf of all
e loyal to ard to see t there is e already yalty to a ugh other
attributed n retailers nd within
may be a Y was the Durex is
at absent hat RB’s than they
pleasure nline and
NON-CO28 JANU
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ONFIDENTIAUARY 2015
6931-v1
specialist sstribution in
) [].46 [
) [].
) [].47 [
) []49 [
].50
AL VERSION
tores and a mass marke
[].
[].48
].
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number wht retailers. [
38
ich have alr]45. []:
eady obtaineed (or couldd in the futur
re obtain)
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ONFIDENTIAUARY 2015
6931-v1
onclusion
its Phase rospect that te basis that:
) Durex agrocery
) Neither shift in effects o
) Althougthreat fr
s demonstracorrect:
) Durex athat the
) There ipharmamore im
) There aor K-Y grocery brand a
) There a
) Retailersituation
) There is
or all these re
AL VERSION
n
1 Decision, the Anticipat
and K-Y are eretailers and
the prospecbargaining p
of the lost co
h it did not crom K-Y expa
ated in this
and K-Y are parties inter
s no relevacy chains. C
mportant, par
are many com(including pretailer or
wareness bu
are no signific
rs have buyen.
s no loss of p
easons, the
N
the CMA coted Acquisitio
each other’s d national ph
ct of new entrpower in fav
ompetition; a
conclude on anding its pe
submission
not close coract with reta
nt market cConsumers mticularly for p
mpetitors whrivate label national pha
uilt through th
cant barriers
er power and
potential com
CMA should
39
oncluded thaon may resu
closest comharmacy cha
ry or expansvour of RB) nd
this point, Rersonal lubric
n, the CMA’
ompetitors –ailers;
confined to smulti-channepurchases of
hose productproducts).
armacy chaihe online an
to entry or e
d exercise it
mpetition, wh
d clear the An
at it was its ult in a substa
mpetitors in thins;
sion nor the ewas likely t
RB may be ecant range.
s concerns
the products
sales througel shop, with f lubricant pro
ts are more cThese prod
ins or have d/or adult sto
expansion in
t. The merg
ether actual
nticipated Ac
belief that tantial lessen
he supply of p
exercise of bto be sufficie
eliminating a
are misplac
s are very d
gh grocery ronline sales
oducts.
closely positucts are eitha sizeable
ore channels
this market.
ger will do no
or perceived
cquisition.
there was aning of comp
personal lub
buyer power ent to count
potential co
ced and its
ifferent as is
retailers ands becoming m
tioned to eithher already consumer b
s.
othing to cha
d.
a realistic etition on
ricants to
(due to a teract the
ompetitive
findings
s the way
national more and
her Durex active in
base and
ange this
