1. Fantasy/Just Energy Overview of hypothetical case study

2. Introduction This introduction talk: Gives you some basic facts Suggests what you might want to be thinking about during the sessions Remember: THERE ARE NO RIGHT ANSWERS

3. Who are we talking about? Fantasy Beverages no. 1 bottled water company ($7.5bn sales) Emerge energy drink (2 in segment – 15%) buys (for $500 million) Just Energy ‘Thrive’ brand (1 in segment – 65-70%)

4. What are we talking about? ‘energy drink’ – drink with energy boosting ingredients Are other beverages substitutes? because of who buys it? because of the way it is sold? because of who sells it? what about the way it is made?

5. What is your theory of harm? Unilateral effects? Parties have around 80% of energy sales Around 25-30% of ‘functional beverages’ BUT only around 2% of all refreshment drink sales  Fantasy is big in water: but increment in all drinks is small

6. What is your theory of harm? Coordinated effects? How to assess Are the criteria met?  Ability to co-ordinate  Incentive to co-ordinate  Durability of co-ordination

7. Other suppliers…. Pure Beverages (Bom Dia) very recent entrant: but 7% share in 10 months (deep pockets) cost of entry: about $80 million Regional/niche suppliers Convenience/Supermarket own label very small but growing

8. So, things to think about Ease of entry & expansion What about countervailing buyer power? Branding strength What do third parties say? Do they have their own agendas?

9. So block it then …? 65 +15 =80! BUT …is it only 80% of 2%? …will 80 be 80 in a year (or two)? … is 80 a meaningful figure anyway?

10. If blocked, what remedies? Complete prohibition? Structural or behavioural remedy? What to divest? To whom?

11. Evidence materials Independent (eg news/analysts reports) from the parties at the time of the merger (eg Board presentations) to support the clearance application notes of meetings with your agency from competitors barriers to entry

12. ICN Merger Workshop Program designed based on ICN work product Moderators will be on hand plenary introduction to each session breakout sessions YOU have 2 days to decide