Internal memorandum

20 June 2006 Case No: 34250 Event No: 378746

To: FILE Cc:

From: Kjersti Bjerkebo, Competition and State Aid Directorate

Subject: Privpak outlets - market shares where not a GKP or not 1st choice with regard to quality

1 PRIVPAKS OWN EXAMPLES FROM MARCH 2003 In Privpak’s letter of 18 March 2003, based on the grid submitted 9 December 2002, Privpak tries to show postal codes in Oslo where Privpak either could not find an outlet, had to settle for a 2nd or 3rd choice outlet or had to use an outlet not fulfilling the quality requirements of Privpak as 1st choice.

The examples have limited evidentiary value as Privpak does not mention which outlets were better, and which it could not use. In addition, at this stage Privpak also presupposes that all Post’s chain agreements have group exclusivity.

1.1 Outlet 5011 – Showtime

Privpak mentions Showtime, Kiosk/video, Waldemar Thranes gt ved apoteket, 171 Oslo, for postal code 0158 as an example of a postal code where Privpak has had to settle for a “2nd choice” outlet. There were alternatives “that are quality options for commission agents, but all these were non optional to Privpak since they are part of chains that have exclusive agreements with the Norwegian Post”. This outlet is still second choice for postal code 0158 and Privpak does not deliver any parcels in that postal codes.

5011 is 2nd choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 158 OSLO 6 9999 5011 0 0.00 0.00 161 OSLO 5 9999 5011 0 0.00 0.00 250 OSLO 23 9999 5011 0 0.00 0.00 253 OSLO 186 9999 5011 0 7.00 3.76

Privpak mentions that for postal code 0172, 5011, which fulfils Privpak’s quality criteria is 1st choice recommended. 5011 is first choice for the following postal codes:

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Postal Place Total 1st 2nd 3rd Parcels Market Quality code Parcels choice choice choice delivere share d 165 OSLO 191 5011 9999 0 52.00 27.23 3( 5010 2nd choice, 5011 3rd choice in 2002) 167 OSLO 30 5011 9999 0 14.00 46.67 3 (not first choice in 2002) 168 OSLO 276 5011 9999 0 256.00 92.75 1 169 OSLO 201 5011 9999 0 182.00 90.55 1 170 OSLO 422 5011 9999 0 262.00 62.09 3 (not first choice in 2002) 172 OSLO 422 5011 9999 0 333.00 78.91 1 173 OSLO 222 5011 5010 9999 176.00 79.28 1 174 OSLO 184 5011 5010 9999 140.00 76.09 1 177 OSLO 211 5011 9999 5010 136.00 64.45 3 (not first choice in 2002) 456 OSLO 256 5011 5010 9999 190.00 74.22 1 460 OSLO 118 5011 5010 9999 45.00 38.14 1

The average market share is around 67 %, as opposed to 44,5 % for all 1st choice outlets.

I also note that Norway Post covers this area with two PIS and two Post offices, located in postal codes 0164, 0461, 0172 and 0355 respectively.

1.2 Outlet 5010 Bislett Frukt og Grønt – post code 166 Privpak mentions outlet 5010 as one outlet which has been chosen as a “first choice recommended” for postal code 166 although it did not fulfil the quality criteria and although there were better quality options for outlets, but which were parts of the chains having an exclusive agreements with Norway Post. This outlet, which still appears to be active, is 5010, Bislett Frukt og Grønt, Theresesgt 16, 452 Oslo.

Per 21 February 2005, this outlet was listed by Privpak as first choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market Quality code Parcels choice choice choice delivere share d 354 OSLO 244 5010 5011 9999 160.00 65.57 2 358 OSLO 174 5010 5011 9999 187.00 107.47 2 450 OSLO 39 5010 5011 9999 2.00 5.13 3 (not first choice in 2002) 452 OSLO 180 5010 5011 9999 227.00 126.11 2 454 OSLO 143 5010 5011 9999 149.00 104.20 2 166 OSLO 163 5010 9999 0 44.00 26.99 2

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171 OSLO 397 5010 9999 0 229.00 57.68 2 356 OSLO 259 5010 9999 5011 73.00 28.19 (5037 first choice in 2002) 360 OSLO 155 5010 9999 5037 80.00 51.61 3 (not first choice in 2002) 451 OSLO 148 5010 9999 5011 62.00 41.89 3 (not first choice in 2002) 462 OSLO 101 5010 9999 5011 12.00 11.88 3 (not first choice in 2002)

The average market share of Privpak for this outlet where it is 1st choice is around 57 %, as opposed to 44,5 % for all 1st choice outlets. This outlet is not listed as a 2nd choice anywhere.

I also note that Norway Post covers this area with three post offices and three PIS, located in postal codes 0172, 0355, 0364, 0164, 0407 and 0461 respectively.

2 MARKET SHARES WHERE PRIVPAK IS USING A NON GPK

2.1 Outlet 5029 Jacobsen og sønn bokhandel (Bookshop)

Privpak’s outlet 5029 is Jacobsen og sønn bokhandel, Trondheimsveien 102, 0565 Oslo. (In 2003, outlet 5029 was Cafe & Spill Oslo, a “bookmaker” according to Privpak. This outlet had quality rating 1 where it was 1st choice outlet.) The bookshop is 1st choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 564 OSLO 154 5029 9999 0 37.00 24.03 565 OSLO 259 5029 9999 0 80.00 30.89 566 OSLO 224 5029 9999 0 77.00 34.38 568 OSLO 200 5029 9999 0 65.00 32.50 569 OSLO 153 5029 9999 0 77.00 50.33 570 OSLO 206 5029 9999 0 75.00 36.41 571 OSLO 237 5029 9999 0 64.00 27.00 572 OSLO 168 5029 9999 0 62.00 36.90 573 OSLO 144 5029 9999 0 68.00 47.22 574 OSLO 206 5029 9999 0 68.00 33.01 575 OSLO 275 5029 9999 0 79.00 28.73 585 OSLO 150 5029 9999 0 49.00 32.67

Average market share is 34,5%, as opposed to 44,5 % for all 1st choice outlets.

This outlet is 2nd choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share

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579 OSLO 6 9999 5029 5014 0.00 0.00 580 OSLO 241 9999 5029 0 48.00 19.92

2.2 Outlet 5104 Petra Frukt og Grønt ANS (fruit and vegetables)

Outlet 5104 is Petra Frukt og Grønt ANS, a fruit and vegetable outlet in Bankveien 4, 1383 Asker. This outlet is first choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 1371 ASKER 8 5104 9999 0 2.00 25.00 1372 ASKER 6 5104 9999 0 3.00 50.00 1383 ASKER 632 5104 9999 5301 318.00 50.32 1384 ASKER 575 5104 9999 0 244.00 42.43 1385 ASKER 854 5104 9999 0 213.00 24.94 1386 ASKER 527 5104 9999 0 230.00 43.64 1387 ASKER 806 5104 9999 0 272.00 33.75 1388 BORGEN 577 5104 9999 0 252.00 43.67 1392 VETTRE 527 5104 9999 5301 112.00 21.25 1394 NESBRU 680 5104 9999 5301 110.00 16.18

Average market share is 35,1 % as opposed to 44,5 % for all 1st choice outlets. This outlet is not listed as 2nd choice for any postal codes.

I also note that Norway Post covers these postal codes with three individual PIS, located in postal codes 1385, 1392 and 1394.

2.3 Outlet 5135 Bekketorget (fruit and vegetables)

Outlet 5135 is Bekketorget Sebahattin Ugur, a fruits/vegetables outlet in Gamle Ringeriksvei 3 b, 1357 .

This outlet is first choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 1340 SKUI 292 5135 9999 0 40.00 13.70 1356 BEKKESTUA 718 5135 9999 0 400.00 55.71 1357 BEKKESTUA 661 5135 9999 0 297.00 44.93 1358 JAR 1134 5135 9999 0 490.00 43.21

Average market share is around 39 % as opposed to 44,5 % for all 1st choice outlets.

This outlet is second choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 1359 819 9999 5135 0 70.00 8.55 1362 HOSLE 1039 9999 5135 0 308.00 29.64

2.4 Outlet 5159 Svarstad Libris (Bookshop)

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Outlet 5159 is Svarstad Libris (formerly Interbok), a bookshop in the Libris chain, located at Spydeberg Torg, 1820 Spydeberg. (Privpak previously used Stasjonsgata Sport & Kakao) a Café/kiosk.)

Svarstad Libris is 1st choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 1820 SPYDEBERG 1091 5159 9999 0 567.00 51.97

The market share is around 52 % as opposed to 44,5 % for all 1st choice outlets.

Svarstad Libris is 2nd choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 1816 SKIPTVET 790 9999 5159 0 23.00 2.91 1823 KNAPSTAD 284 9999 5159 0 35.00 12.32 1825 TOMTER 382 9999 5159 0 4.00 1.05 1827 HOBØL 309 9999 5159 0 6.00 1.94

2.5 Outlet 5301 Torghallen, Beer/Mineral water

Outlet 5301 is Torghallen which appears to be a beer/mineral water outlet located in Vaterlandsveien 9b, 3470 Slemmestad.

Torghallen is 1st choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 1390 VOLLEN 321 5301 9999 5104 97.00 30.22 1391 VOLLEN 358 5301 9999 5104 109.00 30.45 3470 SLEMMESTAD 1174 5301 9999 5104 519.00 44.21 3472 BØDALEN 774 5301 9999 5104 224.00 28.94 3478 NÆRSNES 254 5301 9999 5104 59.00 23.23

The market share share is around 31 % as opposed to 44,5 % for all 1st choice outlets.

Torghatten is 2nd choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 1389 HEGGEDAL 1281 9999 5301 5104 151.00 11.79 3440 RØYKEN 1078 9999 5301 5104 28.00 2.60 3442 HYGGEN 150 9999 5301 5104 5.00 3.33 3474 ÅROS 461 9999 5301 0 21.00 4.56 3475 SÆTRE 1201 9999 5301 5104 30.00 2.50 3477 BÅTSTØ 65 9999 5301 5104 7.00 10.77 3480 FILTVET 395 9999 5301 5104 8.00 2.03 3482 TOFTE 783 9999 5301 5104 7.00 0.89 3484 HOLMSBU 143 9999 5301 5104 3.00 2.10 3490 KLOKKARSTUA 279 9999 5301 0 9.00 3.23

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2.6 Outlet 5355 Tønsberg Frukt og Grønt, Fruit and vegetables

Outlet 5355 is Tønsberg Frukt og Grønt Jasim Mohammed Dara, a fruit/vegetable outlet located in Stoltenbergs gt 3, 3110 Tønsberg.

Tønsberg Frukt og Grønt is 1st choice for the following postal codes:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 3110 TØNSBERG 206 5355 9999 0 96.00 46.60 3111 TØNSBERG 203 5355 9999 0 111.00 54.68 3112 TØNSBERG 361 5355 9999 0 210.00 58.17 3113 TØNSBERG 287 5355 9999 0 76.00 26.48 3114 TØNSBERG 297 5355 9999 0 153.00 51.52 3115 TØNSBERG 325 5355 9999 0 158.00 48.62 3116 TØNSBERG 148 5355 9999 0 62.00 41.89 3117 TØNSBERG 707 5355 9999 0 173.00 24.47 3118 TØNSBERG 201 5355 9999 0 44.00 21.89 3120 TØNSBERG 567 5355 9999 0 125.00 22.05 3121 TØNSBERG 381 5355 9999 0 89.00 23.36 3122 TØNSBERG 490 5355 9999 0 103.00 21.02 3123 TØNSBERG 643 5355 9999 0 107.00 16.64 3124 TØNSBERG 432 5355 9999 0 49.00 11.34 3125 TØNSBERG 104 5355 9999 0 26.00 25.00 3126 TØNSBERG 180 5355 9999 0 125.00 69.44 3129 TØNSBERG 0 5355 9999 0 0.00 0.00

The market share share is around 33 % as opposed to 44,5 % for all 1st choice outlets. This outlet is not listed as 2nd choice for any postal codes.

2.7 Sande Stasjon, train station Outlet 5382 is Sande stasjon a train station located at Fila 14 in 3070 Sande.

Sande stasjon is first choice for the following postal code:

Postal Place Total 1st 2nd 3rd Parcels Market code Parcels choice choice choice delivered share 3070 SANDE I VESTFOLD 1684 5382 9999 0 694.00 41.21

Thus, the market share is around 41 % as opposed to 44,5 % for all 1st choice outlets.

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3 COMPARISON NORWAY POST WITHOUT ALTERNATIVES AND PRIVPAK

In the inspection at Norway Post’s premises, documents were found where Norway Post assessed the alternatives for the individual PIS in NorgesGruppen/Shell in connection with a renegotiation of the agreements. Initially, there were 355 NorgesGruppen/Shell PIS (55%) for which there were no alternatives. After a “quality control”, the number was reduced to 304 (45 %).

Based on the inspection documents, 227 NorgesGruppen/Shell PIS can provisionally be identified as having no alternatives. (It is somewhat unclear whether all of these outlets remained without alternatives after the quality control. Further, some 37 PIS have not been counted as it is unclear whether Norway Post still uses the same outlet or whether there are alternatives. Finally, in the inspection documents the names of the NorgesGruppen/Shell PIS without alternatives have not been given for parts of .) These PIS vary in size as there are:

• 1 PIS distributing more than 15.000 B-to-C parcels; • 2 PIS distributing between 10.000 and 15.000 parcels; • 14 PIS distributing between 7.500 and 15.000 parcels; • 23 PIS distributing between 5.000 and 7.500 parcels; • 21 PIS distributing between 4.000 and 5.000 parcels; • 22 PIS distributing between 3.000 and 4.000 parcels; and • 144 PIS distributing less than 3.000 parcels.

Thus, the majority of PIS without alternatives are small. For these outlets it is not obvious that a new entrant/competitor would want to have an outlet.

CSA has endeavored to compare the 83 NorgesGruppen/Shell PIS without alternatives distributing more than 3.000 parcels, with Privpak’s coverage according to their grid dated 21 February 2005. Only Privpak outlets which have been defined as 1st choice are taken into account.

• Outlet level o For 3 PIS Privpak has an outlet in the same postal code: . One Best petrol station (previously a Shell petrol station?); . One Gyda kiosk; and . One Shell petrol station. o For 60 PIS, Privpak does not have an outlet in the same postal code; • Postal codes, these PIS cover 226 postal codes in full or in part. Privpak has no coverage for 172 of these postal codes, o st o The 54 postal codes where Privpak has a 1 choice outlet: . Privpak has an outlet in 7 of these postal codes; . Norway Post has a PIS in 19 of these postal codes; and . There are 3 postal codes where both have outlets. st o Privpak 1 choice outlets covering the 54 postal codes: . 7 postal codes are covered directly by: • 2 Esso; • 1 Gyda; • 1 Shell;

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• 1 Best; • 2 Mix; . The remaining postal codes are covered by outlets located in other postal codes” •