Bundeskartellamt starts second investigative phase of the sector inquiry into the food retail sector
The Bundeskartellamt has started the second phase of its sector inquiry into the food retail sector by sending out requests for information to almost 200 food producers. This investigative stage will focus on the results of negotiations between food producers and retailers in order to determine which factors are particularly relevant for their bargaining power. A corresponding request for information will be sent out to food retailers in the coming weeks.
Andreas Mundt, President of the Bundeskartellamt, stated:
"With the sector inquiry we intend to take a closer look at buyer power in the food retail sector and base the current debate on a solid body of data. The results will make proceedings in the food sector along the value chain easier and shed more light on the relevance of buyer power in the sector."
The contents of the questionnaire are based on numerous talks the Bundeskartellamt held with market participants. It contains questions on approx. 250 individual products with regard to quantities, turnover, list prices and terms and conditions. There are also general questions on non-monetary conditions and standardized discounts which do not refer to individual products. To assess the bargaining power of individual producers and retailers, other data are also requested that allow for an estimation of the competitive pressure exerted by other branded products and by the private labels of the food retailers.
Since it would be disproportionate to investigate each product listed in the food retail trade, a selection of products will be examined more closely (layered random sampling). The sample was carefully selected so that the 250 products included are representative of the full product range of the German food retail trade with up to 50,000 products. This is why the sample does not only include top brands of large producers but also products that are typically part of the food retail product range but are less well-known as a brand.
In its first investigative phase/stage, the Bundeskartellamt already conducted a survey on company and market structures in the food procurement sector (see press release of 16 September 2011). The first survey addressed the market positions of retailers and the options available to producers to partially or completely bypass the major retailers. After the evaluation of both surveys the Bundeskartellamt will present the results in a report and publish them for discussion.
General information on sector inquiries:
The Bundeskartellamt may conduct an investigation into a specific sector of the economy if special circumstances suggest that domestic competition may be restricted or distorted (so-called sector inquiry, § 32 e GWB (German Act against Restraints of Competition)). It should be noted that sector inquiries are not proceedings against specific companies.