Bundeskartellamt clears acquisition of flour brands "Diamant" and "Goldpuder" by GoodMills Deutschland

18.06.2015

After carrying out intensive market investigations the Bundeskartellamt has cleared the planned acquisition by GoodMills Deutschland of the household flour brands "Diamant" and "Goldpuder". The trademark rights and other rights and receivables from trademark licensing agreements are to be sold by PMG Premium Mühlen Gruppe. A brand sharing agreement for the "Diamant" trademark has already existed between the two companies since the 1960s so that Goodmills already sells this brand of flour in the north and east of Germany.

Andreas Mundt, President of the Bundeskartellamt: "GoodMills Deutschland will be able to further expand its market leadership in the household flour sector, especially in branded products, as a result of the merger. However, according to the Bundeskartellamt's investigations, there is still enough competitive pressure in this commodity market to prevent the company from gaining an uncontrolled scope of competitive action."

The product affected by the merger is household flour, i.e. flour sold in small packages to the final customer via the food retail trade. Household flour is sold under branded products and private labels. This raised the question whether these each constitute separate product markets or belong to one product market. As regards consumer behaviour and the substitutability of the products from the perspective of the direct customer of the food retail trade, the results of the investigations were unclear. Major manufacturers produce both private labels as well as their own branded products. Moreover, turnover with private labels in recent years has greatly increased to the detriment of branded products. This led to the decision to assume a single product market for household flour which geographically encompasses the whole of Germany. The question whether conventional household flour and organic flour, which is experiencing a significant growth rate, belong to a single product market, could be left open.

GoodMills' share of the household flour market will remain lower than 40 % even after the merger. The food retail trade as a buyer of household flour will have adequate procurement alternatives. In addition, there is still free production capacity in Germany for the manufacture of household flour.

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