Food retail trade
The food retail market in Germany is highly concentrated. The four major food retailers EDEKA, REWE, Aldi and the Schwarz group (to which Lidl belongs) together share more than 85 per cent of the market.
For years the Bundeskartellamt has exercised strict merger control to prevent the market from "tipping over".
In its case practice it endeavours to ensure that consumers still have an adequate number of food retailers to chose from in their vicinity. When examining a merger project, the Bundeskartellamt therefore makes sure that - after the merger - there remains a sufficient number of shopping alternatives at different retailers in the regions affected by the merger. In addition, in its merger control proceedings the Bundeskartellamt examines whether with the merger the retailers will gain a dominant position on the procurement side.
See the following press releases for further detail:
- Bundeskartellamt prohibits takeover of Kaiser’s Tengelmann by EDEKA (press release of 01.04.2015)
- Bundeskartellamt clears merger between EDEKA and trinkgut subject to suspensive condition (press release of 29.10.2010)
- EDEKA and Tengelmann satisfy preconditions to put EDEKA/Plus merger into effect (press release of 9.12.2008)
Control of abusive practices
The control of abusive practices is another tool of the Bundeskartellamt: dominant or powerful companies must not abuse their powerful positions. The Bundeskartellamt monitors compliance with this prohibition and intervenes if it becomes aware of an abusive practice, such as unjustified demands made by retailers of their suppliers (e.g. "wedding rebates").
- Food retailer EDEKA violates prohibition to demand unjustified benefits from dependent suppliers (case summary from 28 August 2014)
The issues of "buyer power of retailers" and "market dominance on the procurement markets" have recently gained importance which is why in 2011 the Bundeskartellamt initiated a sector inquiry into the food retail sector which was published in September 2014. The inquiry focuses on the competitive conditions in the markets for the procurement of food, beverages and tobacco by food retailers. The sector inquiry provides relevant insights for the Bundeskartellamt's future case practice. It is also intended to give new impetus to the ongoing political debate on the issue at national and European level.
See for further detail:
Summary of the sector inquiry (in English).
A brief overview of the survey (in German) is available here.
Press release (24.09.2014)
- Bundeskartellamt starts second investigative phase of the sector inquiry into the food retail sector (press release of 12.6.2012)
- Bundeskartellamt initiates market investigation by launching a sector inquiry into the food retail sector (press release of 16.9.2011)