Bundeskartellamt clears EDEKA/Spar merger

The Bundeskartellamt has cleared the takeover of SPAR Handels AG (“Spar“) and Michael Schels & Sohn GmbH & Co. OHG (“NETTO Schels“) by EDEKA Zentrale AG & Co. KG (“EDEKA“). This includes the acquisition of 25 per cent of Offene Handelsgesellschaft NETTO Supermarkt GmbH & Co. (“NETTO Stavenhagen”). The merger ultimately includes EDEKA’s participation in the “ALIDIS/Agenor” purchasing and marketing cooperation.

According to the President of the Bundeskartellamt, Dr. Ulf Böge, the merger could be cleared without obligations because it does not lead to the creation or strengthening of a dominant position in the food retail market either on the procurement or sales side.

On the sales side the Bundeskartellamt generally defines the product market as the retail grocery market, which also includes the discount markets. In the competitive assessment of this particular case account was taken of the fact that more than 3,800 independent grocery retailers are organized in the EDEKA cooperative. Even though EDEKA does not hold stakes in these retailers, no real competitive impulses are exerted by this “friendly environment”. The Bundeskartellamt has also examined 90 regional markets nationwide to define the geographic market. In approx. 20 of these regional markets the companies involved achieve a market share of approx. one third or more following the merger, if the independent EDEKA grocery retailers are included in the calculation. However another aspect which had to be taken into consideration was that there was no geographic connection and that competitors of the parties to the merger also held large market shares in the markets concerned.

Bundeskartellamt President Ulf Böge: “As the grocery retail trade is characterised by significant price competition on the sales side despite a comparatively high level of concentration the creation or strengthening of a dominant position of the parties to the merger cannot be expected in any of the regional markets.”

Neither is the creation or strengthening of a dominant position expected in the procurement markets, which the Bundeskartellamt generally defines as national markets. The market shares of the parties to the merger clearly remain under one third, the threshold from which dominance can be presumed, and other competitors have comparatively high market shares.

Finally, there are no competition concerns about EDEKA’s participation in the ALIDIS/Agenor cooperation, which EDEKA will in future operate jointly with ITM Entreprises S.A. and Centros Comerciales Ceco S.A. (“EROSKI”).