Merger project of Dutch veal producers Van Drie and Alpuro cleared subject to suspensive condition

Today the Bundeskartellamt has cleared the acquisition by Van Drie based in Mijdrecht, Netherlands of the veal producer Alpuro (Uddel, NL) subject to conditions. The clearance decision is subject to the suspensive condition that Van Drie divests its calf fattening activities in Germany before the merger is put into effect. The companies involved in these activities are Van Drie Deutschland GmbH, Schils GmbH and Naturalys GmbH (all based in Wettringen, Germany).

Andreas Mundt, President of the Bundeskartellamt, stated: "The merger would have created a dominant position on the German market for the sale of veal. The obligation for Van Drie to divest its calf fattening capacities in Germany will open up opportunities for more competition from rival suppliers."

Van Drie and Alpuro are the leading producers of veal in Europe. Their business activities cover the entire veal production chain. As so-called integrators they buy young calves for fattening, which they feed in their own or contract fattening farms. They then slaughter the fatted calves and sell the veal.

These two Dutch veal producers account for virtually all cross-border consignments of veal. The exports of national suppliers seem very minimal by contrast. In the most important sales markets for veal (Germany, France and Italy) domestic production is not sufficient to satisfy existing demand. Furthermore, there are considerable differences from country to country in consumption patterns and proof of origin requirements for veal.

As a result of the merger Van Drie would have expanded its leading position on the German market for the sale of veal to wholesalers, industrial processors and the gastronomy sector. By acquiring Alpuro Van Drie will improve its access to procurement markets with regard to the acquisition of young calves, fattening places and fattened calves. Due to shortages across Europe in access to fattening places and fattened calves and the concentration of demand on Van Drie and Alpuro, the market position of the parties could hardly have been weakened by domestic suppliers. In addition to this, German suppliers of veal depend on Van Drie's contract fattening farms in Germany for their acquisition of fattened calves in order to reach their slaughter volumes. On account of the inadequate availability of fattened calves, it is currently not possible for domestic suppliers to expand their slaughtering capacities to a level which would allow competitive advances.

To avoid a prohibition of the merger, Van Drie approached the Bundeskartellamt with the offer to undertake certain commitments. The sale of the companies in which Van Drie's calf fattening activities in Germany are concentrated, will mean the sale of approx. 30,000 fattening places, which is the equivalent to approx. 20 % of all fattening places in Germany. Following intense negotiations on which form these commitments should take, the merger was cleared subject to the above obligations to divest.