Navigation and service

Bundeskartellamt initiates market investigation by launching a sector inquiry into the food retail sector

Date of issue: 16.09.2011

The Bundeskartellamt has launched a sector inquiry into the food retail sector. The examination focuses on the competitive conditions in the markets for the procurement of food and beverages by food retailers. Yesterday the authority sent out questionnaires to 21 food retailers and 200 manufacturers of food and beverage products.

The sector inquiry is not only relevant for the case practice of the Bundeskartellamt but is also meant to provide new information for the public debate of the issue. The ongoing debate on the concentration process in the food retail sector as well as the power relations between retailers and manufacturers proves that there is a strong public interest in this issue. The launch of the sector inquiry has therefore been welcomed by a large part of the industry.

Andreas Mundt, President of the Bundeskartellamt, stated: "The four major food retailers in Germany together account for approx. 85% of the sales market. Given such a strong concentration, we must also take a closer look at the power relations between retailers and manufacturers. Of course this is not possible for all of the approx. 50,000 products in the food retail sector. However, we will not only look at the competitive conditions for the product range as a whole but will also analyse various product categories and individual articles. As a consequence, the investigation will provide an accurate picture of the market conditions."

The sector inquiry will be conducted in two steps:

1. In the first phase of the inquiry, which has now been initiated, the Bundeskartellamt will investigate the structure of the procurement markets in the food sector in Germany on the basis of a number of criteria. The procurement shares of the individual food retailers will be investigated both with regard to larger product categories and, in a sample survey, with regard to nine product markets (tinned vegetables, milk, butter, cold coffee beverages (with milk), ketchup, frozen pizza, roasted coffee, sparkling wine and jam). The product markets were chosen with a view to covering different product categories and supplier structures, which allowed for a clear definition of the relevant markets. In the course of the investigation, the sample might be extended further if the results of the first survey suggest that this would be useful. The sample survey will be complemented by insights gained in merger control proceedings of the Bundeskartellamt. While the amount of data to be collected is substantial, it is necessary in order to draw an accurate picture of the power relations between retailers and manufacturers in the food sector.

2. In the second phase the Bundeskartellamt will investigate whether and to what extent the leading food retailers enjoy purchasing advantages over their competitors, and of what exactly these advantages consist in the individual cases. It will also be determined what effects these advantages have on competition in the sales markets. The second survey will focus on a representative sample of individual food products. In this context, representative means that all product categories will be included in the sample according to their share of the total procurement volume. Moreover, due consideration will be given to the competitive relevance of the products. The questionnaires concerning the second investigatory phase are planned to be sent out in January 2012.

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.

Logo: Offene Märkte | Fairer Wettbewerb