Bundeskartellamt examines whether co-operation between the REWE Group and Wasgau AG is compatible with general competition law

In merger control proceedings the Bundeskartellamt has cleared plans by the REWE Group (REWE), to acquire a 25.1 % share of Wasgau Food Beteiligungsgesellschaft (Wasgau Food). Following its overall appraisal of the relevant competitive conditions the Bundeskartellamt concluded that REWE's minority share in Wasgau Food is not expected to create or strengthen a dominant position in the markets concerned.

The clearance of the merger project does not, however, represent a final decision on the admissibility under competition law of the planned purchasing co-operation between REWE and Wasgau Produktions- und Handels AG (Wasgau AG). REWE's participation in Wasgau Food primarily serves to secure its co-operation agreement with Wasgau AG, which is controlled by Wasgau Food. This cooperation will now be examined for its compatibility with general competition law.

President Andreas Mundt stated: "The German Act against Restraints of Competition (ARC) allows the Bundeskartellamt to consider in depth both concentrative as well as cooperative aspects of co-operations between companies. Under merger control aspects the co-operation between the companies gives no cause for concern. How this close co-operation should be assessed with regard to the ban on cartels, however, requires further close examination:"

As a further stage in the proceedings the Bundeskartellamt will analyse the competitive significance of the strategic pooling by REWE of procurement volumes by means of purchasing co-operations. In addition, account needs to be taken of the effects of the co-operation on smaller competitors, in particular, which up to now have pooled their purchasing activities with Wasgau and will now lose a cooperation partner. Finally, the Bundeskartellamt will also examine whether the companies are likely to coordinate their pricing and product range strategy in the sales markets.

Further information:
Independent of the present case, the Bundeskartellamt is currently examining competitive conditions in the markets for the procurement of food by food retail companies in the form of a sector inquiry (cf. Bundeskartellamt press release of 16 September 2011).