The Bundeskartellamt is currently examining plans by Kaufland to acquire up to 101 Real stores from SCP Retail S.àr.l. The authority has today informed the companies concerned about its preliminary assessment of the project. The Bundeskartellamt sees several competition problems but is negotiating possible solutions with the companies. The deadline for a final decision has been extended to 30 December 2020.

Kaufland is part of the Schwarz group to which the Lidl food retail chain belongs. With a turnover of approx. 113.3 billion euros the Schwarz group is by far the largest food retailer in Europe. SCP, which is controlled by the Russian investment company Sistema, acquired all the Real stores from Metro, an acquisition which was cleared by the European Commission.

In merger control proceedings in the food retail sector the Bundeskartellamt always has to assess the competition effects of a merger project both for consumers, food manufacturers and suppliers as well as competing retailers.

On the sales side the authority analyses the competitive conditions in the sale of food to consumers in the actual regional catchment areas of the 101 Real stores. On the basis of its preliminary assessment and thorough analysis of the acquisition project, the Bundeskartellamt considers that the acquisition of the Real stores by the Schwarz group will significantly impede effective competition in nine of the regional sales markets.

On the procurement side the Bundeskartellamt has analysed the purchase of food by retailers from food manufacturers and suppliers in 17 different product categories. In its preliminary assessment the Bundeskartellamt also has competition concerns about the acquisition project with regard to the vertical relationship to suppliers and the horizontal relationship to competitors in the food retail sector. Of particular significance here is the position of small and medium-sized retailers and their participation in the sale of the Real stores.

On 6 November 2020 Kaufland and SCP submitted first proposals for commitments to the Bundeskartellamt both to solve the competition problems on the sales side and to dispel concerns about competition on the procurement side of the market. The Bundeskartellamt is currently negotiating with the parties about their commitment proposals.

With the first presentation of commitment proposals the deadline for the second phase proceedings was extended by a month to 30 December 2020 in accordance with the German Competition Act (GWB).

In the parallel merger control proceeding concerning plans by Edeka Zentrale AG & Co. KG, Hamburg to acquire up to 72 Real stores from SCP, the deadline for examination remains unchanged, i.e. 21 December 2020.