Bundeskartellamt clears takeover of Zuckerfabrik Jülich

The Bundeskartellamt has cleared the planned acquisition of all the shares in Zuckerfabrik Jülich AG, Jülich, by Pfeifer & Langen KG, Cologne. The President of the Bundeskartellamt, Dr. Ulf Böge, stated: “Although Pfeifer & Langen KG remains or will become a market leader ahead of its competitors Südzucker and Nordzucker in the sugar markets affected by the concentration in the West of Germany, i.e. the region which is relevant in this context, there are no competition concerns about the project. This is because the financially strong groups Südzucker and Nordzucker are both active in the relevant markets with high market shares. Furthermore, they also hold a considerable market position in other product and geographic markets.”

Apart from the presence of these strong competitors the changed legal framework and its effects on the regulated sugar markets had to be taken into account in the assessment of the merger project. The EU sugar sector reform which came into force on 1 July 2006 will have a considerable impact on the European sugar markets and pave the way for their gradual liberalisation. The cut in the minimum sugar price level for sugar factories and sugar beet farmers, which had previously been guaranteed by the EU sugar regime, as well as financial incentives to close down sugar factories will reduce European sugar production. Not least due demands from the WTO European beet sugar and imported so-called ACP sugar, which has so far always been re-exported, will remain in the European internal market. Together with further market openings for developing countries this will result in further overcapacities. These additional quantities of sugar will create considerable competitive pressure.