Bundeskartellamt clears merger between Homann Feinkost and Rügen Feinkost

Last Friday the Bundeskartellamt cleared the acquisition of Rügen Feinkost, Garz, by the Homann group, Düsseldorf.

The merger affects the market for the manufacture and sale of delicatessen salads and fish specialities, chiefly to food retail companies in Germany. With the merger the Homann group acquires a regional specialist in the manufacture of herring and matjes herring specialities.

According to the Bundeskartellamt's findings, the concentration is not expected to create or strengthen a dominant position of the Homann group in this market.

Andreas Mundt, President of the Bundeskartellamt, stated: "We were able to clear the merger in spite of Homann's strong market position. With the food retail sector, the manufacturers face a strong demand side. In addition, the sector has sufficient procurement alternatives with other suppliers which pose effective competition to Homann, the market leader. Nevertheless, we shall make sure that structures in this market will not worsen in future as any further mergers would increase the danger of the market becoming highly concentrated, to the detriment of the consumer"

The Bundeskartellamt has conducted extensive investigations in the merger proceedings. It included all trading companies with considerable market significance, as well as several hundred manufacturers of delicatessen salads and fish specialities.

The Homann group, which markets, among others, the brands Nadler, Pfennigs, Lisner, Hopf and Hamker, was already strongly positioned on the German market even before the merger with Rügen Feinkost. Its market share lead over its competitors is a clear indication of this. As a result of the merger with Rügen Feinkost, the group will also obtain further production capacities and be able to increase its competence in the relevant markets.

However, the group's market position is vulnerable. Most retailers have organized their procurement operations in such a way that smaller or only regionally active manufacturers can also be considered as potential suppliers. In the last two years the market leaders have even had to suffer slight market share losses to the advantage of these manufacturers. As a result the retail trade already has a whole range of nationally active or regionally important manufacturers of delicatessen salads and fish specialities as alternative suppliers. These include the Wernsing group (Popp, Bruckmann, Du darfst), Kühlmann (Kühlmann, Mövenpick) Deutsche See (Beeck), Merl, Dr. Doerr and Friesenkrone. These manufacturers not only have the necessary manufacturing knowledge and access to the procurement market for raw fish but also sufficient free productive capacities. Retailers will therefore be able to switch their demand to these manufacturers and effectively limit the Homann group's scope of action even after its merger with Rügen Feinkost.