Fine imposed against the central cooperative ZG Raiffeisen for violating the prohibition to put a merger into effect

The Bundeskartellamt has imposed a fine of € 414,000 on the ZG Raiffeisen central cooperative, Karlsruhe, for violating the prohibition to put into effect its acquisition of substantial assets of the insolvent Wurth Agrar GmbH & Co. KG, Appenweier.

In May 2009 ZG Raiffeisen acquired company premises which had been used by Wurth Agrar as a storage site for plant protection products. This acquisition was subject to merger control and should have first been notified to the Bundeskartellamt. The companies concerned would only have been allowed to realize the acquisition after prior examination and clearance by the Bundeskartellamt.

ZG Raiffeisen is a central cooperative active at the wholesale level of the agricultural trade sector. It mainly supplies agribusiness companies in the Baden area of Baden-Württemberg with equipment for plant protection and fertilization and acquires grain and maize. Also at the retail level the cooperative supplies farmers with equipment and resources. In particular due to its Appenweier storage site for plant protection products, Wurth Agrar had a strong market position in the Baden area in the distribution of plant protection products.

In the agricultural trade sector the Bundeskartellamt generally considers the storage site to be the key asset for an agribusiness company's successful distribution business as all essential business relations with farmers are conducted over the storage site. Accordingly the acquisition of a storage site is to be considered a concentration which, if the turnover thresholds are met, must be notified to the Bundeskartellamt prior to being put into effect.

The acquisition of further assets of Wurth Agrar notified in July 2009 by ZG Raiffeisen was considered by the Bundeskartellamt as being part of the single project to take over the whole of the Appenweier site consisting of the warehouse and further assets. The Bundeskartellamt issued a statement of objections to this concentration on account of the paramount market position of both companies in the market for the distribution of plant protection products to farmers in the Baden area, i.e. a market position which could not be challenged by competition. The project was then abandoned.

The divestiture proceedings initiated on account of the acquisition of Wurth Agrar's storage site for plant protection products were terminated after the site had been sold to Wurth Pflanzenschutz GmbH, which had already acquired the remaining assets from Wurth Agrar's insolvency. Wurth Pflanzenschutz GmbH is a subsidiary of Coopérative Agricole de Céréales (C.A.C.), a cooperative based in Alsace (France).

The administrative order imposing the fine in the proceedings concerning the violation of the prohibition of putting the concentration into effect is not yet final. The administrative order can be appealed against at the Düsseldorf Higher Regional Court. However, ZG Raiffeisen has agreed to have the proceedings terminated by settlement.