Bundeskartellamt takes decision of principle in food retail case – EDEKA’s demands on suppliers were abusive

The Bundeskartellamt has issued a decision stating that the demands made by EDEKA Zentrale AG & Co.KG on suppliers after its takeover of the Plus stores in 2009 ("wedding rebates") were abusive. By a combination of demands made with retroactive effect, "cherry picking" of individual preferential conditions granted to Plus and demands of substantial bonuses without substantiation, EDEKA violated the so-called "Anzapfverbot" which prohibits retailers from inducing their suppliers to grant them benefits without any objective justification.

Andreas Mundt, President of the Bundeskartellamt: "The decision marks the end of this important proceeding and sends out essential signals to the food retail sector. Competition law sets limits to the freedom of action of powerful companies. Where the market position of a food retailer in the procurement markets is so strong that suppliers are dependent on it, as is the case with EDEKA, the retailer must not induce its suppliers to grant it benefits without any objective justification. Our decision helps to maintain effective competition and thus protects smaller competitors, suppliers and consumers. The proceeding contributes to establishing, also for the future, the borderline between "tough negotiations", which are admissible under competition law, and inadmissible practices used by powerful retail companies. And, last but not least, the decision will provide a valuable contribution to the debate on the problems of buyer power exerted by food retailers, both in Germany and at the European level."

After the Bundeskartellamt had issued its statement of objections (cf. press release of 24.07.2013), EDEKA, as well as REWE Zentralfinanz eG and the Trademark Association (Markenverband) as third parties to the proceedings, provided comments on the Bundeskartellamt's preliminary assessment.
The decision is not yet final. It can be appealed against before the Düsseldorf Higher Regional Court within a period of one month.