Bundeskartellamt prohibits SAKRET Europa from carrying out sales activities for its partners

The Bundeskartellamt prohibits SAKRET Trockenbaustoffe Europa GmbH & Co. KG (hereinafter: "SAKRET Europa") from continuing to carry out sales activities for their partners and sublicensees regarding dry building supplies to hardware stores and building materials traders.

Andreas Mundt, President of the Bundeskartellamt: "German competition law gives small and medium-sized companies the option to form a cartel to compensate any size-related disadvantages they may have compared to major corporations. In the case of SAKRET Europa for instance, this was achieved by joint brand management and the centralisation of certain sales functions. However, when the Knauf group joined the association by acquiring several small or medium-sized companies involved in the cartel, the association’s market shares successively increased to such an extent that the Bundeskartellamt could no longer accept the existing structures. We assess that SAKRET’s German sales system could be adjusted and continued in compliance with competition law and we would appreciate such an adjustment as it would continue to strengthen small and medium suppliers.”

Back in 1982 the Bundeskartellamt had acknowledged SAKRET Europa as a cartel of small or medium-sized enterprises. The SAKRET brand is owned by a US company which has licensed the use of the brand name by independent companies worldwide. The licensee for Germany and Europe is SAKRET Europa, which has sublicensed the use of the SAKRET brand name to the majority of its limited partners and other companies. Its limited partners include four medium-sized manufacturers of building materials and, via a subsidiary, Gebr. Knauf KG, a major corporation.

In Germany SAKRET's product portfolio comprises more than 500 products in over 3,000 product variants for walls, facades, interior walls/ceilings, floors, concrete construction etc. SAKRET's products include mortars, plasters, concretes, floor screeds and primers. SAKRET Europa centrally negotiates prices and conditions for its partners when selling to hardware stores. For sales to building materials traders, SAKRET only negotiates basic terms and conditions while the sublicensees set their own prices. The activities of SAKRET Europa thus streamline the market behaviour of its partners and sublicensees.

The Bundeskartellamt found that this behaviour appreciably restricts competition on the affected building materials markets. The joint market shares of the SAKRET association and the standardised sales prices of its partners and sublicensees did not allow an exemption to be granted.

Since the initiation of the proceeding in 2010 the Bundeskartellamt had repeatedly encouraged the association to find a joint solution for tackling the antitrust problem of the Knauf group’s involvement in the cooperation, e.g. by continuing the cooperation without Knauf. In the course of the proceeding some of the companies made suggestions for adjustments to their sales organisation, which the Bundeskartellamt considered a good basis for eliminating its antitrust concerns. However, despite lengthy negotiations between the partners, no agreement on these suggestions could be achieved. The prohibition does not affect other tasks of SAKRET Europa under its statutes, e.g. brand-related marketing or licence management.

The Bundeskartellamt’s decision is not yet final. The parties to the proceeding have one month to appeal the decision to the Düsseldorf Higher Regional Court.

The decision will be published on the website of the Bundeskartellamt in a few weeks following the elimination of business secrets from the document.