Second phase review initiated with regard to Kaufland’s acquisition of Real stores

The Bundeskartellamt has today initiated an in-depth examination (also referred to as a second phase review) in the context of Kaufland GmbH & Co. KG’s (Kaufland) planned acquisition of up to 101 Real stores from SCP Retail S.àr.l. (SCP) since further investigations regarding the relevant sales and procurement markets are necessary. Based on its decision of 11 June 2020 (received by the Bundeskartellamt on 12 June), the European Commission had referred the merger project to the Bundeskartellamt. Kaufland, just like Lidl, is a member of the Schwarz Group, which is the largest food retailer in Europe. SCP Retail is a Russian investment company, which has acquired all of the more than 270 Real stores from Metro.

When food retailers intend to merge, the Bundeskartellamt always also considers the retailers’ relation to their suppliers in addition to the sales side. Following the referral decision, the Bundeskartellamt sent an official request for information to 350 food retailers relating to 17 product categories. In this way, the current structures and power relations in the food procurement markets are to be determined. The last examination spanning the procurement markets was carried out by the Bundeskartellamt in the context of its 2014 sector inquiry on buyer power in the food retail sector, which is now partly supplemented and updated based on the merger control investigations.

In late 2019, the Bundeskartellamt already examined the market conditions regarding the sale of food to end consumers in the context of the Redos/Edeka merger project, which was later withdrawn (see press release of 26 November 2019), by surveying all food retailers. The authority bases its assessment on local sales markets around the relevant Real stores and determines the market shares and the market situation in those areas. The Bundeskartellamt has conducted additional investigations regarding the sales side since the SCP/Kaufland merger notification.

With respect to the merger project, the Bundeskartellamt has received a number of applications for admission to the proceedings on which the authority will decide soon. The second phase review must be completed within four months following the date of notification; the deadline thus expires on 12 October 2020.

The Bundeskartellamt has not been notified of any other plans that have to be examined regarding the acquisition of Real stores. However, the authority is conducting preliminary talks as to the framework conditions under merger control with SCP and food retail companies interested in acquiring Real stores.