Following intensive investigations, the Bundeskartellamt has cleared plans by Konsum Dresden eG, Dresden, to join EDEKA Nordbayern-Sachsen-Thüringen eG, Rottendorf, and thus the EDEKA group, in the first phase of the merger control proceeding.

Andreas Mundt, President of the Bundeskartellamt: “Ultimately, the requirements for prohibiting the project were not met. Even after the concentration, consumers in Dresden and the surrounding region will have sufficient alternatives to choose from. The Schwarz Group with Kaufland and Lidl as well as Rewe also have strong market positions in the affected region. What was ultimately decisive on the procurement side – concerning the buyer’s market position in relation to its suppliers – was that at the national level EDEKA’s market share increase will be very small.”

Konsum Dresden eG is a consumer cooperative with over 20,000 members. It operates around 30, mostly smaller, food retail outlets in Dresden and the surrounding region. In 2023 Konsum Dresden eG achieved a turnover of approximately 110 million euros. In the present proceeding, just like in the case of Konsumgenossenschaft Leipzig eG (see press release of 15 May 2024), the Bundeskartellamt considered the plans to join the EDEKA group, together with the other proposed agreements, to constitute a concentration subject to merger control and examined it as such. This is particularly because the Bundeskartellamt regards the EDEKA group as a single economic entity.

The EDEKA group is Germany’s leading food retailer with a nationwide distribution network of around 11,000 stores across all relevant distribution channels and a total sales area of around 12 million square metres. It also holds a stake in online retailer Picnic. In 2023 the EDEKA group achieved a turnover of more than 70 billion euros. It has a three-tier structure consisting of the EDEKA headquarters, the regional companies and the eight regional EDEKA cooperatives, including EDEKA Nordbayern-Sachsen-Thüringen eG. The regional cooperatives’ members – approximately 3,400 across Germany – are independent retailers operating one or several EDEKA stores.

On the sales side, the concentration affects the food retail market in Dresden and the surrounding region. The Bundeskartellamt used aggregated loyalty card data to determine where the customers of Konsum Dresden live and defined the relevant geographic market based on this information. In its competitive assessment, the Bundeskartellamt did not focus on individual stores but on the relatively dense network of mostly smaller stores with overlapping catchment areas as a whole. The investigations also covered online food retail. However, currently accounting for around one per cent of total sales, this segment was ultimately not decisive for the assessment of the project.

Ultimately, the concentration was not expected to significantly impede effective competition on the sales side. EDEKA will continue to be exposed to sufficient competitive pressure in Dresden and the surrounding region. Without the concentration, EDEKA is the second-largest player in the overall market after the Schwarz Group and ahead of Rewe, with a particularly strong position in the discount segment. However, when considering the full-range segment affected in the present case (no discounters), EDEKA ranks behind these two competitors. The concentration will put EDEKA more or less on par with the leading Schwarz Group and increase its market share to around one third. This applies both to the overall market and to the full-range segment as well as when considering different alternative geographic market definitions.

The Bundeskartellamt’s investigations also covered the procurement side, in particular Konsum Dresden eG’s plans to switch from its current main supplier to the EDEKA Nordbayern-Sachsen-Thüringen regional cooperative. When, as required, assessing the procurement markets nationwide, EDEKA’s merger-induced market share increase will in itself be so insignificant that it did not raise any concerns under merger control rules. The Bundeskartellamt will nevertheless continue to closely monitor the developments in the procurement markets beyond the individual case.