The Bundeskartellamt has cleared the takeover by Kaufland Dienstleistung GmbH & Co. KG (Kaufland) of four large food retail stores in Bedburg, Chemnitz, Essen and Wesel from Globus Markthallen Holding GmbH & Co. KG (Globus) following extensive market investigations in the first phase of its merger control proceeding. Kaufland abandoned its plan to also take over the Neubrandenburg store after the Bundeskartellamt had expressed competition concerns based on a preliminary antitrust assessment.

Andreas Mundt, President of the Bundeskartellamt: “We want to make sure that there are a sufficient number of different food retailers for consumers to choose from when they shop locally. Based on our preliminary assessment this could not be ensured in the Neubrandenburg region. In Bedburg, Chemnitz, Essen and Wesel, however, the requirements for prohibiting the merger were not met. In these regions the Schwarz Group will still have market shares of less than one third even after the merger. REWE and EDEKA, and in some cases also ALDI, each have strong market positions (to varying degrees) so that we could ultimately assume that there is sufficient competitive pressure.”

Globus operates 65 large food retail stores in Germany. In addition, the Globus Group also includes 88 DIY stores in Germany, food retail markets in the Czech Republic and Russia as well as two DIY stores in Luxembourg. The four stores in Bedburg, Essen, Neubrandenburg and Wesel are former Real stores which Globus had taken over in the course of implementing the remedies imposed in the authority’s decisions in the Real proceedings over the last few years (see press release of 22 December 2020).

Kaufland is part of the Schwarz Group to which the Lidl food retail chain also belongs. With a turnover of approx. 148 billion euros, the Schwarz group is by far the largest food retailer in Europe. Its turnover in Germany amounts to approx. 53 billion euros. Kaufland operates around 770 large food retail stores in Germany and a total of 1,500 stores in eight European countries.

Already in 2020 Kaufland had planned to acquire the stores in Bedburg and Neubrandenburg, which at that time were still operated by Real. Due to the Bundeskartellamt’s competition concerns the company had refrained from acquiring the two stores. The current investigations revealed that the situation in Neubrandenburg has remained essentially unchanged. Even without the merger the Schwarz Group is a leading player, and the market share increase would have been significant. In the full-range and large-scale retail segments the parties are even stronger, and they operate the largest stores in the Neubrandenburg market area. With regard to Bedburg, on the other hand, the investigations showed that the market structure has changed considerably compared to the findings in the Real proceeding, which makes a clearance decision appear appropriate. This is mainly due to the facts that the catchment area of the target store has increased, that several new stores were opened by competitors and that the target store's position has weakened. The combined market share in the market area was below 30 per cent, and below 40 per cent in the core area (vicinity). In Chemnitz, the merger will result in the Schwarz Group achieving a market share of below one third, also in the narrower core area, which is why this acquisition was cleared as well. The market shares in Essen are even lower, and the increase achieved by the merger is also less substantial. In Wesel, the merger merely results in the Schwarz Group achieving market shares of below 25 per cent in the market area and the core area.

The Bundeskartellamt conducted in-depth investigations in the affected food retail markets. Based on Payback data from Globus the authority identified the area in which 90 percent of all customers of the respective store are resident. This area constitutes the relevant geographic market. In addition, the authority examined the core area which accounts for two thirds of the turnover. Online food retailing was also included in the investigations, which showed that the significance of online food retailing varies considerably between market areas. In some market areas, in particular rural areas such as Neubrandenburg, online food retailing plays practically no role at all while its percentage share in the market area of the large city of Essen, where several suppliers are active, is in the mid-single digits. However, online food retailing was not a decisive factor in the assessment of the planned takeover.

The takeover of food retail stores not only involves the sales side where food retailers serve consumers. It also affects the procurement side and thus the relationship between food retailers and suppliers. Although the merger results in Kaufland and the Schwarz Group further expanding their positions in the procurement of food, the very small increment does not raise concerns under merger control rules when, as required, a nationwide assessment is made. The fact that the four store locations are spread across the country had also to be taken into account.