Cartel Office expresses concerns: takeover of Real branches is shaky

The Russian investor SCP wants to smash the supermarket chain Real belonging to it and divide branches among the competition. The German food trade is dominated by a few corporations, which is why the Cartel Office is examining acquisitions particularly carefully – and is now expressing concerns.

The Federal Cartel Office is skeptical of plans to take over up to 101 branches of the Real supermarket chain by its much larger competitor Kaufland. In its examination of the plans, the authority identified a number of competitive problems caused by the transaction, but is in talks with the companies involved about possible solutions, as it announced in Bonn. The antitrust authorities again extended the deadline for a decision on the sale to Kaufland – it now runs until the end of the year.

According to a preliminary assessment, the Federal Cartel Office sees "a significant impediment to effective competition in nine regional sales markets" from the competitor's acquisition of the Real locations there. In addition, the competition authority sees "with a view to the vertical relationship with suppliers and the horizontal relationship with competitors in the food retail trade" also competition concerns about the project. The position of medium-sized dealers and their participation in the sale of the Real locations are of particular importance.

Kaufland is part of the Schwarz Group, which also includes the discounter Lidl. According to the authority, the Schwarz Group is by far the largest food retailer in Europe with a turnover of around 113.3 billion euros.

The wholesale group Metro had sold the Real supermarket chain with around 270 stores and around 34,000 employees to the Russian investor SCP. This wants to break up the chain, in addition to Kaufland, among other things, Edeka branches are to take over. Up to 72 Real locations are to go to Edeka. The authority wants to examine these plans by December 21st. The Cartel Office sees the German food retail sector as being dominated by only a few large corporations. That is why it is scrutinizing acquisitions in the sector very carefully.

"We have taken note of the letter from the Federal Cartel Office. We welcome the fact that the Federal Cartel Office sees no sales concerns for 92 of the 101 locations registered by Kaufland," said SCP. "Constructive discussions are already taking place with the Federal Cartel Office in order to resolve the remaining concerns identified by the authority."