The Federal Cartel Office has approved the takeover of the Handelshof Group by EDEKA. The proposed transaction concerns the acquisition of 100 percent of the limited partnership shares and the sole control of the Handelshof Group by EDEKA ZENTRALE AG & Co. KG and EDEKA Foodservice Stiftung & Co. KG.
Andreas Mundt, President of the Federal Cartel Office: "In this case, we analyzed the sales and procurement markets very closely. Ultimately, we have not identified a competitive problem in any regional wholesale food market through the EDEKA / Handelshof merger. "
The procurement side was also the subject of careful business appraisal. According to his own words, he says that EDEKA has a strong market position here. "Our investigations have shown, however, that the Handelshof Group's share of significantly less than 0.5 percent of the nationwide procurement volume was ultimately considered to be so low that the increase in EDEKA associated with the acquisition has no significant competitive impact."
After extensive preliminary investigations, the merger investigation was completed within the first month of the merger control procedure. The Federal Cartel Office surveyed over 100 competitors, customers and associations. In particular, the market spaces in Bielefeld, Detmold, and Arnsberg/Hamm were subjected to a detailed analysis.
The food wholesaling sector includes the sale of food products, so-called non-food items (mainly drug store articles) and complementary non-food assortments to commercial customers (e.g., retailers, restaurants and bulk consumers).
The Handelshof Group operates 16 cash & carry wholesale stores in North Rhine-Westphalia, Lower Saxony and Mecklenburg-Vorpommern and also operates in the delivery wholesale business. Their turnover in 2018 was about 640 million euros. The EDEKA Group achieved 2018 sales of 53.7 billion euros in Germany alone. It is primarily active through EDEKA Foodservice in pick-up and delivery wholesalers, with locations throughout Germany except in northern Germany.
In a nationwide comparison, the merged company EDEKA/ Handelshof in the food wholesaling sector is lagging behind competitors such as Metro and Transgourmet. However, the regional market conditions are relevant for competition. According to the results of the investigations, the Federal Cartel Office has based itself on a uniform market for pick-up and delivery wholesale and has spatially assumed a radius of 75 km or, alternatively, 100 km around the acquired Handelshof locations.
Only in the regional markets of Bielefeld and Detmold do EDEKA and Handelshof together achieve market shares of 30-35 percent, making them the strongest providers in these markets, which are well ahead of their competitors. But even in these regions, where companies are relatively well represented, customers' ability to evade other wholesalers is so pronounced that it is unlikely that competition will be significantly affected.
In relation to manufacturers and suppliers, EDEKA already has a strong market position nationwide. The market shares in the various procurement markets are high. The purchasing volume of the Handelshof Group will strengthen this market position - slightly. The increase amounts to well under 0.5 percent of the procurement volume of the German food retail trade in the Food and Non-Food I segment.
The Office has made a careful assessment of this increase. In the end, it was considered too small to have a competitive impact on EDEKA's market position in the procurement markets that would justify a ban on the project. It was taken into account that Handelshof had no significance comparable to Kaiser's Tengelmann for the continuation of a medium-sized purchasing co-operation nor as an alternative for the market access of suppliers.
Source: TopAgrar
