Cartel office objects to Tengelmann takeover by Edeka

The German Kaiser's supermarkets may not become Edeka stores after all. That's because the German cartel office wants to forbid the Tengelmann concern, to which the Kaiser's stores also belong, to sell its 451 supermarkets that are running a deficit to market giant Edeka. This was noted in the draft decision recently circulated by the cartel office.

The organization's research has so far shown that the planned takeover of Kaiser's "would strengthen market structures which are already highly concentrated," Andreas Mundt, chairman of the cartel office, said. This mainly applies to Berlin, Munich and several larger cities in the Ruhr. Because those are the only areas where Tengelmann has a significant presence. In the German capital alone, there are 142 Kaiser's stores.

The cartel office fears that Edeka and its rival Rewe, besides their discounters Netto and Penny, would remain as the only retail chains in many municipalities. With such limited competition, there's a real danger of the two companies raising their prices for consumers without having to make explicit arrangements, according to the cartel office.