Bundeskartellamt clears acquisition of Spreewaldhof by Andros

The Bundeskartellamt has today cleared the acquisition of Obst- und Gemüseverarbeitung “Spreewaldkonserve” Golßen GmbH (“Spreewaldhof”) by Andros & Cie SAS (“Andros”) in second-phase proceedings.

Andreas Mundt, President of the Bundeskartellamt: “Even before the merger, both manufacturers have enjoyed a lead over their competitors on the market for preserved fruit in glass jars and cartons. The merger will create a clear market leader in this sector in Germany. However, following extensive investigations we have concluded that the merger ultimately raises no serious competition concerns. The market is characterised by overcapacities. Competitors are able to react quickly by, for example, considerably expanding their range. In this way, they will be able to effectively limit Spreewaldhof/Andros’s scope of action in the future. The manufacturers are also faced with very strong customers from the food retail sector. Competition, which has been intense to date, will therefore remain intense.”

Spreewaldhof is a family-run company based in Brandenburg which is particularly known for its pickled gherkins “Spreewälder Gurken” but also for its wide range of preserved fruit in glass jars. In 2020, Spreewaldhof’s turnover amounted to approx. 100 million euros and was predominantly generated in Germany. Andros is a family-run French business operating worldwide; in addition to preserved fruit, the company also manufactures various desserts, beverages and jams under the “Bonne Maman” brand name. In 2020, Andros’s turnover amounted to approx. 2 billion euros in the EU; in Germany, the company operates through Andros Deutschland GmbH (formerly Odenwald Konserven) based in Breuberg.

According to the Bundeskartellamt’s investigations, the market particularly affected by the merger is the market for preserved fruit in glass jars and cartons for distribution to German food retailers. This market is to be defined as national in scope since most of the supply streams from manufacturers to retailers are within Germany. The Bundeskartellamt did not base its analysis on separate markets for apple puree or cherries – which together make up 80% of the relevant market – since the manufacturers are able to quickly switch their production to other types of fruit. The Bundeskartellamt assumes, however, that canned fruit, which is not affected by the merger under review, forms a separate market. From the perspective of the opposite side of the market, i.e. the German food retailers, preserved fruit in glass jars or cartons cannot be offered in tin cans since such a change in packaging is not accepted by customers. In addition, it is not possible to flexibly switch production between glass jars and tin cans and the field of competitors is different for preserved fruit in glass jars and cartons and canned fruit.

The parties involved are market leaders on the market mainly affected, holding high joint market shares of 40 to 50% and enjoying a significant market share lead over their competitors. Most of their competitors are small and medium-sized companies. Although larger competitors outside Germany are also active on the German market, their market share in Germany is still relatively small.

Following the authority’s competitive assessment, the merger is still not expected to significantly impede competition due to the specific market conditions. The authority’s extensive investigations have shown that the competitors in and outside Germany have sufficient spare capacities and could therefore increase production volumes in the short term. As a result, the parties’ scope of action (e.g. possible price increases) is effectively limited.

The parties are also faced with very strong customers from the food retail sector. The market is characterised by private labels and food retailers award their contracts in annual tender procedures. These tender procedures allow food retailers to switch at short notice to competitors whose product quality and prices are competitive with those of the parties involved and that have sufficient free capacities and the necessary expertise. The food retailers therefore have the possibility to switch their demand to other companies with the result that it would not be economically reasonable for the parties involved to increase their prices or reduce the quality of their products.