Konsum Leipzig can join EDEKA group

Following intensive investigations, the Bundeskartellamt has cleared plans for Konsumgenossenschaft Leipzig eG, Leipzig, to join EDEKA Nordbayern-Sachsen-Thüringen eG, Rottendorf, and thus the EDEKA group.

Andreas Mundt, President of the Bundeskartellamt: “Where a medium-sized competitor slips under the umbrella of one of Germany’s four large food retailers, this needs to be examined very carefully. However, in this case the requirements for prohibiting the project were not met. Even after the concentration, there will be sufficient shopping alternatives for consumers in the region. REWE and the Schwarz Group with Lidl and Kaufland, in particular, also have strong market positions in Leipzig, Halle and the surrounding region.”

This proceeding was the first in which the Bundeskartellamt considered an independent retailer joining the EDEKA group to constitute a concentration subject to merger control and examined it as such.

Andreas Mundt: “The decisive reason why this project was subject to the Bundeskartellamt’s approval is that Konsum Leipzig, after having joined the cooperative, will be under the EDEKA group’s central management. Under competition law, the entire EDEKA group including the regional companies and independent retailers is regarded as a single economic entity.”

This assessment was made, in particular, due to the accompanying and already existing agreements between EDEKA and Konsum Leipzig. The project therefore constitutes an acquisition of control as defined by law. In most cases joining a cooperative does not constitute a concentration as defined by law and is therefore not subject to merger control. This is because, among other things, a cooperative usually does not exercise control over its individual members. However, due to other agreements between the parties, in particular, this was different in the present case.

Konsumgenossenschaft Leipzig eG has approximately 29,000 members and operates around 60, mostly smaller, food retail outlets in Leipzig, Halle and the surrounding region as well as an online delivery service, which, however, only accounts for a very small percentage of the cooperative’s turnover. Konsum Leipzig already obtains a large proportion of its goods from EDEKA, more specifically from the Minden-Hannover regional company. In 2023 it achieved a gross turnover of approximately 200 million euros.

The EDEKA group is Germany’s leading food retailer with a nationwide distribution network of around 11,000 stores across all relevant distribution channels and a total sales area of around 12 million square metres. In 2023 the group achieved a turnover of more than 70 billion euros. The EDEKA group has a three-tier structure consisting of the EDEKA Zentrale, the regional companies and the eight regional cooperatives including EDEKA Nordbayern-Sachsen-Thüringen eG. The regional cooperatives’ members – approximately 3,500 across Germany – are independent retailers operating one or several EDEKA stores.

EDEKA Zentrale is responsible for the group’s business policy and strategy. The regional companies are EDEKA Zentrale Stiftung GmbH & Co. KG’s limited partners. EDEKA Zentrale, in turn, holds a 50 per cent stake in each of the regional companies, including EDEKA Nordbayern-Sachsen-Thüringen Stiftung & Co. KG. The regional companies supply the independent retailers and also operate directly managed EDEKA stores in their respective business areas. The independent retailers have to comply with extensive rules for operating their food retail stores. In previous proceedings the Bundeskartellamt had therefore already established that under competition law the entire EDEKA group including the independent retailers constitutes a single economic entity (see press release of 17 March 2021).

The concentration affects the local food retail markets in Leipzig, Halle and the surrounding region. The examination showed that the concentration is not expected to significantly impede effective competition. EDEKA will continue to be exposed to sufficient competitive pressure. In Leipzig the concentration will increase EDEKA’s market share to about 25 per cent – more or less on a par with REWE’s. The Schwarz Group (Lidl, Kaufland) has a slightly stronger position. In Halle EDEKA has a leading position even without the concentration, achieving a market share of roughly one third. However, here the market share increment is significantly smaller. The Schwarz Group and REWE also each have a significant position in these markets. In addition, there are other competitors active in all of the above markets.