The BKartA has recently launched a sector enquiry into the food retail sector, focussing on the competitive conditions on the procurement markets for food and luxury foods for retailers. Such an investigation can be undertaken by the BKartA where there are special circumstances which suggest that domestic competition may be restricted or distorted. They are not proceedings against specific companies but serve to investigate a sector as a whole.
This latest sector enquiry into the food retail sector to be announced is the last in a long line of food and retail firms to be under scrutiny at the BKartA. The BKartA is still engaged in a milk sector enquiry and is involved in an ongoing investigation of trade practices of German retailers.
The President of the BKartA Mr. Andreas Mundt believes that both the retail sales market and the procurement market have been influenced by the high level of concentration in the food retail sector. In his assessment, "the four leading retail companies have come to control around 85% of the total sales market in Germany". It seems that through the expertise Mr. Mundt has gained in other sectors connected to the food industry, the BKartA now wishes to take a closer look at the power structure in the food retail sector as well as the balance of power between food retailers and manufacturers.
Until now, most investigations have been focussed on the retail side, with mergers in the food retail sector being heavily scrutinised by the BKartA in the past. From this, the BKartA is now focussing on the predominantly national procurement markets, which cover the relationship between the trading companies and their suppliers, analysing the effects of the concentration in the retail market on the competitive conditions for smaller trading companies and suppliers.
Due to the large amount of possible sectors in the food retail sector, it is perhaps not surprising that the scope of the sector enquiry is limited to the clarification of specific individual questions. In particular, the BKartA will investigate the market positions which are held by individual retailers (and their cooperation partners) in the procurement of goods. This will be undertaken with the help of some particular selected product groups. The investigation is set to determine which, if any, purchasing advantages are granted to leading food retailers as compared to their competitors. Any follow-on effects on the retail market resulting from differing competitive conditions on the procurement market will also be examined.
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