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In a surprising turn of events, the Federal Cartel Office in Germany has prohibited Premium Food Group (formerly Toennies) from acquiring several slaughterhouses owned by Vion. The decision, made public in mid-June, aims to prevent a potential dominance of the beef sector in southern Germany and protect smaller competitors.
Vion, a market leader in the beef slaughtering sector in the region, announced its intention to largely withdraw from Germany and sell its locations in June 2024. The proposed takeover by Toennies, however, would have given the latter a leading position in the beef sector, in addition to its already dominant position in the slaughtering and processing of pigs in Germany.
The Cartel Office's concern was that the deal would reduce competition locally, disadvantaging smaller players rather than impacting competition only on a national or global scale. The competition authority believes that the takeover would reduce the alternative options for producers and customers, expanding the market position of the Toennies Group.
Bavaria's Minister of Agriculture, Michaela Kaniber (CSU), expressed disappointment with the decision. She argued that the Cartel Office is blocking the way for a takeover that could promote short transport routes and be beneficial for a German company. Instead, farmers in southern Germany are left questioning where their animals will be taken in the future.
Despite the prohibition, Germany's Premium Food Group (PFG) has stated that they will continue to fight for the acquisition of the locations. PFG CEO Clemens Toennies has expressed his dissatisfaction with the decision, stating that it is a hard blow for farmers in southern Germany who have been hoping for a clear decision on the future for months.
The Cartel Office's decision has also prevented an important step towards securing sufficient slaughtering capacity in the region. The competition concerns were particularly raised about the takeover of Vion slaughterhouses in Buchloe, Crailsheim, and Waldkraiburg.
This case highlights the importance of competition oversight in focusing on local market effects. A merger could lead to a dominant position and weaken competitive pressure against smaller firms, potentially leading to higher prices or reduced choices for customers in those specific regions.
In recent months, a sustainable future concept has been developed for both agriculture and businesses. The Cartel Office's decision reflects its commitment to ensuring a fair and competitive market, even in the context of sustainability initiatives.
As the situation unfolds, it remains to be seen whether PFG will be able to find a solution that will satisfy the Cartel Office and secure the acquisition of the Vion slaughterhouses. The outcome of this case will have significant implications for the beef industry in southern Germany and the competition landscape in the country as a whole.
- The decision made by the Federal Cartel Office to prohibit Premium Food Group (PFG) from acquiring several slaughterhouses owned by Vion affects not only the beef industry but also the food-and-drink sector in southern Germany, as the takeover would have expanded the market position of PFG.
- The competition authority's concern is that the takeover of Vion slaughterhouses by PFG would have negatively impacted local competition, disadvantaging smaller players and reducing the alternative options available for producers and customers.
- The proposed merger between Premium Food Group and Vion could have potentially threatened the fair and competitive market in the finance and business sectors, as the deal could have led to widespread dominance in the beef sector, affecting prices and choices for customers.
