Consolidation in the Aisles – Bargaining Power in the Food Retail Sector

In this piece, author Valentin Hanke explores recent developments in food retail consolidation, beginning with EDEKA’s planned acquisition of stores and assets from Tegut. The German Federal Cartel Office is conducting an in-depth review focused on local retail competition and buyer power over suppliers, reflecting a long-standing pattern of scrutiny in Germany, including past interventions in EDEKA’s attempted acquisition of Tengelmann stores.

The article then contrasts this with developments in Austria, where the Austrian Federal Competition Authority has recently approved supermarket acquisitions by SPAR and REWE subject to “retailer remedies.” These include requirements that certain stores operate independently to preserve competition and protect regional suppliers, as well as long-term restrictions on further acquisitions in specific local areas.

Hanke also examines supplier-side dynamics through the European Commission’s review of Mars’s acquisition of Kellanova. The Commission assessed whether the merged entity’s portfolio could create bargaining leverage over retailers through a “basket effect,” but ultimately found that consumers did not significantly switch stores based on product availability, leading to unconditional clearance after a detailed Phase II investigation.

Finally, the piece turns to the United States, highlighting tensions between large retailers and suppliers as well as pressures on independent grocers. Examples include Mondelez’s withdrawal of direct store delivery services from smaller New York retailers, proposed state legislation aimed at preventing discriminatory supplier practices, and disclosures in proceedings involving Federal Trade Commission that shed light on pricing dynamics involving Walmart and PepsiCo. The article also notes a range of additional antitrust issues in the sector, from cartels to vertical integration and category management practices…

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