German Antitrust Authority Blocks Tönnies’ Acquisition of Vion Slaughterhouses Over Competition Concerns

According to a statement released by the Bundeskartellamt, the acquisition, which included the facilities in Buchloe, Crailsheim, and Waldkraiburg, would have significantly bolstered Tönnies’s already dominant position in Germany’s meat processing industry. The authority concluded that the move would have diminished competition in regional markets and disadvantaged both livestock producers and smaller competitors.

Per the statement, the merger would have enabled Tönnies to further consolidate its stronghold in cattle and pig slaughtering, particularly in southern and eastern regions of Germany. The Bundeskartellamt noted that such market dominance could restrict alternatives for farmers and limit buyer options nationwide, especially in the already strained meat supply chain.

Tönnies, headquartered in Rheda-Wiedenbrück, operates as a major player in meat processing, employing over 20,000 individuals and generating approximately €7.8 billion in global turnover in 2023. The company has an extensive footprint in the slaughter and processing of pigs, cattle, and poultry.

Vion Food Group, the seller in the proposed transaction, is a Netherlands-based producer with a global presence in meat and plant-based products. The company announced plans in June 2024 to withdraw from much of its German operations and put several facilities up for sale. In 2023, Vion reported revenues of around €5.1 billion.

The Bundeskartellamt evaluated the transaction across various segments of the meat value chain—including livestock procurement, slaughtering, meat processing, and product sales—emphasizing that regional factors heavily influence slaughterhouse operations. According to the authority, Tönnies would have controlled more than 40% of the market within key catchment areas if the merger were approved, far surpassing the market shares of its remaining competitors.

In particular, the authority expressed concerns about the Crailsheim facility, which processes both cattle and pigs, and the Waldkraiburg and Buchloe plants, which specialize in cattle slaughtering. The proximity of these sites to existing Tönnies facilities could have significantly reduced the number of independent alternatives for farmers and increased the group’s market leverage.

The review also noted that the takeover would have strengthened Tönnies’s position in national meat sales, allowing it to dominate markets for both pig and cattle products. Factors such as limited alternative buyers for producers, Tönnies’s vertical integration, and substantial financial resources further contributed to the competition authority’s decision.

According to a statement by the Bundeskartellamt, proposals from Tönnies to resolve competition issues—submitted in April after a statement of objections was issued in March—failed to adequately address the authority’s concerns. The commitments, which involved divesting or leasing facilities to third parties, were deemed ineffective because the suggested buyers were not sufficiently independent from Tönnies.

Source: LinkedIn