A joint venture between German department store operator Karstadt-Quelle and food retailer Rewe may be in jeopardy according to German media.

Rewe has pledged an investment of €50m (US$60.5m) in the venture, which will help Karstadt modernise its 72 in-store grocery departments.

However, Rewe could be seeking to withdraw from the venture and has an option to do so in June 2005, according to the German News Digest.

As part of the deal Rewe has vowed to offer better purchasing conditions to Karstadt than Edeka, the supermarket chain which had previously supplied the department store operator's grocery divisions.