Germany’s Premium Food Group is to try and overturn the rejection of its move to buy factory assets from fellow meat major Vion.
Last month, Germany’s competition authority blocked Premium Food Group’s bid to acquire plant assets in the country owned by Netherlands-based peer Vion.
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The Bundeskartellamt said the deal would hit farmers and smaller rivals.
Vion began a round of meat-asset closures in Germany in 2023 and later announced a plan to exit the market completely. It formed an agreement in January last year with Premium Food Group for two of its plants followed by more in September of that year.
The planned disposals included slaughterhouses in Buchloe, Crailsheim and Waldkraiburg, along with a deboning facility in Hilden and two hide-processing plants in Memmingen and Eching-Weixerau.
Premium Food Group wants the Higher Regional Court in Düsseldorf to review the decision. The company is also considering further steps, including applying for ministerial authorisation from Germany’s Federal Ministry for Economic Affairs and Climate Action.
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By GlobalData“We not only believe that the assessment of our market position is inaccurate but we also see an overriding public interest at stake,” Premium Food Group said in a statement.
“This matter concerns nothing less than the future of sustainable livestock farming in southern Germany. Since the Federal Cartel Office’s negative ruling, we have received numerous urgent appeals from farmers and other stakeholders expressing their dismay and concern. We therefore feel it is our duty to have our sustainable long-term concept for agriculture and the acquisition targets – as well as our commitment to substantial investment – reviewed, if necessary, at the ministerial level. However, we remain hopeful that a mutually satisfactory solution can be found for all parties involved.”
Providing further details on its decision, the Bundeskartellamt said in June it had asked for feedback from competitors and meat customers in Germany. The organisation said it had “reached the conclusion that the merger would result in the creation or strengthening of a dominant position for [Premium Food Group] in several regional slaughter markets in southern and eastern Germany”.
It said Vion was the “market leader” in cattle slaughtering in southern Germany, Premium Food Group would hold over 40% market share in the Buchloe, Waldkraiburg and Kempten catchment areas, “far exceeding” smaller competitors, the Bundeskartellamt added.
The merger would also strengthen Premium Food Group’s dominance in pig slaughtering in the Weißenfels area by adding Crailsheim, whose catchment area overlaps, the regulator added.
In March, Bundeskartellamt said it sent a statement of objections to Premium Food Group and Vion outlining the competition concerns. Then in April, the companies proposed divestment and leasing of facilities to designated acquirers to address concerns, the regulator added.
However, it rejected those commitments as “not capable” of preventing Tönnies’ dominance.
