Germany’s Premium Food Group is currently seeking to overturn the rejection of its proposal to purchase factory assets from the meat industry giant Vion.
Last month, Germany’s competition authority, the Bundeskartellamt, blocked Premium Food Group’s bid to acquire Vion’s plant assets in Germany.
The Bundeskartellamt asserted that the deal would adversely impact farmers and smaller competitors.
In 2023, Vion initiated a series of meat-asset closures in Germany and subsequently declared its intention to exit the market entirely. The company had previously formed an agreement in January of last year with Premium Food Group concerning two of its plants, which was followed by additional agreements in September.
The proposed disposals include slaughterhouses located in Buchloe, Crailsheim, and Waldkraiburg, as well as a deboning facility in Hilden and two hide-processing plants in Memmingen and Eching-Weixerau.
Premium Food Group is urging the Higher Regional Court in Düsseldorf to reassess the decision. In addition, the company is contemplating other options, including seeking ministerial authorization from Germany’s Federal Ministry for Economic Affairs and Climate Action.
“We not only believe that the assessment of our market position is inaccurate but we also see an overriding public interest at stake,” said Premium Food Group 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. Therefore, we feel it is our duty to have our sustainable long-term agricultural concept and the acquisition targets – alongside 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.”
In its decision, the Bundeskartellamt disclosed in June that it had solicited feedback from competitors and meat customers in Germany. The regulator concluded that the merger would likely create or fortify a dominant position for Premium Food Group in several regional slaughter markets across southern and eastern Germany.
According to the Bundeskartellamt, Vion is the “market leader” in cattle slaughtering in southern Germany. Should the merger proceed, Premium Food Group would command over 40% market share in the Buchloe, Waldkraiburg, and Kempten catchment areas, “far exceeding” that of smaller competitors. Furthermore, the merger would enhance Premium Food Group’s position in pig slaughtering in the Weißenfels area by incorporating Crailsheim, whose catchment area overlaps.
In March, the Bundeskartellamt issued a statement of objections to both Premium Food Group and Vion outlining the competition concerns. In April, the companies proposed divesting and leasing facilities to designated acquirers to mitigate these concerns, but the regulator deemed these commitments “not capable” of preventing Tönnies’ dominance.
