Germany: Bundeskartellamt prevents furniture sector merger

The Bundeskartellamt has discontinued its administrative proceeding on account of the planned merger of the purchasing cooperations VME Union and KHG KG (Krieger/Höffner group) after the companies had given up their plans.

VME Union (including the MHK kitchen trade association which cooperates with VME) is the largest purchasing cooperation in the German furniture sector. In this sector, and in particular in the kitchen retail sector, the new association and KHG would together have reached market shares considerably exceeding the limits for admissible purchasing cooperations under competition law. After the Bundeskartellamt had informally informed the parties of its competition concerns and subsequent talks on possible modifications had not dispelled these concerns, the project has now been abandoned.

Andreas Mundt, President of the Bundeskartellamt said, “The fact that most furniture retailers in Germany are members of purchasing cooperations is acceptable under competition law and, in view of the market structure that is mainly characterised by small and medium-sized businesses, this is a reasonable approach in order to be able to compete with “big players” such as Ikea and XXXLutz. The Bundeskartellamt is not opposed to such cooperations. However, the standards and limits applying Europe-wide to the size of cooperations must be observed. According to our preliminary findings these limits are clearly exceeded in this case. In the assessment of such cooperations we must always keep an eye on possible disadvantages for consumers and the opposite market side, i.e. in this case small and medium-sized furniture manufacturers.

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