Elephant wedding at the dairy market

After concessions: Cartel Office approves Müller takeover plans

24-Feb-2023 - Germany

The German Federal Cartel Office has given dairy giant Theo Müller (Müller Milch, Weihenstephan) the green light to take over brands and production facilities of competitor Royal Friesland Campina (Tuffi, Landliebe). However, the companies had to make considerable concessions to the antitrust watchdogs beforehand, as the competition authority announced on Wednesday. For example, the entire Tuffi division is to be sold to an independent third dairy.

Cartel Office President Andreas Mundt stressed the importance of the commitments. "In the markets for rice pudding, fresh milk-based mixed drinks and basic milk-based drinks, the Müller Group is dominant by a wide margin. This already superior market position would have been further strengthened by the acquisition of Friesland Campina's divisions," he said. However, the companies' commitments ensured that all problematic overlaps would be eliminated.

According to the Bundeskartellamt, not only will the entire Tuffi division be sold to a third dairy. The Theo Müller Group will also grant third companies "exclusive, irrevocable and perpetual trademark licenses" to sell rice pudding and fresh milk-based mixed drinks under the Landliebe brand and will not use the brand itself in these areas. This would preserve competition in these segments.

According to the Bundeskartellamt, the Müller Group's market share in the areas of rice pudding, fresh mixed milk drinks and basic milk drinks is already over 60 percent. This means that the threshold for presumed market dominance has been clearly exceeded.

For the other dairy products affected by the merger, such as fresh milk, UHT milk, yogurt, pudding, semolina pudding, quark, butter and cream, the merger will also lead to increases in market share for the Müller Group, which will be significant in some cases, according to the Cartel Office. However, the combined market share is below the presumption threshold for a dominant position of 40 percent. The investigations did not reveal any competition concerns that could justify a prohibition of the additional acquisition in these areas.

In the 2021 financial year, the Theo Müller group of companies achieved global sales of around seven billion euros, while Friesland Campina generated sales of over eleven billion euros. In Germany, both companies are among the largest ten dairies./rea/DP/jha (dpa)

Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.

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