Germany’s anti-trust authority is raising concerns about the increasing dominance of a few major players in the nation’s grocery sector, a progress impacting both consumers and agricultural producers. A new report from the Monopolkommission details how growing market concentration among the “Big Four” – Edeka, Rewe, Aldi, and the Schwarz Group – is linked to rising prices and squeezed margins for farmers. The findings come after a government-commissioned examination spurred by widespread farmer protests last year, and are prompting calls for stricter enforcement of competition regulations.
Germany’s anti-trust authority is criticizing increasing market concentration in the grocery retail sector. The country’s largest supermarket chains have recently benefited from rising prices – to the detriment of farmers and consumers.
The German Monopolkommission has found significant evidence of insufficient competition in the grocery retail market. The market concentration of the so-called “Big Four” – Edeka, Rewe, Aldi, and the Schwarz Group with Lidl and Kaufland – has increased substantially over the past two decades through numerous mergers. Approximately 85 percent of Germany’s grocery retail market is now controlled by these four major players.
As a result, profit margins for supermarket chains have risen, while farmers have seen little benefit from higher food prices. This dynamic has allowed supermarket chains to strengthen their position relative to food producers, according to a special report from the Monopolkommission presented today. “The power of the food retail trade and, in some cases, the manufacturers has increased significantly at the expense of consumers, while agriculture is often exposed to world market risks,” stated Tomaso Duso, Chairman of the Monopolkommission.
Calls for Stronger Enforcement of Existing Regulations
“The high concentration in many areas is a cause for concern from a competitive point of view,” the experts concluded. “The remaining competition in the supply chains must therefore be urgently protected.” The Commission believes this places the Federal Cartel Office in a key position. “Merger control should take the entire supply chain into account.”
“Mergers that have harmed competition across the entire supply chain have not been adequately prevented in the past,” the experts criticized. For example, Edeka’s 2016 takeover of Kaiser’s Tengelmann, approved by the then-Federal Minister for Economic Affairs, significantly damaged competition in the grocery retail sector. Farmers also saw limited benefits from rising food prices. “We need more consistent enforcement of existing rules,” Duso urged.
The German Retail Federation (HDE) disputes this assessment in a statement. According to the HDE, there is sufficient competition among the major retail chains. “Competition in the food retail sector works,” said HDE Vice President Björn Fromm, responding to the Monopolkommission’s statements.
Higher Price Increases Than in Other EU Countries
The Monopolkommission’s investigation also reveals that prices for consumers in Germany have risen significantly compared to other EU countries. According to the Federal Statistical Office, food and non-alcoholic beverages cost 37 percent more in Germany in October 2020 than they did in October 2020. Profit margins for retailers and manufacturers have been rising for over ten years, Duso criticized – unlike in other EU countries. This suggests that the market power of retailers is also detrimental to customers.
The previous German government, comprised of the SPD, Greens, and FDP, commissioned the Monopolkommission to conduct this investigation following farmer protests in 2024. The Monopolkommission is an independent advisory body on competition issues that prepares reports for the Federal Government. The five-member committee can only make recommendations – unlike the Federal Cartel Office, which is responsible for abuse control and can also prohibit mergers.
With information from Martin Polansky, ARD Capital Studio.
