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Kellogg's cornflakes on supermarket shelves

Photo: Snowfield Photography / IMAGO

The supermarket chain Edeka has turned to the Federal Cartel Office in a dispute with the US company Kellogg's. Since the price war between the breakfast cereal giant and the German retail chain has escalated, Edeka is no longer supplied with Kellogg's goods. The U.S. manufacturer now offers its cornflakes almost exclusively from rival Kaufland.

Edeka has therefore turned to the German competition watchdogs, European supervisory authorities could follow, as a manager confirmed to SPIEGEL. Edeka sees Kellogg's actions as an "abuse of vertical market power". The company had "established a monopoly".

»We would like to sell Kellogg's products«

Kellogg's had demanded lavish price premiums of up to 45 percent. These demands have been accommodated to a large extent, says an Edeka dealer, and a price increase of "significantly more than 20 percent was in the room". However, the U.S. company rejected this. Meanwhile, Kellogg's has reached an agreement with rival Kaufland from the Schwarz Group.

Edeka is bitter about this: "We would like to sell Kellogg's products," it says internally. However, the negotiators had gained the impression that the US company had pursued the strategy of not reaching a deal from the outset. With Kaufland as the only major partner in German retail, Kellogg's can now dictate its prices, "customers no longer have an alternative," says an Edeka manager. The company does not want to comment on the case.

Supermarkets fear churn of customers

Edeka is engaged in a tough battle with many brand manufacturers for prices. In view of high inflation, which was triggered in particular by increased food prices, supermarkets in particular are trying to counteract this. They are threatened with the migration of customers to discounters such as Aldi and Lidl, which are already among the major beneficiaries of the cost increase. In recent years, they have put more and more branded items on the shelves and have thus become an alternative to complete shopping for many customers.

Meanwhile, the supermarket chains, above all Edeka and Rewe, thrive on being able to offer as many strong brands as possible and thus set themselves apart from the discount competition. After all, it can only offer such low prices if it sticks to its very narrow cost structures – which is only possible with a relatively limited number of products.

Increasingly, however, global brand groups are losing interest in Germany. Top managers moan that corporate headquarters are bothered by the low margins in Germany, where people spend relatively little on food compared to other expenses. That's why Edeka and Rewe are currently at loggerheads with manufacturers from the USA.

They accuse the brand groups of not passing on the now more relaxed cost situation on the raw material markets in terms of product prices, but instead demanding more and more money. The manufacturers, on the other hand, argue that the development of raw material prices is still not foreseeable enough to be able to cut back on prices.