EDEKA’s planned acquisition of large parts of tegut has revived the question of whether public-interest considerations should play a role in the assessment in German merger control. For the German Federal Cartel Office (FCO), the answer is clear. Its mandate is limited to competition law. Broader political considerations belong elsewhere — most notably, in Germany’s rarely used ministerial permission procedure.
The EDEKA/tegut case
The case is rooted in Migros Zürich’s decision to exit the German grocery sector and sell its tegut business. After EDEKA notified the FCO in March 2026 of its planned acquisition of, inter alia, 202 tegut supermarkets and 41 teo convenience stores, the FCO opened an in-depth Phase II investigation in April 2026, signaling early concerns that the transaction could further weaken competition in already concentrated regional food retail markets.
The FCO’s preliminary assessment, published last week, points to potential competitive concerns in several regional retail markets. While effects on procurement-markets may be limited, the FCO’s main issue appears to be local retail competition, where the transaction could reduce consumer choice and increase concentration.
When reading the FCO’s preliminary assessment, one could get the impression that the authority was keen to draw a clear line in anticipation of potential criticism. It was stressed that the FCO’s key task was to assess the transaction solely under competition law. Broader public-interest considerations fall outside its merger control analysis.
Competition law is not industrial policy
This distinction is central to German merger control. The FCO’s role is to assess whether a transaction would significantly impede effective competition. It is not tasked with balancing competition concerns against other political objectives. These interests may matter politically, but they are not part of the authority’s mandate.
German competition law nevertheless provides a narrow escape valve: the so-called ministerial permission (Ministererlaubnis). It allows the Federal Minister for Economic Affairs and Energy to approve a transaction that the FCO has prohibited, if the restraints on competition are outweighed by advantages to the economy as a whole or by overriding public interest. The ministerial permission is designed to serve as a deliberate political correction mechanism to a purely competition-based assessment (see our previous blog).
However, the instrument is used only in the rarest of circumstances. Over the decades, only 10 applications (see here) have resulted in a ministerial permission. The rarity of the procedure reflects both its political sensitivity and the traditionally high threshold for overriding a prohibition decision of the FCO.
EDEKA/Kaiser’s Tengelmann as the blueprint?
Any discussion on a potential ministerial permission in the EDEKA/tegut case immediately evokes association with the in the antitrust community famous well-known EDEKA/Kaiser’s Tengelmann case.
In 2015, the FCO prohibited EDEKA’s proposed acquisition of Kaiser’s Tengelmann. The authority concluded that the transaction would significantly strengthen EDEKA’s position in already concentrated regional grocery markets. Nevertheless, following an intense public and political debate, the former Federal Minister for Economic Affairs Sigmar Gabriel granted a ministerial permission in 2016. The decision was primarily justified by employment considerations and commitments aimed at preserving jobs (for more on the EDEKA/Kaiser’s Tengelmann case and on consolidation in the supermarket business in general, see our previous blog).
At first glance, the similarities are obvious: Both transactions involve EDEKA, both concern the highly concentrated German grocery sector, and both arise against the backdrop of a target business facing economic challenges.
The differences, however, may be equally important.
- First, Kaiser’s Tengelmann involved a lengthy and highly visible public debate focused on the future of tens of thousands of employees. Employment protection was at the center of the ministerial permission. By contrast, the political narrative surrounding tegut has — at least so far — been more closely linked to regional supply, the future of tegut’s distinctive supermarket model, and broader structural developments in German food retailing.
- Second, tegut represents a significantly smaller market participant than Kaiser’s Tengelmann did at the time (452 Kaiser’s Tengelmann stores vs. 202 tegut supermarkets). While local competition concerns may be substantial, the overall economic and political significance of the case appears more limited.
- Third, the FCO’s preliminary assessment suggests that concerns are concentrated primarily on specific regional retail markets rather than on procurement markets. This potentially increases the scope for targeted remedies that could address competition concerns without requiring a full political override.
Outlook
For now, EDEKA/tegut remains a merger control case. Whether it will ultimately become a ministerial permission case seems to depend on EDEKA’s willingness to offer tailored remedies, the extent to which competition concerns can be addressed within the ordinary merger control process and – obviously – on the FCO’s final decision.
Mr. Mundt’s recent statement reminds parties as well as observers of the distinction between competition law and political decision-making and that other public interests must be pursued through separate legal mechanisms.
If the FCO ultimately prohibits the transaction, Germany’s rarely used ministerial permission procedure could once again move to the center of the debate. In that scenario, it would be no surprise if Kaiser’s Tengelmann became the key precedent against which any political intervention would be measured — and a useful preview of the debate that may lie ahead.
Photo by Foto Markus Winkler on Unsplash
Antitrustpolitics.com 