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18th March 2016 00:00
No Despite the Bundeskartellamt
German Economics Minister Sigmar Gabriel allowed Edeka takeover of small competitors Kaiser’s Tengelmann. The union would be the farmers fear Edekas market power.
up to seven years in job security, participation and collective bargaining coverage for shop assistants, warehousemen and forklift driver – of Economy Minister Sigmar Gabriel (SPD), these are good reasons to defy the No Federal Cartel Office and the acquisition to allow of Kaiser’s Tengelmann by the market leader Edeka. What conditions must Edeka meet?
Do the supermarket chain the 450 branches of Kaiser’s Tengelmann five years not to independent Edeka retailers or third parties to sell. During this time, almost 16 000 employees must not be made redundant; the collective agreements with the unions Verdi and Food and Catering continue to apply.
In a sale of branches after the five year Edeka must ensure protection from dismissal for a further two years. Also two Birkenhof meat plants may not sell Edeka three years. Edeka may Kaiser’s Tengelmann stores but pass within five years if the relevant trade union agrees.
What happens when Edeka does not meet the requirements?
Edeka must submit to the Ministry of economy newly concluded collective agreements for testing, to an annual status report. If you think the company against the requirements, then the ministerial approval shall be deemed not granted -. The business may have to be “resolved”
Why was ever a decision by Gabriel necessary
the Federal Cartel Office had forbidden the acquisition almost a year ago for competitive reasons. Edekas market power over the manufacturers would continue to rise; Consumers on the other hand could in some regions in the Berlin area, in North Rhine-Westphalia and in Upper Bavaria fewer choices when going to the grocery store, explained the competition watchdog. For the remaining provider would open “appropriate scope for price increases.” can be rebutted such concerns under two conditions: Either they are outweighed by “macroeconomic benefits of the merger”, or the planned merger is justified by an “overriding public interest”
How justified Gabriel his permission
the economy minister says when weighing public interest -?, maintenance of employment and preservation of workers’ rights – against restraints were former predominated for him. He saw to it that workers’ representatives and trade unions have a strong position. Thus, the “good status quo” of the almost 16 000 employees of Kaiser’s Tengelmann will backed up.
Why does Edeka assume Kaiser’s Tengelmann at all?
Tengelmann group intends to get rid of the supermarket chain, because they have long been in the red. Since 2000, the losses of the division have summed to 532 million euros. The minus often had to be balanced by other companies of the group. This is intended to stop. Edeka is with nationwide approximately 11,500 stores – including over 4,000 stores of discounter Netto, the largest retail chain in Germany. The Edeka Group employs more than 330 0000 people and posted 2014 sales of over 47 billion euros.
What the critics say?
give Greens in the Bundestag points out that the employees of Edeka have no commitments – they could be dismissed and branch closures to meet the conditions of the Minister of Kaiser’s Tengelmann. Even with suppliers and competitors are jobs at risk. The farmers’ union fears the even more market power of Edeka. The supermarket chain could thus farmers and food manufacturers dictate worse conditions. Economists are – as almost always – at odds. Daniel Zimmer, chairman of the Monopolies Commission, which advises the Federal Government on competition matters, has resigned in protest against Gabriel’s decision. The Monopolies Commission had opposed the takeover. She sees a threat to competition. Justus Haucap, a renowned competition expert, has called for the merger. His argument: The key competitors are Aldi and Lidl, Rewe and Edeka not. Moreover Tengelmann was too small to get favorable purchasing prices with the suppliers.
If the merger goes?
This is unsafe. Edeka competitor Rewe, the number two in the German market, has announced to appeal against the ministerial approval.
Author: AFP, away
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