The demand stayed on the table. Every payment in it now sits on a condition.

When the German hypermarket chain Real was split up and sold, Kaufland took over a number of its stores. Kaufland belongs to the Schwarz Group, which also owns Lidl.

New stores mean new shelf space. Kaufland asked its suppliers, the companies whose products fill those shelves, for special payments in connection with the takeover.

In Germany, a buyer with strong market power may not ask its suppliers for advantages without a justified reason. The rule is called the Anzapfverbot. So the Bundeskartellamt, the German competition authority, looked at those demands.

On 22 July 2021 it closed the case. Kaufland had changed its demands and made them precise and binding. The authority published what they look like now.

There are two payments.

The first is a distribution fee. It concerns a supplier who wants its products listed in one or more of the new stores, which means taken onto the shelves there. The fee is only due if that supplier then actually sells more. If the supplier’s sales in the new stores fall clearly below what the same products sell in comparable Kaufland stores that were already open, Kaufland waives the fee. That benchmark is named in the authority’s own release.

The second is a promotion bonus. It is due when Kaufland runs specific advertising for that supplier’s products. Kaufland tells the supplier which advertising it runs.

Both payments end when the former Real stores are fully part of Kaufland, at the end of 2022.

Once a year, retailer and supplier agree prices and conditions in the annual talks. Both payments are for listings and advertising on top of what was agreed there, so a supplier does not pay twice for the same thing.

Kaufland puts all of this to its suppliers in writing.

And one more point in the release matters. The demands are only made if a supplier agrees to them. The release does not say how many suppliers did.

The authority’s president, Andreas Mundt, put the decisive point in one sentence: “Entscheidend ist, dass solche Sonderforderungen nicht ohne eine entsprechende Gegenleistung erhoben werden.” What matters is that such demands come with something in return.

What I find interesting is that the demand itself stayed. What changed is what each payment is attached to.

A supplier can check every part of it. Was the product listed in the new stores? Did the sales there actually rise, compared with similar stores? Did the advertising run? When does it end, and what is in writing?

That turns a demand into a trade, something given for something received. And a trade has terms, which a supplier can weigh, agree to, or decline.

Only the modified version of the demands is public, so I cannot set it beside the first one.

When the next special demand is made, what would each payment in it be tied to?

Results in negotiations are not a coincidence.

Be well, Tina

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