The Bundeskartellamt, Germany's competition authority, has announced its decision to block Tönnies International Management GmbH's plans to acquire several slaughterhouses and assets from Vion GmbH and Vion Beef B.V. This decision is primarily based on concerns that the acquisition would enhance Tönnies's already dominant position in the pig slaughtering and processing industry, negatively impacting farmers and smaller competitors in the affected regions.

Andreas Mundt, President of the Bundeskartellamt, emphasized that the takeover would limit options for producers and customers, thereby expanding Tönnies Group's market power. The authority noted that the merger would disadvantage buyers of slaughter products across Germany, as Tönnies would gain a leading position in both pig and cattle slaughtering and processing.

Tönnies, a family-owned company based in Rheda-Wiedenbrück, employs over 20,000 staff and reported a global turnover of approximately 7.8 billion euros in 2023. Vion Food Group, based in the Netherlands, is a significant player in the meat industry, with a turnover of around 5.1 billion euros in the same year. Vion announced plans to discontinue most of its operations in Germany and sell its facilities, prompting the scrutiny of the Bundeskartellamt and the European Commission regarding various merger projects.

The authority's investigation revealed that the proposed merger would create or strengthen Tönnies's dominant position in several regional slaughter markets, particularly in southern and eastern Germany. Tönnies would achieve market shares exceeding 40% in the catchment areas of the Buchloe, Waldkraiburg, and Kempten slaughterhouses, significantly overshadowing smaller competitors.

Additionally, the merger would bolster Tönnies's already strong position in the regional market for pig slaughtering, further consolidating its market leadership. The Bundeskartellamt identified several factors contributing to Tönnies's potential dominance, including high market entry barriers, economies of scale, and limited options for farmers to switch buyers.

In response to the authority's concerns, Tönnies submitted commitment proposals aimed at addressing the competition issues, including divesting and leasing facilities to designated acquirers. However, the Bundeskartellamt deemed these commitments insufficient to prevent the creation or strengthening of Tönnies's dominant positions. The decision is not final and can be appealed to the Düsseldorf Higher Regional Court.