Leadership Succession

Food Group Oetker Settles Family Feud

Alfred Oetker Source Jochen
Alfred, Julia and August Oetker.
  • Why it matters

    Why it matters

    The vote this week over leadership by the Oetker family may smooth decision making in Germany’s largest foods maker.

  • Facts

    Facts

    • Dr. Oetker generated €2.13 billion, or $2.6 billion, in sales in 2013.
    • The Oetker group owns foods, beer, a bank, a shipping line and luxury hotels.
    • August Oetker founded the company in 1891 and August, the current patriarch, is his great grandson.
  • Audio

    Audio

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The ownership family of Germany’s largest foods group, Oetker, on Wednesday settled a long-running dispute between two half brothers that had threated to hobble the country’s largest family-owned business.

According to Handelsblatt sources close to Oetker, the family voted to elect Alfred Oetker second-in-charge behind family patriarch August Oetker on the supervisory board, which hires and fires executives and sets major strategy.

The move was a victory for Alfred Oetker, 48, in a firm that makes a range of foods from frozen pizza to cake mixes to Radeberger beer. Founded by Rudolf-August Oetker in 1891, the company began as a baking powder maker and branched into foods, shipping and Bankhaus Lampe, a private bank.

The disputes seem complex but as most family firms dissolve, the Oetker group's progress is encouraging.

The Oetker business has long been riven by disputes over succession amongst the eight heirs from the three marriages of Rudolf-August Oetker, the father of both Alfred and August.

Alfred, the oldest of the three youngest children, believed his father saw him as the natural successor to the group. August Oetker, who is 70 and the oldest of all the Oetker heirs, wanted to take the lead.

The dispute was lengthy, bitter and complex, and had threatened to hamstring key decision making as family members formed fronts behind each brother.

There had been hope last summer after the siblings resolved to put the business ahead of family disagreements. They met to discuss their differences rather than meeting secretly with lawyers.

August Oetker, as sole head of the supervisory board, had made decisions that some younger heirs had disagreed with but felt powerless to change. The latest was when August Oetker wanted to buy Hapag-Lloyd shipping line – a decision vetoed by Alfred Oetker.

But as a regular board member, Mr. Alfred Oetker felt frustrated. When his brother Richard Oetker succeeded August Oetker as manager of the group, felt fobbed off with his post as head of the supervisory board.

A cartel investigation only worsened divisions with the family when the beer branch of the Oetker group was accused of using unfair market practices, and hit by a German cartel regulator with a three-digit million euro fine.

The dispute deteriorated as the older generation Oetkers accused their younger siblings of being pushy and immodest. This particularly irritated Alfred Oetker, who is married to an Italian princess, Elvira Grimaldi.

 

Oetker and grimaldi brauer
Alfred Oetker and his wife, Elvira Grimaldi. Source: Brauer Photos

 

 

Following Wednesday’s meeting, Alfred Oetker has assumed a greater role on the group’s supervisory board. But in the deal, he also agreed not to succeed his half-brother Richard Oetker, who is currently the operational manager of the Oetker group. Rather, it was agreed that an external manager will take over management of the company in 2017.

Analysts called the agreement a positive step.

Werner Abelshauser, a professor in economic history in the University of Bielefeld, said family firms often stumble when the fourth generation of owners take over.

“From a statistical point of view, only 10 percent manage to overcome that hurdle. Oetker seems to have found a solution, which is encouraging,” he said.

 

Oetker Gruppe-01

 

Christoph Kapalschinski covers companies and markets for Handelsblatt. To contact the author: kapalschinski@handelsblatt.com

 

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