Tengelmann takeover

Pulling the Emergency Brake

Tengelmann
Sigmar Gabriel has Edeka egg on his face. Souce: Roland Weihrauch/dpa
  • Why it matters

    Why it matters

    A decree issued by Economy Minister Sigmar Gabriel, designed to save jobs in the wake of a major supermarket merger, appears to be backfiring.

  • Facts

    Facts

    • Edeka plans to convert many of the existing Kaiser’s Tengelmann stores into supermarkets run by its discount subsidiary Netto.
    • One of the conditions of Mr. Gabriel’s decree is a five-year freeze period.
    • Kaiser’s Tengelmann hasn’t been profitable in 15 years.
  • Audio

    Audio

  • Pdf

Sigmar Gabriel had a clear goal.

The economics minister wanted to save the 16,000 jobs at ailing supermarket chain Kaiser’s Tengelmann. It was only for this reason that he issued a ministerial permission with conditions for the planned takeover of the chain by competitor Edeka. The merger benefits the public welfare because it preserves jobs, the minister stressed. At least for the next five years.

But now, within a very short time, it has become clear how difficult it is to save jobs with a ministerial decree. Negotiations between Edeka and the union reveal that there is already a major dispute over the interpretation of Mr. Gabriel’s conditions even before the takeover of Kaiser’s Tengelmann is complete.

Immediately after the minister had announced his decision, the first justified questions were raised as to whether protecting jobs at a specific company is truly in the public’s interest. Daniel Zimmer, head of the German monopoly commission, resigned in protest over Mr. Gabriel’s approval of the Edeka takeover. He said that the criterion of benefiting the public welfare, which Mr. Gabriel had cited as the reason for his decision, had not been met, because jobs would only be saved temporarily.

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