The German Competition Authority allows the leading national meat company to bring in house employment contracts it previously had externally with meat cutters through a personnel company as part of a wider change in the meat industry’s staffing due to COVID-19 (Tönnies / Lazar)

Tönnies can take over employment contracts concluded with Lazar GmbH*

The Bundeskartellamt has cleared the acquisition of the assets of Lazar GmbH, Crailsheim, by Tönnies Holding, Rheda-Wiedenbrück.

Tönnies is by far the leading company in the slaughter and meat industry in Germany.

The Lazar Group provides personnel services for slaughterhouses. The company concludes contracts for work and services with producers of meats and sausages, including Tönnies, regarding certain tasks in the slaughter process. For the purpose of executing these service contracts the company uses its own employees. These workers, also referred to as “meat cutters”, are specifically trained to work in slaughterhouses and are mainly from South-East Europe. Lazar organises the transfer of workers to various establishments.

Since the working and living conditions of the contract workers from South-East Europe have been criticised for a long time and since the slaughter industry saw multiple large-scale outbreaks of the coronavirus in early summer 2020, the Federal Cabinet adopted a bill on 29 July 2020 regarding an “Occupational Safety Inspectorate Act” (Arbeitsschutzkontrollgesetz) according to which larger slaughterhouses may no longer use external workers as of 2021. On the same day, Tönnies notified the Bundeskartellamt of the plan to acquire the assets (including contracts for work and services, rental agreements) of Lazar GmbH and TL-Lazar GmbH in order to be able to employ the approximately 350 employees in its own establishment and to arrange their employment with third-party businesses in the future.

By acquiring both Lazar companies as originally planned Tönnies would have taken over the specialised workers who have already been working at Tönnies’s establishments as well as workers who have so far worked in establishments belonging to Tönnies’s medium-sized competitors. In this way, Tönnies would have been able to strengthen its own market position to the disadvantage of its competitors. After the Bundeskartellamt had expressed certain concerns the original notification was withdrawn. The planned acquisition is now limited to Lazar GmbH and thus to those workers who have already been working at Tönnies.

Andreas Mundt, President of the Bundeskartellamt:

“Tönnies has limited the originally notified project to the competitively neutral takeover of workers who have already been working at the Tönnies Group. In this way, it is ruled out from the outset that the Tönnies Group will be strengthened to the disadvantage of medium-sized competitors; therefore, it was possible to clear the project in the first phase of merger control.”

*This is the original title of the press release. The title above has been amended in order to match the e-Competitions format. Individual authors are welcome to provide original independent commentaries on the case law. Articles are subject to approval by the Board of e-Competitions Bulletin before publication based on the Editorial Policy (click here).

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German Competition Authority, The German Competition Authority allows the leading national meat company to bring in house employment contracts it previously had externally with meat cutters through a personnel company as part of a wider change in the meat industry’s staffing due to COVID-19 (Tönnies / Lazar), 27 August 2020, e-Competitions September 2020, Art. N° 96556

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