The German Federal Court of Justice (BGH) had to assess the outcome of price negotiations between a powerful German food retailer (Edeka) and some of its suppliers. Edeka had just taken over a no-frills competitor (“Plus”) with more than 2000 outlets and was in the process of rebranding these shops with its own shop-brand (“Netto”) used in the lower end of the market. When undertakings of the same or a similar sector merge, they tend to compare their respective supply conditions and demand the more favourable version of the conditions for the whole (newly merged) group (“Bestwertabgleich”; adjustment to establish the best value). Thus, Edeka approached four companies supplying sparkling wine to Edeka as well as its newly acquired chain “Plus” and demanded a renegotiation of supply conditions
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The German Federal Court of Justice issues a landmark decision addressing the issue of “Wedding Rebates” demanded by undertakings with relative market power (EDEKA)
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