The Bundeskartellamt, Germany’s Federal Cartel Office, has officially approved Harry-Brot GmbH’s acquisition of the industrial bakery operations of Glockenbrot Bäckerei GmbH & Co. OHG in Bergkirchen, alongside the formation of two joint ventures with the REWE Group. Glockenbrot, which is currently a wholly owned subsidiary of REWE, has historically produced private label bakery products exclusively for its parent company.

This transaction marks a strategic shift in REWE’s supply chain strategy, as the retail group transitions away from in-house bakery production in favour of a long-term supply agreement with Harry-Brot. As part of the deal, Harry-Brot will take ownership of the Bergkirchen bakery, while the two new joint ventures will serve as property holders for both the Bergkirchen facility and a planned new baking site in Erlensee.

Harry-Brot will independently manage and operate both bakeries, with no operational input from REWE. Meanwhile, the Glockenbrot site in Frankfurt is set to close.

Harry-Brot, Germany’s largest producer of bread and baked goods, reported a turnover of approximately €1.3 billion in 2024. The company operates ten baking sites across the country, supplying both branded and private label products to food retailers and other distribution channels.

The Bundeskartellamt's review focused primarily on the implications for the market for pre-packaged bread and baked goods — a segment that includes ready-to-eat products sold on retailers’ self-service shelves. Currently, Harry-Brot holds a market share of over 40 per cent in this category. Despite the company’s strong position, the regulator determined that the acquisition does not pose a significant threat to competition.

According to Andreas Mundt, President of the Bundeskartellamt, the assessment hinged on the fact that Glockenbrot's previous output was entirely for internal REWE consumption. As such, these volumes were not available on the open market and did not contribute to overall market competition.

Following the acquisition, this capacity will transition into the external supply chain, with Harry-Brot initially fulfilling those volumes — effectively expanding its market share but without significantly altering the competitive landscape for other producers.

Importantly, the merger represents a case of vertical disintegration. By stepping away from internal bakery operations, REWE is opening up its supply chain, albeit through a dedicated supply agreement with Harry-Brot. For the broader market, this could lead to improved efficiency and potentially more dynamic competition in the southern regions of Germany, particularly with the introduction of a new baking facility in Erlensee.

The authority also evaluated potential effects on adjacent segments, such as pre-baked and bake-off products — items delivered fresh or frozen for final baking at the point of sale. Here, too, the merger did not raise substantial concerns, as the market positions of both parties were not deemed problematic.

The decision underscores the increasingly collaborative models emerging between food retailers and industrial bakers. For Harry-Brot, the move further consolidates its leadership in the German bakery sector, while for REWE, it reflects a strategic pivot towards outsourcing and long-term partnerships in core product categories.

As the industry continues to evolve, this development offers a clear example of how major players are adapting production models in response to shifting economic, operational and competitive dynamics.