They have already moved out. When it comes to family matters, rich people can be quite ordinary at times: when the family falls apart, some of them move out. A few weeks ago, Alfred, Ferdinand and Julia, the children from the third marriage of the food manufacturer Rudolf-August Oetker, left the old Oetker world in Bielefeld with their company “Geschwister Oetker Beteiligungen”. This can be seen from entries in the commercial register. Your company is now a quarter of an hour’s drive away, in a different neighborhood. Distance can be good for a relationship.
The move is part of the split which the family announced in the summer and which has now taken place. The two, henceforth separate, companies announced this on Tuesday. This is how the long-standing feud between the five children from Rudolf-August Oetker’s first two marriages and the three youngest descendants should end. Internally there is talk of “G5” and “G3”, which reads as if they were alliances of states. Measured in terms of annual sales, the family lines of the five older children get the bigger bite of more than five billion euros. Nevertheless: The Oetker world, one of the best-known family businesses in Germany, is shrinking.
Like a textbook, the case shows the dilemma of family businesses. Worlds collide in just one word: family and company. It is a paradoxical system. The company is about the thing, about products and services, about the efficient completion of tasks. Families are the opposite. Ideally, they are not founded for soberly calculated purposes, but rather on the basis of great feelings. “The strength of a family company lies exactly where its risk lies – in the family”, Alfred Oetker likes to spread such wisdom, one of the “G3”. He should know: In his doctoral thesis he dealt with “Stakeholder Conflicts in Family Businesses” – and also with how to resolve them.
The feud began after the death of Rudolf-August Oetker in 2007. The patriarch already bears the whole past in his name: the first names of his grandfather, the company’s founder August, and his father Rudolf, who died in the First World War. Rudolf-August Oetker wanted harmony among the heirs. At the beginning of the millennium, he gave each of his children 12.5 percent of the company.
When making important decisions, the family lines blocked each other
“Eight children with equal shares is an absolute catastrophe,” says the Würzburg expert Dieter Salch, 81: “bequeathing the same share to each child has nothing to do with love or justice. The ammunition is included with the death of the testator. ” The lawyer taught at the University of Würzburg for many years and advised a few hundred family businesses in his law firm and auditing company. He now runs the firm alone. Oetker is not one of his customers. Salch advises that entrepreneurs should always “give you rulership, someone has to determine” when it comes to inheritance. That must be clearly formulated in contracts and in the will. “Clear contracts prevent disputes,” says Salch. If the family quarrels, there is a risk of stagnation. “Family businesses that are at a standstill no longer stand a chance.” The competitive pressure is too great in times of digitization and globalization.
The Oetkers made life difficult for each other. The “G5” prevented one of the “G3” from moving into the management board several times. When August Oetker, who had been in charge for almost three decades, had to retire from the management team, his younger brother Richard took over in 2010. His successor came in 2017 for the first time: CFO Albert Christmann moved to the top.
The “G3” in turn prevented the merger of the own shipping company Hamburg Süd with the competitor Hapag-Lloyd in 2013, which the older half-siblings had sought. Because for every resolution that changes the structure of the group, a three-quarters majority is required in the shareholders’ meeting. Another legacy. The “G3” bring it together to 37.5 percent. If they don’t keep up, nothing works. Four years later, Hamburg Süd went to the Danish company Maersk; the Oetker Group halved its annual turnover at that time. In the meantime, the group has also sold its Bankhaus Lampe to Hauck & Aufhäuser, a subsidiary of the Chinese Fosun group. The disintegration started even before the split.
With the separation from “G5”, the brothers Alfred and Ferdinand Oetker are now fulfilling their long-cherished wish to take on responsibility as managing directors. They want to run their new company around sparkling wine and chemicals, hotels and art as co-bosses “in partnership”, it says in a message. Her sister Julia wants to participate in the strategy “as a partner”, but does not want to move into the management. “Today begins a new chapter in the history of the Oetker family,” says Alfred Oetker. The company called Geschwister Oetker has a good 8,000 employees and an annual turnover of almost two billion euros.
Oetker is not the first entrepreneurial family to go their separate ways
The split-up of the Oetker Group was no easy undertaking, as it consisted of more than 400 individual companies. The Oetkers operate their businesses in competitive markets: food and beer, spirits and hotels. Competitors like Nestlé or Danone, Heineken or Anheuser-Busch Inbev are many times larger. Everyone is vying for space on the retailers’ shelves and online portals.
In Salch’s view, a breakup doesn’t have to be the worst way to go. There are different ways of doing this: the company is sold and the shareholders share the proceeds, some of the shareholders are compensated or – as in the case of Oetker – the company is split up. The compensation for shareholders is also a question of financial strength, says Salch. It shouldn’t weaken the company financially. For Salch, the worst solution is to sell the company, because it would end up in the wrong hands and the family association ends as entrepreneurs. “But what do the shareholders do with the money these days,” says Salch: “They pay high taxes and possibly negative interest. And where do you invest? The best investment is still your own company.”
In any case, the Oetkers are not the first to go their separate ways because it no longer works together. The shoemaker’s sons Adolf and Rudolf Dassler could no longer stand it in a company after the Second World War; one founded Adidas, the other Puma. The Aldi brothers Karl and Theo Albrecht went their separate ways from 1961. And the Bahlsen brothers had enough of each other in 1999, they divided the group into sweet and salty. A treat for onlookers is the public dispute between the butchers Clemens Tönnies and nephew Robert, at the moment there is peace again.
It is also not the first separation in the Oetker empire. The family has not even had a bad experience with it. At the end of the 1950s, Rudolf-August Oetker ceded the Schwartauer Werke jam factory, the Altländer Gold juice manufacturer and the Kochs Adler sewing machine factory to his older sister Ursula. Their son Arend Oetker renovated and sold juices and sewing machines. In the mid-1990s, the Schwartauer Werke bought a Swiss baby food manufacturer Hero, later Oetker turned the whole thing around and moved the Schwartauer Werke under the roof of Hero in Switzerland to save taxes. The portfolio also includes a stake in the seed manufacturer KWS. While the empire of Arend Oetker and his family grows, that of the relatives in Bielefeld crumbles.