Baywa AG (until 1972 Bayerische Warenvermittlung landwirtschaftlichen Genossenschaften AG) is an international group with headquarters in Munich. It was originally founded to support domestic agriculture.
BayWa
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Due to its large market share, BayWa’s insolvency in the agricultural sector is virtually impossible. The two main shareholders – the Bavarian Raiffeisen Beteiligungsgesellschaft and the Austrian Raiffeisen Agrar Invest – as well as creditor banks have therefore pledged financial injections of 524 million Swiss francs (550 million euros) as an aid package. Most of this is in the form of loans of just under 381 million Swiss francs (400 million euros). And a restructuring report from the management consultancy Roland Berger is expected to be available in mid to late September.
Private agricultural traders are receiving significantly more enquiries from farmers looking for a buyer or a storage facility for their harvest. Similar reports can be heard from the numerous agricultural cooperatives.
«Impact on the entire industry»
“BayWa’s problems have an impact on the entire industry,” says Michael Osterholzer, managing director of the Osterholzer agricultural trading company of the same name in the Lower Bavarian municipality of Massing. There are considerably more inquiries from farmers. “For the first time, we have rejected grain at one location because we no longer have space,” says Osterholzer. “But that is not BayWa’s fault alone.” Many farmers still have grain from the 2023 harvest stored.
“The BayWa problem shortly before the harvest has led to some confusion and uncertainty,” says Bernd Zehner, head of agricultural trading at the medium-sized Zehner Group in Bad Königshofen in Lower Franconia. “It’s not just the farmers who are affected, but also all other market participants who are involved in the various marketing chains.” However, the increase is not as large as initially reported. The effects are also limited to the region: in the north and west of Germany, other agricultural traders are more important than BayWa.
“Great uncertainty”
It is not known how many customers were lost among BayWa’s farmers this summer. The situation is already difficult for many farmers and prices on the agricultural market are constantly fluctuating. As a result, many companies are obviously playing it safe when looking for a buyer for their harvest. The developments at BayWa have caused “great uncertainty not only among farmers, but also in the entire agricultural sector, including processors,” since the beginning or middle of July, says Robert Leidenberger, partner at the agricultural wholesaler Josef Marschall in Schwaig near Nuremberg.
BayWa, which emerged from the cooperative movement, not only supplies farmers with seed, fertilizer and agricultural machinery, particularly in its core Bavarian areas and in the new federal states, but also buys the harvest. There are no exact figures, but according to a rough estimate by a leading expert, BayWa’s market share in Bavaria could be around 40 percent, followed by agricultural cooperatives and private traders with around 25 percent each.
Burdensome billions in debt
In 2023, BayWa was in the red for the first time in its 100-year history, due to crushing billions in debt. Financial liabilities alone amount to 5.34 billion Swiss francs (5.6 billion euros). A few weeks ago, the company made its “strained” financial situation public. The main problem is the interest costs of the high debts; in the first quarter alone, BayWa transferred almost 95.3 million Swiss francs (100 million euros) to the lending banks.
The warehouse group RWA and Leipnik-Lundenburger (LLI) jointly hold around 28.3 percent of BayWa through Raiffeisen Agrar Invest. The owner of Raiffeisen Agrar Invest is RWA Raiffeisen Ware Austria Handel und Vermögensverwaltung with 63.625 percent and Raiffeisen Agrar Holding GmbH of Leipnik-Lundenburger Invest Beteiligungs (LLI) Aktiengesellschaft with 36.375 percent.
